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…
We certainty had a high flurry of activity in the currency market, with weakness in the US Dollar at the epicenter of the wild moves as the Fed unleashed yet again another monster-size lending program.
The immediate reaction by market forces was to sell the US Dollar across the board, further reinforcing the bearish momentum that as the readers of the Daily Edge would know, has been promoted daily. On the flip side, the Aussie and Kiwi were the star performers, with the former hitting the bullish target of 0.63 endorsed this week.
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.
In the US equities, the S&P 500 made it to its 100% projection target of 2,800.00 with bullish dynamics intact after a 40 points upside day. The renewed optimism in stocks, mainly fueled by the flattening of COVID-19 curves (take it with a huge pinch of salt as new waves may re-emerge) kept the Japanese Yen pressured throughout the week, while aiding to maintain the downward pressure in the USD too.
The Oil market was down, however, did not find sufficient comfort from the news that the OPEC and its allies agreed to historic production cuts to the tune of 10 million barrels per day near term. Overall, it was a disappointing outcome as it won’t resolve the huge magnitude of the issued at present (the the size of the oil oversupply).
In another piece of positive news, the Eurogroup reached a deal on a virus rescue plan. The package, negotiated by the finance ministers, includes a 500-billion-euro ($550-billion) fund for European countries hit hard by the coronavirus epidemic. The Euro celebrated the news through a mark-up in prices as the market learnt the news, as did the Pound cheering up for the discharge of UK PM from the ICU.
We also learned more appalling job loss figures in the US and Canada, with a speech by Fed’s Powell warning that unemployment is en-route to rise to very high levels even if just temporarily. In the US, initial jobless claims soared to over 6.5 million vs 5.5 million estimate, while in Canada, the March employment stood at -1 million, twice as bad as predicted by the consensus of economists. The Canadian Dollar traded soft throughout the day with OPEC and jobs data as the drivers.
Do remember that this Friday will be, most likely, a quiet day in the markets as many countries are closed for holidays. It’s Good Friday. During times when liquidity in the markets dry up, is best to take a pause, work on side projects, back testing, even if it’s not a given that opportunities won’t exist given the nature of the markets we are trading and the fast-moving news, but as a rule of thumb, trading during holiday periods is not the best environment to engage on.
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!
This analysis complements one’s view by accounting for multi timeframe biases. Ultimately, it is the traders’ call, via a set of entries (watch my setups) thoroughly backtested, to decide if a market meets the prerequisites to enter a position. This analysis is mainly intended as a way to educate traders in upping their analytical skills.
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.
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