‘Risk On’ Suppresses US Dollar & Yen Outlook
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‘Risk On’ Suppresses US Dollar & Yen Outlook

Authored by Ivan Delgado

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.

Let’s get started…

Scan Of The Markets

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.

The markets looked past the 20.5m US job losses as part of last Friday’s NFP data as clearly depicted by the unfazed price action in the equity market, still showing a convergent bullish bias from a multi-timeframe angle as the 3k mark nears.

The market may have also taken comfort over the potential ease in tensions between the US and China in trade relationships, following a call between China’s VP He and US trade representatives. But remember, fundamentals is a complex matter to account for.

The call helped to appease worries that a renewed trade war could be in store. A joint statement was released reading that “in spite of the global health emergency, both countries fully expect to meet their obligations under the agreement in a timely manner.”

The rollback of containment measures in an expanding number of countries is argued to also be helping. Australia and NZ have fared formidably well and phases 2 and 3 of the rollback are now in sight, France and Spain announcing further ease in lockdowns, etc.

The currencies most emboldened by the lingering ‘risk on’ conditions include the usual suspects (AUD, NZD, CAD), making further strides at the expense of the USD and JPY. The latter two remain on the backfoot in light of the current sentiment, especially JPY.

The outperformance of the commodity-linked currency complex makes further upside in AUD/USD, NZD/USD and lower quotes in the USD/CAD the default view held as part of my daily analysis. Remember, where equities go, these market will most likely follow.

When analyzing the lay of the land in the EUR/USD and GBP/USD, right off the bat I see two market indecisive to break higher based on market structure alone. Now, when I throw into the mix intermarket studies, it clearly makes the prospects of a meaningful recovery off lows a tricky prospect that certainly doesn’t receive my blessing.

In today’s video, as usual, I elaborate, from the ground up, why I believe scenario A will happen as opposed to B, all looked through the magnifying glass of my experience. Note, one must be well aware that the key take away here is to pay attention to the well defined processes I follow to always come up to label markets as trending or ranging.

As traders, that’s what you should take aim for, tackling each chart as an unresolved puzzle that presents specific characteristics that will make it more or less primed for you to engage based on your own style. It is the robust process that matters. The outcome will follow as a byproduct of how purposefully you engage in the journey.

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Insights Into Market Flows

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.

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Recent Economic Indicators & Events Ahead

Source: Forexfactory

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!

Important Footnotes

MARKET STRUCTURES

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.

SMART MONEY TRACKER 

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.

SUPPORT & RESISTANCE

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.

FUNDAMENTALS

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.

PROJECTION TARGETS

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