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Sterling Shines, Greenback Darkens

Looking at the leaderboard, there were two major contrasts in performance in the last 24h. On one hand, the British Pound skyrocketed amid renewed optimism that a Brexit trade deal is within reach. On the other hand, the North American currencies (USD, CAD) succumbed once again with no fiscal package agreement looming and an uncertain election outcome around the corner. 

Let’s get started…

Scan Of The Markets

To see an expanded version, right-click and select ‘open link in new tab‘. The indices show the performance of a currency vs a G8 FX basket. 

Looking at the leaderboard, there were two major contrasts in performance in the last 24h. On one hand, the British Pound skyrocketed amid renewed optimism that a Brexit trade deal is within reach. On the other hand, the North American currencies (USD, CAD) succumbed once again with no fiscal package agreement looming and an uncertain election outcome around the corner.

The latest we know about the US stimulus bill is that US House Representative Pelosi and Treasury Secretary Mnuchin met again following the ‘symbolic’ deadline to ink a deal by last Tuesday. Pelosi reiterated that an agreement by this weekend is within reach and if that were to occur it would allow a bill to be approved ahead of election day. In a TV interview she expressed satisfaction about the state of talks, hinting that a stimulus bill is now a matter of when and not if.

In the Brexit front, following the suspension of talks last week, EU Chief negotiator Barnier said on Wednesday that a trade deal with the UK was “within reach if we are on both sides prepared to work constructively and in a spirit of compromise”. This upbeat tone by Barnier, alongside the willingness by UK PM Johnson to step up “intensive” talks for the next three weeks has revived hopes that a deal by mid-November is a scenario the market is now factoring in.

An asset that took the spotlight in the last American session and was a big mover was Bitcoin, skyrocketing as news broke out, via Reuters, that “PayPal Holdings will allow customers to hold bitcoin and other virtual coins in its online wallet and shop using cryptocurrencies at the 26 million merchants on its network.” The market immediately connected the dots about what this means for wider adoption.

With regards to the hot trade of the day, amid the Brexit developments, which acts as a positive catalyst for European assets, and baring in mind the weakness in the North American currencies, my proprietary OFA (Order Flow) script identified a long position in the EUR/CAD that eventually travelled for a 3:1 risk reward, which means that for every $100 at risk one could have tripled their capital invested.

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Hot Trade Of The Day

To see an expanded version, right-click and select ‘open link in new tab‘. In this section I pick a market or several ones that presented an opportunity to buy on weakness or sell on strength based on the higher timeframes outlook. My video analysis below will further elaborate on the logic behind the trade.   

Insights – Hot Trade Of The Day

In this video analysis I dissect the information above. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter and manage a position, hence the video is intended as educational in nature and not financial advice. 

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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 this video. Fractal breakouts is at the epicenter to assist us in the analysis of chart structures.

MARKET MOMENTUM 

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.

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

About the author

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.

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