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.
The market has gone through a very sharp reversal in risk sentiment over the last 24h as buyers returned in mass in the US equity space, leading to an outperformance of the Aussie in the currency market, while the Yen and the Swissy suffered the most.
Concerns of a re-peak of COVID-19 cases in the US, alongside risks of an outbreak in Beijing were brushed under the rug. What started as a creepy selling day in Asia turned into a meritorious 5% recovery from bottom to top of the range in the S&P 500.
What acted as the main catalyst leading to an acceleration in gains across risk assets more broadly included the fleshing out of all the pending details by the Fed as part of its program of buying individual Corporate bonds, which is now going to ramp up.
The programmed itself is old news as it was first announced in March at the peak of the equity mayhem. This Secondary Market Corporate Credit Facility (SMCCF), which has a purchasing capacity of $250bn, aims to buy the so called ‘Fallen Angels’, which comprises Investment Grade (IG) credits not below 2 notches under BBB.
RBA Minutes this afternoon shouldn’t contain any surprises, policy having been left unchanged but the RBA acknowledging a somewhat less bleak view of the economy relative to earlier prognostication as social distancing restrictions lifted a little earlier than the government has previously led us all to expect.
Going forward, the critical risk events for this Tuesday include the BoJ monetary policy meeting, even if expectations for any significant changes are very low. The only slight adjustments may include a revision of the amount committed as part of the funding facility, announced back in May to stem the loss of business activity.
The RBA Minutes in the Australian afternoon is also one event to keep a close eye even if no surprises are eyed at this stage. The RBA has admitted that rates will now be left unchanged for a considerable amount of time, with the recent rhetoric seeing a slight shift in views to a more constructive economic recovery relative to the worst projections as part of the scenario templates considered.
In terms of key data releases, we get the UK employment report for May, the German ZEW survey (jump in expectations towards the 60.00 mark eyed) and in the US we await the release of the May Retail Sales and Industrial Production.
Technically speaking, the currency best positioned to keep capitalizing on the smart reversal in sentiment is the Australian Dollar, vindicating this strength through a bullish breakout in structure at an index level. The currencies associate with risk-off flows (JPY, CHF, USD) are all trading on the backfoot and more losses may lie ahead. The video I’ve produced below looks to deconstruct the latest ebbs and flows.
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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