Ivan Delgado is a decade-long Forex Trader. Feel free to follow Ivan on Youtube. Join thousands of traders who follow Ivan's insights to increase their profitability rate by learning the ins and outs of how to read and trade financial markets. Ivan has you covered with in-depth technical market analysis to help you turn the corner.
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The indices show the performance of a particular currency vs G8 FX. A video on how to interpret these indices can be found in the Global Prime’s Research section.
As I crack open and dissect the latest market flows, I must say that my attention this time immediately goes to two markets that are finally coming to life such as the Pound or Gold, both trending nicely after recent breakouts of structures on the daily timeframes.
In the case of GBP, with further negative news piling in over the weekend (BOE’s Haldane talks negative rates, no-deal Brexit plans), even if most of the damage was done last Friday, the currency is by far the most fragile. It has therefore been an environment that threw around some of the juiciest risk reward prospects if short.
When it comes to gold, the trading of a daily range, which had been the norm for a number of weeks, looks like is now history as Friday’s daily candle auctioned and accepted prices beyond the 1,735/40.00 resistance. It now opens the door to the next target of 1,800.00 even if for those value-seeking technical traders, patience is needed to at least allow some for of retracement and avoid to engage at these highs.
The reason I’ve prioritized the coverage of GBP or Gold is because the S&P 500 has been a rather dull affair the last 24h. The bellwether index in the US remains traded within close proximity of its daily support, which makes the immediate prospects foggier.
Note, in the fundamental front, the mounting tensions between the US and China on trade, tech must be accounted as negative inputs for equities. Similarly, the increase of military language is also a worrying development to keep an eye. All these factors, fundamentally, support the technicals in gold, which are firing up a buy on dips context.
The New Zealand Dollar is another market offering really interesting dynamics as it follows the path of the Pound by fully decoupling from the behavior of the Aussie, which remains much more stable. The trigger point initiating the pick up in sell-side pressure in the Kiwi was the recent admission that the RBNZ is looking into negative rates.
But brace yourself because what we are seeing in the Pound or the Kiwi, driven by idiosyncratic elements in each currency’s economy, could be just an aperitif of what’s to come. Why? Because we are finally starting to witness the aggregation of flows heading back into the appeal of the USD in the context of a macro bullish trend.
The re-emergence of USD bids could soon put on a compromising position other markets that so far have traded in quietest conditions such as the EUR/USD or the AUD/USD, both hovering nearby support areas in the daily chart. My intermarket model tells me the risks are certainly on the rise for an eventual breakout of structures.
Note, over the weekend, Federal Reserve Chairman Jerome Powell said a U.S. economic recovery faces the real prospect of not getting out of 2nd gear until next year and a full comeback dependable on a vaccine. Powell also threw a headline that tends to be positive to equities when saying that Fed is not out of ammunition and can do more, which is obviously the ‘Fed Put’ buyers of equities cling on going forward.
“This economy will recover. It may take a while … It could stretch through the end of next year. We really don’t know. Assuming there is not a second wave of the coronavirus, I think you will see the economy recover steadily through the second half of this year. For the economy to fully recover people will have to be fully confident and that may have to await the arrival of a vaccine” Powell said as part of “60 Minutes” news show.
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This analysis is conducted on a multi timeframe dimension. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter a position, hence the video is mainly intended as a way to educate traders in upping their analytical skills.
If interested in the best ‘free of charge’ News Indicator that displays data on past and future news in the Forex market via MT4, check this YouTube video I produced. The indicator allows you to save time, avoid mistakes. It’s spot on!
Markets evolve in cycles followed by a period of distribution and/or accumulation. To understand the principles applied in the assessment of market structures, refer to the tutorial How To Read Market Structures In Forex.
In order to assess the market momentum of a particular asset, I’ve promoted for years the idea of using what I call the smart money tracker. The settings and the indicator can be obtained via our Discord room, where traders from all walks of life interact frequently. In this video I lay out the elements I look into to call trend directions.
Unlike levels of dynamic support or resistance or more subjective measurements such as fibonacci retracements, pivot points, trendlines, or other forms of reactive areas, horizontal areas of support and resistance are universal concepts used by the majority of market participants. It, therefore, makes the areas the most widely followed. The Ultimate Guide To Identify Areas Of High Interest.
It’s important to highlight that the daily market outlook provided in this report is subject to the impact of the fundamental news. Any unexpected news may cause the price to behave erratically in the short term. Monitor the event risks via Forexfactory.com & refer to Fundamentals vs Technicals In Forex.
The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection