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The USD Recovers Off Yearly Lows

The USD staged a meritorious comeback on Monday. After plummeting to fresh year lows at an index level (equally-weighted vs G8 FX basket), there was a sudden change of script in the ebbs and flows with no apparent catalyst. The run higher in the US Dollar came alongside steady demand towards the European-based currencies (EUR, CHF).

Let’s get started…

Scan of the Forex market

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 Forex basket. Indicators are available to use these measures via Tradingview and MT4.

 

The USD staged a meritorious comeback on Monday. After plummeting to fresh year lows at an index level (equally-weighted vs G8 FX basket), there was a sudden change of script in the risk dynamics with no apparent fundamental catalyst. The run higher in the US Dollar came alongside steady demand towards the European-based currencies (EUR, CHF).

The Pound, as it’s been the case as of late, deserves its own chapter as the volatility continues to make trading the currency an affair not for the faint-hearted. The Sterling surged at the open of the Asian session as speculative bets re-adjusted to the news of further Brexit trade discussions taking place but the lack of further clarity that has followed led to most post-gap gains pared.

In terms of the global context. Risk has been holding up not only due to the EU-UK agreement to keep talking but there was good news in the US where the FDA approved the Emergency Use Authorisation for the Pfizer-BioNtech covid-19 vaccine. The struggle to hang onto the early risk-on mood may be attributed to negative COVID-19 infection/lockdown news in the US and UK.

For those interested in whether or not opportunities in line with the strategies that I teach or soon will be teaching were made available in the last 24h, here is where we stood. There were no TT or trap patterns qualifying in the last 24h that I could spot. On the flip side, a few CSM (currency strength micro-mechanics) trades popped up with the demonstration of one in the video below.

Hot trade of the day

In this section, I pick a market or several ones that presented an opportunity based on the concepts I teach. My video analysis below elaborates on the logic behind the trade.

Economic indicators & events

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. The indicator allows you to save time and avoid mistakes.

Aside from the Brexit talks going down to the wire, the events to pencil in the calendar for traders this week include. The European and US PMIs, alongside US retail sales, all on Wednesday. The very same day, in the American afternoon, the biggest event in the form of the FOMC takes place. Early Thursday in Asia, volatility is expected to be rich as well with the release of the New Zealand GDP data, followed soon after by the Australian jobs report. Later on Thursday, in European hours, the BoE and the SNB will meet. Lastly, on Friday, the BoJ must be accounted for.

Source: Forexfactory

Important footnotes

Announcing The Global Prime Academy. Check out our brand new Academy website launched earlier this week. Let me give you a brief background on why we’ve created the Global Prime Academy. The universal praise I received about my trading and content I produce has been incredible.

However, clients at Global Prime were frustrated to find a structured way to absorb all this knowledge. Part of these golden nuggets are now going to be encapsulated in easy to follow and digestible lessons. By the end of the course, you will be given a set of strategies to take your game to the very next level. The first delivery focuses on the ‘TRAPPED TRADERS PATTERN’.

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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