Position Trader
A position trader is someone who holds a position, usually stocks, for the long term; from weeks to months, even years. They are less concerned with short-term fluctuations and the news of the day unless it impacts the big picture behind the stock they are trading. Position traders do not trade actively and the fewer trades they make in a year, the closer they are to becoming buy-and-hold long-term investors.
Source: Investopedia Position Trader
Source: Investopedia Position Trader
Swing Trader
Swing trading has been described as a kind of fundamental trading in which positions are held for longer than a single day. Most fundamentalists are actually swing traders since changes in corporate fundamentals generally require several days or even a week to cause sufficient price movement to renders a reasonable profit.
Source: Investopedia
Source: Investopedia
Cohn Shocker
Source: Market Pulse
By: Stephen Innes
Head of Trading APAC at OANDA
Cohn Shocker
The morning Whitehouse shocker is that Gary Cohn is resigning as head of the White House’s National Economic Council. His resignation increased the risk tenfold that President Trump will follow through with far-reaching trade tariffs given that Cohn was said to be remaining in his role to convince Trump to reverse his trade policy views, or at least temper them.
Predictably USDJPY is wearing the initial brunt of the move, and in general, the Cohn announcement is reversing the positive risk sentiment from the unexpected news from North Korea after reports that North Korea is open to denuclearisation if the safety of its regime is guaranteed.
While the world appears to be in a safer place this morning due to the denuclearisation olive branch offered by North Korea, the market is no less safe from the wrath of Trump’s trade policies.
Gold Prices
Gold was trading positively overnight on the back of the softer USD trend BS continues to perform exceptionally well on that narrative. But prices will remain firmly supported on the tariff tail risks from Cohn departure as the tariff gambit hits the market again with blunt force.
Oil Prices
What goes up must come down or the opposite in the case of US oil inventories data. The American Petroleum Institute (API) reported a considerable build of 5.661 million barrels for the week ending March 2, e doubling up analysts expectations. Early trade WTI prices remain tentatively supported by the weaker dollar. But with the overhang from the Cohn resignation yet to filter through market’s, risk aversion could see OIl prices move lower during today session.
Overnight long USD hedges were unwound as on the news from South Korea that North Korea was willing to hold talks with the United States on denuclearisation
Currency Markets
Japanese Yen
A bit of a topsy-turvy 24 hours for USDJPY spiked on the Korea headlines from 105.90 towards 106.40, which was pips shy of the significant 106.50 support. But is back plumbing the depths this morning as Tariffs are back in play on the back of Cohn’s resignation.
US politics is an absolute mess inspiring little confidence in the President, and this real-life political melodrama unfolds it hard to avoid parallels with Tumps for TV show The Apprentice.
The Malaysian Ringgit
Decision day for the BNM but the market is expecting few if any fireworks. Regional currency sentiment received a boost after surprising news that North Korea is open to denuclearisation if the safety of its regime is guaranteed.
The prospect of trade tariffs is raising their ugly head again, but when all is said and done, these tit-for-tat tariffs are not significant enough factor to weigh on MYR sentiment let alone derail the buoyant global growth narrative.
By: Stephen Innes
Head of Trading APAC at OANDA
Cohn Shocker
The morning Whitehouse shocker is that Gary Cohn is resigning as head of the White House’s National Economic Council. His resignation increased the risk tenfold that President Trump will follow through with far-reaching trade tariffs given that Cohn was said to be remaining in his role to convince Trump to reverse his trade policy views, or at least temper them.
Predictably USDJPY is wearing the initial brunt of the move, and in general, the Cohn announcement is reversing the positive risk sentiment from the unexpected news from North Korea after reports that North Korea is open to denuclearisation if the safety of its regime is guaranteed.
While the world appears to be in a safer place this morning due to the denuclearisation olive branch offered by North Korea, the market is no less safe from the wrath of Trump’s trade policies.
Gold Prices
Gold was trading positively overnight on the back of the softer USD trend BS continues to perform exceptionally well on that narrative. But prices will remain firmly supported on the tariff tail risks from Cohn departure as the tariff gambit hits the market again with blunt force.
Oil Prices
What goes up must come down or the opposite in the case of US oil inventories data. The American Petroleum Institute (API) reported a considerable build of 5.661 million barrels for the week ending March 2, e doubling up analysts expectations. Early trade WTI prices remain tentatively supported by the weaker dollar. But with the overhang from the Cohn resignation yet to filter through market’s, risk aversion could see OIl prices move lower during today session.
Overnight long USD hedges were unwound as on the news from South Korea that North Korea was willing to hold talks with the United States on denuclearisation
Currency Markets
Japanese Yen
A bit of a topsy-turvy 24 hours for USDJPY spiked on the Korea headlines from 105.90 towards 106.40, which was pips shy of the significant 106.50 support. But is back plumbing the depths this morning as Tariffs are back in play on the back of Cohn’s resignation.
US politics is an absolute mess inspiring little confidence in the President, and this real-life political melodrama unfolds it hard to avoid parallels with Tumps for TV show The Apprentice.
The Malaysian Ringgit
Decision day for the BNM but the market is expecting few if any fireworks. Regional currency sentiment received a boost after surprising news that North Korea is open to denuclearisation if the safety of its regime is guaranteed.
The prospect of trade tariffs is raising their ugly head again, but when all is said and done, these tit-for-tat tariffs are not significant enough factor to weigh on MYR sentiment let alone derail the buoyant global growth narrative.
GBP/USD – British Pound Edges Higher, Investors Eye ADP Employment Report
Source: Market Pulse
By: Kenny Fisher
Currency Analyst at Market Pulse
The British pound has posted gains on Tuesday, continuing the upward movement seen on Monday. In North American trade, GBP/USD is trading at 1.3884, up 0.26% on the day. In economic news, there are no major indicators in the US or the UK. In the US, Factory Orders were unexpectedly soft, with a decline of 1.4%. This was well short of the estimate of -0.4%. On Wednesday, the US releases ADP Nonfarm Employment Change.
Tensions are growing between London and Brussels as the Brexit deadline of March 2019 looms ever closer. Last week, there were sharp exchanges between the two sides after the EU releases a draft of the legal framework of the Brexit agreement. On Friday, Prime Minister May outlined her vision of relations between the EU and Britain after Brexit. May sought to lower the recent sharp rhetoric surrounding Brexit, saying that both sides needed to show flexibility in order to reach an agreement. May said that she was seeking a free trade agreement with the EU that included financial services. The response from Brussels has been lukewarm, with some policymakers saying that Britain continues to operate under the illusion that it can leave the club but still enjoy the benefits.
Over in the US, the “tariff tussle” shows no sign of being resolved anytime soon. US President Trump appears set on applying stiff tariffs on steel imports, much to the consternation of the European Union and other US trading partners. However, there is plenty of domestic opposition to Trump’s plan, as Republican lawmakers, including House Speaker Paul Ryan, have come out strongly against the move. If Trump doesn’t back down, the Republicans could even resort to legislation to limit Trump’s authority on tariffs. The announcement of the tariffs last week sent the dollar broadly lower, and if the tariffs are introduced, negative investor sentiment could send the greenback to lower levels.
By: Kenny Fisher
Currency Analyst at Market Pulse
The British pound has posted gains on Tuesday, continuing the upward movement seen on Monday. In North American trade, GBP/USD is trading at 1.3884, up 0.26% on the day. In economic news, there are no major indicators in the US or the UK. In the US, Factory Orders were unexpectedly soft, with a decline of 1.4%. This was well short of the estimate of -0.4%. On Wednesday, the US releases ADP Nonfarm Employment Change.
Tensions are growing between London and Brussels as the Brexit deadline of March 2019 looms ever closer. Last week, there were sharp exchanges between the two sides after the EU releases a draft of the legal framework of the Brexit agreement. On Friday, Prime Minister May outlined her vision of relations between the EU and Britain after Brexit. May sought to lower the recent sharp rhetoric surrounding Brexit, saying that both sides needed to show flexibility in order to reach an agreement. May said that she was seeking a free trade agreement with the EU that included financial services. The response from Brussels has been lukewarm, with some policymakers saying that Britain continues to operate under the illusion that it can leave the club but still enjoy the benefits.
Over in the US, the “tariff tussle” shows no sign of being resolved anytime soon. US President Trump appears set on applying stiff tariffs on steel imports, much to the consternation of the European Union and other US trading partners. However, there is plenty of domestic opposition to Trump’s plan, as Republican lawmakers, including House Speaker Paul Ryan, have come out strongly against the move. If Trump doesn’t back down, the Republicans could even resort to legislation to limit Trump’s authority on tariffs. The announcement of the tariffs last week sent the dollar broadly lower, and if the tariffs are introduced, negative investor sentiment could send the greenback to lower levels.
USD/JPY – Japanese Yen Ticks Higher, GDP Next
By: Kenny Fisher
Currency Analyst at Market Pulse
The Japanese yen has posted small gains in the Tuesday session. In North American trade, USD/JPY is trading at 106.17, down 0.03% on the day. On the release front, there are no Japanese indicators on the schedule. In the US, Factory Orders were unexpectedly soft, with a decline of 1.4%. This was well short of the estimate of -0.4%. On Wednesday, the US releases ADP Nonfarm Employment Change and Japan publishes Final GDP.
The Japanese yen continues to look strong, and last week, the dollar dropped close to the 105 line, its lowest level since early November. The yen received a boost on Friday, as Bank of Japan Governor Haruhiko Kuroda said that the BoJ would consider exiting from its ultra-accommodative monetary policy if its inflation target of around 2020 was reached in early 2020. Kuroda’s remarks were unusual in that they mentioned a possible “exit” from its stimulus program, and this caught the markets off guard. The BoJ has been lagging behind the Fed and other central banks in winding up stimulus, but Kuroda added that the Bank would normalize policy if “economic conditions become favorable and our price target is achieved”. Although inflation remains well below target, any further hints about normalization from the BoJ could strengthen the yen.
The “tariff tussle” shows no sign of being resolved anytime soon. US President Trump appears set on applying stiff tariffs on steel imports, much to the consternation of the European Union and other US trading partners. However, there is plenty of domestic opposition to Trump’s plan, as Republican lawmakers, including House Speaker Paul Ryan, have come out strongly against the move. If Trump doesn’t back down, the Republicans could even resort to legislation to limit Trump’s authority on tariffs. The announcement of the tariffs last week bolstered the yen, and if the tariffs are introduced, negative investor sentiment could send the greenback to lower levels
Source: https://www.marketpulse.com/20180306/usdjpy-japanese-yen-ticks-higher-gdp-next/
Currency Analyst at Market Pulse
The Japanese yen has posted small gains in the Tuesday session. In North American trade, USD/JPY is trading at 106.17, down 0.03% on the day. On the release front, there are no Japanese indicators on the schedule. In the US, Factory Orders were unexpectedly soft, with a decline of 1.4%. This was well short of the estimate of -0.4%. On Wednesday, the US releases ADP Nonfarm Employment Change and Japan publishes Final GDP.
The Japanese yen continues to look strong, and last week, the dollar dropped close to the 105 line, its lowest level since early November. The yen received a boost on Friday, as Bank of Japan Governor Haruhiko Kuroda said that the BoJ would consider exiting from its ultra-accommodative monetary policy if its inflation target of around 2020 was reached in early 2020. Kuroda’s remarks were unusual in that they mentioned a possible “exit” from its stimulus program, and this caught the markets off guard. The BoJ has been lagging behind the Fed and other central banks in winding up stimulus, but Kuroda added that the Bank would normalize policy if “economic conditions become favorable and our price target is achieved”. Although inflation remains well below target, any further hints about normalization from the BoJ could strengthen the yen.
The “tariff tussle” shows no sign of being resolved anytime soon. US President Trump appears set on applying stiff tariffs on steel imports, much to the consternation of the European Union and other US trading partners. However, there is plenty of domestic opposition to Trump’s plan, as Republican lawmakers, including House Speaker Paul Ryan, have come out strongly against the move. If Trump doesn’t back down, the Republicans could even resort to legislation to limit Trump’s authority on tariffs. The announcement of the tariffs last week bolstered the yen, and if the tariffs are introduced, negative investor sentiment could send the greenback to lower levels
Source: https://www.marketpulse.com/20180306/usdjpy-japanese-yen-ticks-higher-gdp-next/
Election Result Could Have Significant Meaning For Italy’s Relationship With EU
Italy’s election result showed a seismic shift in the country’s political scene with both the anti-establishment Five Star Movement (M5S) and right-wing Lega party seeing strong gains in the vote Sunday.Meanwhile, parties like Silvio Berlusconi’s Forza Italia and the ruling Democratic Party (PD) fell short of expectations, prompting PD leader and former Prime Minister Matteo Renzi to resign.Italy’s former Foreign Minister Giulio Terzi di Sant’Agata told CNBC Monday that the vote had “significant meaning” for Italy’s relationship with its neighbors.”It’s been a clear indication that the majority of Italian voters want a change. They want a change that is significant in relation to a number of issues which are considered a high-priority now by at least 60 percent, and perhaps more, of Italian voters.”
Source: https://www.marketpulse.com/20180306/election-result-could-have-significant-meaning-for-italys-relationship-with-eu/
Source: https://www.marketpulse.com/20180306/election-result-could-have-significant-meaning-for-italys-relationship-with-eu/
Marketpulse: EU Targeting Iconic US Brands in Retaliation to Trump Tariffs
The European Commission has reportedly proposed tariffs of 25 percent on imports of U.S. steel, clothing and other industrial goods in retaliation to President Donald Trump’s proposed tariffs on steel and aluminum.The executive arm of the European Union reportedly plans to target $3.5 billion of goods imported from the U.S., including T-shirts, whisky, motorcycles and ladders, if Trump decides to implement international duties on steel and aluminum.The list of goods was revealed in a report by Bloomberg on Tuesday, which cited a draft list drawn up by the commission. According to the report, the commission discussed the retaliatory levy on U.S. goods with representatives of EU governments on Monday evening
Investopedia: Trump Faces Pushback on Tariffs but Says He Will Not Back Down
Inside the White House, there still appeared to be confusion about the timing and extent of the planned tariffs, which would hit allies like Canada and Mexico hard.
Efforts by Trump and U.S. trade negotiators to link the NAFTA trade pact talks to the duties received short shrift from Ottawa and Mexico City.
Leading Republicans turned up the pressure on Trump, with House of Representatives Speaker Paul Ryan leading the charge. Ryan's home state of Wisconsin would be hit by proposed European counter-measures on Harley-Davidson Inc motorbikes.
Representative Kevin Brady, another top House Republican, called on Trump not to hit America's closest allies.
Business leaders are pressing for a meeting with Trump to brief him on the negative repercussions of the tariffs on companies that use steel and aluminum, a source familiar with the matter said.
A meeting had not yet been set up, the source said. The White House had no comment.
The planned tariffs have roiled world stock markets as investors worried about the prospect of an escalating trade war that would derail global economic growth. Stocks across the globe rose on Monday, however, after four days in decline as investors saw the tariff threats as a U.S. negotiating tactic and not a done deal and as pressure grew on Trump to back off.
"We're not backing down," Trump said during a White House meeting with Israeli Prime Minister Benjamin Netanyahu. "I don't think you're going to have a trade war," he added, without elaborating.
Canadian Prime Minister Justin Trudeau called Trump on Monday to tell him the tariffs would be an impediment to talks on updating NAFTA, a Canadian government official said.
Canada is the single largest supplier of steel and aluminum to the United States. In the call, Trudeau "forcefully defended" Canadian workers and industries, said the official, describing the conversation as constructive.
Earlier comments from Trump had stoked talk of a global trade war as he described them as easy to win and issued a threat to German carmakers. One of those, BMW, runs a plant in the United States that is the largest single autos exporter in the country and has created thousands of jobs.
Most responses to Trump's proposed tariffs have been targeted. The European Union said it would hit Harleys, bourbon and jeans, iconic American products. It did not threaten to ramp up the issue.
China has been largely mum, urging caution, and both Canada and Mexico have stressed the targeted nature of any response.
STRESSES INSIDE THE WHITE HOUSE?
Trump was expected to finalize the planned tariffs later in the week, although some observers familiar with the process said it could occur next week. The initial announcement by Trump last week came as a surprise.
The United States, Mexico and Canada have been holding talks over changes to the North American Free Trade Agreement, a pact that Trump has threatened to abandon.
Six months of tense talks have produced little in the way of progress and a move by Washington to link the steel and aluminum tariffs to progress on NAFTA was rebuffed by Canada and Mexico.
U.S. Trade Representative Robert Lighthizer also attempted to drive a wedge between Canada and Mexico when he suggested the United States would be willing to hold bilateral, rather than trilateral talks. The two countries again stood firm.
In Washington, aides scrambled to meet Trump’s demand for the paperwork to be completed for a formal announcement. The exact timing was unclear as the tariff documentation had to be drafted and go through a variety of reviews, a process that takes days, an administration official said.
There was always a chance that Trump ”could amend his initial announcement” to take account of the concerns expressed about it, said a source familiar with the internal debate at the White House.
TRUMP'S TRADE TRAIL
Trump has frequently talked tough on trade, although his actions have not always matched his words. On his first day in office in January 2017, he withdrew from the 14-nation Trans Pacific Partnership agreement, a deal that was dead on arrival in the U.S. Congress in any case.
He has frequently tweeted and said that he would pull out of NAFTA, which he has called a jobs killer. But a year after taking office, the 1994 deal remains intact.
Trump has approved a series of small-scale trade actions, of which the steel and aluminum duties would be a part. Taken together with actions on washing machines and solar panels, the proposed move accounts for just 4.1 percent of U.S. imports. In terms of global trade, they are just 0.6 percent, investment bank Morgan Stanley said in a report.
The head of the World Trade Organization warned of a real risk of triggering an escalation of global trade barriers and a deep recession, even as financial markets and many economists started to discount the risk of a global crisis.
"We must make every effort to avoid the fall of the first dominoes. There is still time," WTO Director General Roberto Azevedo told the heads of WTO delegations at a closed-door meeting in Geneva.
(Additional reporting by Susan Heavey, Steve Holland, Eric Walsh and Susan Heavey in Washington, Adriana Barrera, Sharay Angulo, Lesley Wroughton and David Ljunggren in Mexico City, Rodrigo Campos in New York and Tom Miles in Geneva; Writing by Frances Kerry and David Chance; Editing by Andrea Ricci and Peter Cooney)
Read more: Trump Faces Pushback on Tariffs but Says He Will Not Back Down | Investopedia https://www.investopedia.com/partner/reuters/trump-faces-pushback-tariffs-says-he-will-not-back-down/#ixzz58z5UjMlR
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Dow down for fifth straight day as trade war fear weighs
By: Ankur Banerjee and Sruthi Shankar
Reuters
(Reuters) - The Dow Jones Industrial Average fell for the fifth straight day on Monday as concerns about a global trade war following President Donald Trump's threat to impose hefty tariffs kept investors on the edge.
Trump on Monday appeared to suggest that Canada and Mexico could win exemptions to the planned sweeping tariffs on steel and aluminum if the two countries sign a new NAFTA trade deal and take other steps.
The S&P 500 ended another rocky week on an upbeat note on Friday, but major indexes still posted their worst week of losses since early February after Trump promised tariffs on aluminum and steel and talked bullishly about "winning" a trade war economists say could decimate growth.
"The President just tweeted a while ago, sounding tough on trade with Canada and Mexico," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"Some of it will get passed on to consumers in terms of higher prices ... It'll add a little bit to inflation. But I think it's more an uncertainty," Brown added.
Eight of 11 S&P 500 indexes were lower on Monday, led by financials (SPSY) and information technology (SPLRCT).
World stocks and emerging markets fell for the fifth straight day on Monday, with investors also worrying that Italian voters had flocked to anti-establishment and far-right groups in record numbers and had delivered a hung parliament.
Investors dumped stocks in favor of traditional safe havens including gold and the Japanese yen, with gold touching a near one-week high on Monday.
"Markets' inability to regain confidence is likely to keep stocks defensive," First Standard Financial Chief Market Economist Peter Cardillo said.
At 9:41 a.m. EDT, the Dow Jones industrial average (DJI) was down 64.93 points, or 0.26 percent, at 24,473.13, the S&P 500 (SPX) was down 6.76 points, or 0.251184 percent, at 2,684.49 and the Nasdaq Composite (IXIC) was down 20.10 points, or 0.28 percent, at 7,237.76.
Shares in chipmaker Qualcomm (O:QCOM) dipped 1.6 percent after the Committee on Foreign Investment in the United States (CFIUS) ordered the company to postpone an annual shareholder meeting, giving it more time to resist efforts by Broadcom Ltd (O:AVGO) to force through a $117 billion merger.
Shares of Clearside Biomedical (O:CLSD) jumped 55 percent after the drug developer's eye drug met the main goal in a late-stage study, while Dermira (O:DERM) plunged 60 percent after the company abandoned its acne drug.
Europe's second-biggest insurer XL Group Ltd (N:XL) rose 30 percent after being acquired by France's AXA (PA:AXAF) for $15.3 billion.
MarketPulse.com: Dollar Retreats as Trade War Talk Escalates
4 central banks (RBA, BOJ, BOC and ECB) expected to keep rates unchanged
US wages could rise increasing inflation anxiety
Employment data to be released in the US and Canada
Read Full Article at Market Pulse
By:Alfonso Esparza
Senior Currency Analyst at Market Pulse
Marketpulse: USD/CAD – Canadian Dollar Slide Continues After Weak GDP
Source: Market Pulse
www.marketpulse.com
By: Kenny Fisher
Currency Analyst at Market Pulse
The Canadian dollar has posted losses in the Monday session. Early in the North American session, USD/CAD is trading at 1.2959, up 0.58% on the day. On the release front, there are no Canadian events. In the US, today’s key indicator is Non-Manufacturing PMI, which is expected to dip to 58.9 points. On Tuesday, Canada releases Ivey PMI.
Canada’s economy slowed down in January, as GDP posted a weak gain of 0.1%, matching the estimate. On an annualized basis, growth in the fourth quarter was 1.7%, considerably lower than the Bank of Canada’s most recent projection of 2.5%. With the Fed expected to raise rates up to four times in 2018, the BoC will be pressed to match rate hikes with its southern neighbor, or risk having the Canadian currency head lower. Currently, the BoC is projecting only two rate hikes in 2018. Strong growth has propelled the BoC to raise rates three times since July, but there are some factors weighing against a rate hike before May. First, fourth quarter expansion may fall short of the BoC’s forecast of 2.5%. As well, the future of NAFTA remains unclear, as negotiations between Canada, Mexico and the US have floundered. If the US decides to pull out of NAFTA, the repercussions on the Canadian economy could be significant, and the BoC will have to delay any plans to raise rates.
Canadian policymakers continue to look with growing alarm at protectionist moves by the Trump administration. Negotiations on NAFTA have not shown much progress, as a seventh and final round of talks are underway in Mexico City. As if the headache of a possible blowup of NAFTA wasn’t bad enough, the Canadian government now has to deal with the stiff imports that President Trump is set to apply to steel and aluminum imports. With some 80% of Canadian exports heading south to the US, Canada can ill afford a trade war with its giant neighbor. Still, the government will be under pressure to respond forcefully and stand up for its domestic steel industry.
USD/CAD Fundamentals
Monday (March 5)
9:45 US Final Services PMI. Estimate 55.9
10:00 US ISM Non-Manufacturing PMI. Estimate 58.9
13:15 US FOMC Member Randal Quarles Speaks
Tuesday (March 6)
10:00 Canadian Ivey PMI. Estimate 56.3
*All release times are GMT
*Key events are in bold
USD/CAD for Monday, March 5, 2018
USD/CAD, March 5 at 8:40 EST
Open: 1.2884 High: 1.2939 Low: 1.2865 Close: 1.2959
USD/CAD Technical
S3 S2 S1 R1 R2 R3
1.2757 1.2865 1.2920 1.3014 1.3165 1.3270
Resistance lines continue to fall as USD/CAD moves higher. The pair posted slight gains in the Asian session and continues to move higher in European trade
1.2920 is providing support
1.3014 is the next resistance line
Current range: 1.2920 to 1.3014
Further levels in both directions:
Below: 1.2920, 1.2865, 1.2757 and 1.2630
Above: 1.3014, 1.3165 and 1.3270
OANDA’s Open Positions Ratio
In the Monday session, USD/CAD ratio is showing short positions with a majority (66%). This is indicative of trader bias towards USD/CAD reversing directions and moving lower.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.
DailyFX: EUR/USD Weekly Technical Forecast: Euro May Be in Trouble After Bounce
Source: DailyFX
By: Paul Robinson, Market Analyst
EUR/USD Highlights:
EUR/USD found buyers late last week, but the bounce may result in a lower-high
A lower-high could be quite important after double-topping at the 2008 trend-line
Event risk comes by way of ECB meeting on Thursday, NFPs on Friday
To view the longer-term technical and fundamental outlook for the Euro, or to see our Top Trading Opportunities for 2018, check out the DailyFX Trading Guides.
EUR/USD is coming perilously close to carving out a bearish price sequence in the days ahead. We’ve been discussing quite a bit lately the impact of the 2008 trend-line, and as long as the euro stays below it will struggle. The struggle could turn into an outright sell-off if a bounce soon fails.
The double-top at the 2008 trend-line put into motion the notion we may be seeing a top form at an important line of resistance. And now with EUR/USD possibly putting in a lower-low from earlier last month, in the days ahead the euro may be ready to turn down from the long-term trend-line for an extended period of time.
The trend since last year is still pointed up, but a strong turn down will have important support by way of the 2017 high and trend-line from April come under fire. A solid close below 12100 is seen as a possible catalyst for a sizable unwind by large speculators in the futures market. Positioning has been hovering in record territory for a while and suggests on a turn of trend there will be plenty of fuel to drive the single-currency lower.
Looking at retail positioning, traders are net short EUR/USD (IGCS index is at -1.8), which on a contrarian basis is a bullish signal with sellers out pacing buyers by nearly 2 to 1, but should sellers show up in earnest that could quickly change in favor of lower prices as traders flips long. It’s worth keeping an eye on. Check out the IG Client Sentiment page for further details.
In terms of event risk next week, a rise in volatility could result from the ECB on Thursday and/or the U.S. jobs report on Friday. For estimates and release times, check out the economic calendar.
Whether you are a new trader building a foundation or an experienced trader struggling (it happens to the best), here are some ideas for Building Confidence in Trading
Resources for Forex Traders
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---Written by Paul Robinson, Market Analyst
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FXEmpire: Flight-to-Safety Buying Crushes USD/JPY
Source: FXEmpire.com
By: James Hyerczyk
The Yen also rallied after Bank of Japan Governor Haruhiko Kuroda surprised currency markets by saying the central bank would consider an exit from its ultra-easy monetary policy if it met its inflation target in the year ending in March 2020.
The U.S. Dollar finished higher against a basket of currencies in a week highlighted by a couple of major events that led to increased volatility. The first event helped drive the index to its highest level since January 12. The second event helped stop the rally while erasing most of the market’s earlier gains.
March U.S. Dollar Index futures settled the week at 89.906, up 0.098 or 0.11%.
By: James Hyerczyk
The Yen also rallied after Bank of Japan Governor Haruhiko Kuroda surprised currency markets by saying the central bank would consider an exit from its ultra-easy monetary policy if it met its inflation target in the year ending in March 2020.
The U.S. Dollar finished higher against a basket of currencies in a week highlighted by a couple of major events that led to increased volatility. The first event helped drive the index to its highest level since January 12. The second event helped stop the rally while erasing most of the market’s earlier gains.
March U.S. Dollar Index futures settled the week at 89.906, up 0.098 or 0.11%.
Day Trader
What is Forex Day Trading?
One of the most popular ways of participating in the financial markets of the world is through a discipline known as day trading. Day trading is the active buying and selling of financial instruments within short-term, intraday time frames.
In contrast to more traditional forms of capital investment, day trading aims to achieve profitability through frequently entering and exiting a market. Instead of buying or selling a security and waiting weeks or months for capital appreciation, day traders take many small gains and losses every day in the quest for a positive bottom line.
The main goal of day trading is simple: achieve long-term profitability through executing as many winning trades as possible. To put it another way: the primary objective of a day trader is to ensure that profit outweighs loss and victories are always greater than defeats.
Elements Of Day Trading
There are three major facets of short-term trading that must be thoroughly addressed within the context of a comprehensive trading plan before an individual starts the process:
Trade selection: Depending on each trader’s adopted methodology or system, concrete guidelines governing the identification of a trading opportunity may be necessary. Ideally, trade selection is driven by a statistically verifiable “edge,” or positive expectation. Predefined criteria pertaining to trade setups enable the trader to enter the market consistently and with confidence.
Trade management: Upon entrance to the market, management of the newly opened position becomes a task crucial to the trader. The employment of protective stop-loss orders, in addition to profit targets, are basic methods of preserving capital while maximising the potential for gain. Trailing stops and proactively scaling in and out of positions are more complex examples of market exit strategies.
Money management: A comprehensive money management strategy is an absolute necessity when trading on an intraday basis. The proper use of leverage is a key part of determining the correct position size and aligning risk vs. reward. Through administering sound money management principles, a trader can avoid the many problems related to a dwindling account balance.
Intermediate-term trading, swing trading and long-term capital investment implement the use of a time horizon measured in days, weeks, months and years. Active day trading is concerned with time denominations of hours, minutes and seconds.
There is rarely ample time to craft quality trading decisions on the fly. Without first performing the necessary due diligence regarding the three key areas of day trading, an individual new to the market is likely to fall victim to many avoidable dangers.
Day Trading The Forex Market
Perhaps the most appealing venue for an aspiring day trader is the forex market. The forex market is an over-the-counter (OTC) market specialising in the trade of global currencies. The average daily traded volume measures anywhere from US$3.5 trillion to US$5.5 trillion. In comparison, the average daily traded volume for the New York Stock Exchange (NYSE) typically trades between a value of US$30 billion and US$100 billion.1)
Short-term currency trading on the forex market affords participants several distinct advantages:
Variety: In addition to pairs based upon the eight global “major” currencies, many smaller, regional currency pairings are also available for trade.
Liquidity: The daily volume of trade is enormous. Large volumes ensure that a trader can interact with the market efficiently.
Leverage: Forex currency pairings are traded heavily on margin. In forex, leverage is used to either buy or sell large quantities of currency.
Opportunity: The forex market is open for trading 24 hours a day, five days a week. Extensive trading sessions produce a greater number of trading opportunities, no matter the currency pair or approach.
Summary
The forex market is often viewed as a day trader’s dream. Frequent opportunity coupled with the availability of financial leverage are attractive characteristics to anyone interested in pursuing a career as a professional day trader.
However, common pitfalls such as overtrading and the improper use of leverage can lead to substantial capital loss. Although the development of a comprehensive trading plan can help mitigate these issues, short-term trading remains a formidable challenge not suitable for everyone.
Additional Reading
Sources: FXCM
Reference: Retrieved 16 November 2016 http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=tables&key=320&category=3
One of the most popular ways of participating in the financial markets of the world is through a discipline known as day trading. Day trading is the active buying and selling of financial instruments within short-term, intraday time frames.
In contrast to more traditional forms of capital investment, day trading aims to achieve profitability through frequently entering and exiting a market. Instead of buying or selling a security and waiting weeks or months for capital appreciation, day traders take many small gains and losses every day in the quest for a positive bottom line.
The main goal of day trading is simple: achieve long-term profitability through executing as many winning trades as possible. To put it another way: the primary objective of a day trader is to ensure that profit outweighs loss and victories are always greater than defeats.
Elements Of Day Trading
There are three major facets of short-term trading that must be thoroughly addressed within the context of a comprehensive trading plan before an individual starts the process:
Trade selection: Depending on each trader’s adopted methodology or system, concrete guidelines governing the identification of a trading opportunity may be necessary. Ideally, trade selection is driven by a statistically verifiable “edge,” or positive expectation. Predefined criteria pertaining to trade setups enable the trader to enter the market consistently and with confidence.
Trade management: Upon entrance to the market, management of the newly opened position becomes a task crucial to the trader. The employment of protective stop-loss orders, in addition to profit targets, are basic methods of preserving capital while maximising the potential for gain. Trailing stops and proactively scaling in and out of positions are more complex examples of market exit strategies.
Money management: A comprehensive money management strategy is an absolute necessity when trading on an intraday basis. The proper use of leverage is a key part of determining the correct position size and aligning risk vs. reward. Through administering sound money management principles, a trader can avoid the many problems related to a dwindling account balance.
Intermediate-term trading, swing trading and long-term capital investment implement the use of a time horizon measured in days, weeks, months and years. Active day trading is concerned with time denominations of hours, minutes and seconds.
There is rarely ample time to craft quality trading decisions on the fly. Without first performing the necessary due diligence regarding the three key areas of day trading, an individual new to the market is likely to fall victim to many avoidable dangers.
Day Trading The Forex Market
Perhaps the most appealing venue for an aspiring day trader is the forex market. The forex market is an over-the-counter (OTC) market specialising in the trade of global currencies. The average daily traded volume measures anywhere from US$3.5 trillion to US$5.5 trillion. In comparison, the average daily traded volume for the New York Stock Exchange (NYSE) typically trades between a value of US$30 billion and US$100 billion.1)
Short-term currency trading on the forex market affords participants several distinct advantages:
Variety: In addition to pairs based upon the eight global “major” currencies, many smaller, regional currency pairings are also available for trade.
Liquidity: The daily volume of trade is enormous. Large volumes ensure that a trader can interact with the market efficiently.
Leverage: Forex currency pairings are traded heavily on margin. In forex, leverage is used to either buy or sell large quantities of currency.
Opportunity: The forex market is open for trading 24 hours a day, five days a week. Extensive trading sessions produce a greater number of trading opportunities, no matter the currency pair or approach.
Summary
The forex market is often viewed as a day trader’s dream. Frequent opportunity coupled with the availability of financial leverage are attractive characteristics to anyone interested in pursuing a career as a professional day trader.
However, common pitfalls such as overtrading and the improper use of leverage can lead to substantial capital loss. Although the development of a comprehensive trading plan can help mitigate these issues, short-term trading remains a formidable challenge not suitable for everyone.
Additional Reading
- How To Become A Day Trader
- Can You Day Trade For A Living?
- Day Trading Equipment For Beginners
Sources: FXCM
Reference: Retrieved 16 November 2016 http://www.nyxdata.com/nysedata/asp/factbook/viewer_edition.asp?mode=tables&key=320&category=3
Scalpers
Source and read more: Investopedia: Is scalping a viable forex trading strategy?
What is Forex Scalpers
Scalping in the forex market involves trading currencies based on a set of real-time analysis. The purpose of scalping is to make a profit by buying or selling currencies and holding the position for a very short time and closing it for a small profit. Many trades are placed throughout the trading day and the system that is used by these traders is usually based on a set of signals derived from technical analysis charting tools, and is made up of a multitude of signals, that create a buy or sell decision when they point in the same direction. A forex scalper looks for a large number of trades for a small profit each time.
Forex Scalping System
A forex scalping system can be either manual, where the trader looks for signals and interprets whether to buy or sell; or automated, where the trader "teaches" the software what signals to look for and how to interpret them. The timely nature of technical analysis makes real-time charts the tool of choice for forex scalpers.
Forex Scalper
The forex market is large and liquid; it is thought that technical analysis is a viable strategy for trading in this market. It can also be assumed that scalping might be a viable strategy for the retail forex trader. It is important to note though, that the forex scalper usually requires a larger deposit, to be able to handle the amount leverage they must take on to make the short and small trades worthwhile
What is Forex Scalpers
Scalping in the forex market involves trading currencies based on a set of real-time analysis. The purpose of scalping is to make a profit by buying or selling currencies and holding the position for a very short time and closing it for a small profit. Many trades are placed throughout the trading day and the system that is used by these traders is usually based on a set of signals derived from technical analysis charting tools, and is made up of a multitude of signals, that create a buy or sell decision when they point in the same direction. A forex scalper looks for a large number of trades for a small profit each time.
Forex Scalping System
A forex scalping system can be either manual, where the trader looks for signals and interprets whether to buy or sell; or automated, where the trader "teaches" the software what signals to look for and how to interpret them. The timely nature of technical analysis makes real-time charts the tool of choice for forex scalpers.
Forex Scalper
The forex market is large and liquid; it is thought that technical analysis is a viable strategy for trading in this market. It can also be assumed that scalping might be a viable strategy for the retail forex trader. It is important to note though, that the forex scalper usually requires a larger deposit, to be able to handle the amount leverage they must take on to make the short and small trades worthwhile
Italian General Election
The 2018 Italian general election is due to be held on March 4, 2018.
Voters will elect the 630 members of the Chamber of Deputies and the 315
elective members of the Senate of the Republic for the 18th legislature
of the Italian Republic.
Country: Italy
Currency: EUR
Significance: Bullish
Country: Italy
Currency: EUR
Significance: Bullish
FOREX-Dollar touches five-week high on U.S. rate outlook
Source: https://finance.yahoo.com/news/forex-dollar-touches-five-week-155031940.html
* Fed chair's testimony read as striking hawkish tone * Weaker-than-expected U.S. data fails to tarnish dollar * Euro zone inflation slows, clipping euro bulls * Yen edges higher after BoJ trims super-long JGB buying (Recasts, adds comment, FX table, updates prices, changes byline, dateline; previous LONDON) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 28 (Reuters) - The dollar rose to five-week highs on Wednesday, bolstered by an upbeat assessment of the U.S. economy from the Federal Reserve's new chairman, which raised expectations the central bank could aggressively increase interest rates over the next two years.
The greenback in February was on track to post its best monthly performance since November 2016.
Also helping the dollar was a euro that fell to six-week lows after euro zone inflation slowed to a 14-month low, underlining the European Central Bank's caution in removing stimulus in the region.
The dollar also rose to three-week highs against the Swiss franc, a two-week peak versus sterling and a two-month high against the Canadian dollar.
"The dollar has found tailwinds in America's sturdy economy and its hawkish central bank," said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.
Fed Chairman Jerome Powell struck an optimistic tone about the U.S. economy on Tuesday, fueling views the U.S. central bank would raise rates four times this year rather than three.
Slightly disappointing U.S. data on Wednesday - a lower-than-expected second estimate of gross domestic product for the fourth quarter and a weaker-than-forecast report on the U.S. Midwest manufacturing sector - failed to dent the dollar's rally.
Data showed U.S. GDP expanded at a 2.5 percent annual rate in the fourth quarter, instead of the previously reported 2.6 percent pace, declining from the third quarter's brisk 3.2 percent.
The Chicago purchasing management index was a weaker-than-expected 61.9 in February, compared with a consensus forecast of 64.2.
In midmorning trading, the dollar index rose 0.3 percent to 90.687, after earlier notching a five-week peak.
Meanwhile, the euro has stumbled after a strong start to the year in which investors speculated that ECB would withdraw stimulus. The euro fell to a six-week low and was last down 0.3 percent at $1.2189.
Political developments are also making euro investors cautious. Italians are preparing to vote in a national election on Sunday, while the leading political parties in Germany decide on a coalition deal that would secure Angela Merkel a fourth term as chancellor.
Against the yen, however, the dollar fell 0.3 percent to 106.98 yen.
The yen rose after the Bank of Japan on Wednesday trimmed the amount of super-long Japanese government bonds it offered to buy at its regular debt-buying operation.
The yen, a safe-haven currency that attracts demand in times of economic uncertainty, also held firm after weak factory data from China undermined investor risk appetite
* Fed chair's testimony read as striking hawkish tone * Weaker-than-expected U.S. data fails to tarnish dollar * Euro zone inflation slows, clipping euro bulls * Yen edges higher after BoJ trims super-long JGB buying (Recasts, adds comment, FX table, updates prices, changes byline, dateline; previous LONDON) By Gertrude Chavez-Dreyfuss NEW YORK, Feb 28 (Reuters) - The dollar rose to five-week highs on Wednesday, bolstered by an upbeat assessment of the U.S. economy from the Federal Reserve's new chairman, which raised expectations the central bank could aggressively increase interest rates over the next two years.
The greenback in February was on track to post its best monthly performance since November 2016.
Also helping the dollar was a euro that fell to six-week lows after euro zone inflation slowed to a 14-month low, underlining the European Central Bank's caution in removing stimulus in the region.
The dollar also rose to three-week highs against the Swiss franc, a two-week peak versus sterling and a two-month high against the Canadian dollar.
"The dollar has found tailwinds in America's sturdy economy and its hawkish central bank," said Joe Manimbo, senior market analyst, at Western Union Business Solutions in Washington.
Fed Chairman Jerome Powell struck an optimistic tone about the U.S. economy on Tuesday, fueling views the U.S. central bank would raise rates four times this year rather than three.
Slightly disappointing U.S. data on Wednesday - a lower-than-expected second estimate of gross domestic product for the fourth quarter and a weaker-than-forecast report on the U.S. Midwest manufacturing sector - failed to dent the dollar's rally.
Data showed U.S. GDP expanded at a 2.5 percent annual rate in the fourth quarter, instead of the previously reported 2.6 percent pace, declining from the third quarter's brisk 3.2 percent.
The Chicago purchasing management index was a weaker-than-expected 61.9 in February, compared with a consensus forecast of 64.2.
In midmorning trading, the dollar index rose 0.3 percent to 90.687, after earlier notching a five-week peak.
Meanwhile, the euro has stumbled after a strong start to the year in which investors speculated that ECB would withdraw stimulus. The euro fell to a six-week low and was last down 0.3 percent at $1.2189.
Political developments are also making euro investors cautious. Italians are preparing to vote in a national election on Sunday, while the leading political parties in Germany decide on a coalition deal that would secure Angela Merkel a fourth term as chancellor.
Against the yen, however, the dollar fell 0.3 percent to 106.98 yen.
The yen rose after the Bank of Japan on Wednesday trimmed the amount of super-long Japanese government bonds it offered to buy at its regular debt-buying operation.
The yen, a safe-haven currency that attracts demand in times of economic uncertainty, also held firm after weak factory data from China undermined investor risk appetite
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