Global Prime: Daily Market Digest

IvanGlobalPrime

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Period Of Balanced Flows In Forex Continues

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…


Scan Of The Markets



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.

I always begin my daily analysis by understanding the latest action in the equity market and nothing beats tapping into the S&P 500 as the ultimate barometer of where that risk balance stands.

So, what am I seeing as a new week kick in? I must say that the technical stance in the S&P 500 last Friday left us with a fairly constructive picture for a potential retest of the range high. Note, this week will be huge as we get some big names dropping their income expectations (Amazon, Apple..)

There is a lot to talk about this equity rally, as further upside may defy any logic when connecting the dots of where the real economy stands vs the valuation of assets, as legendary investor Icahn notes.

But we should not forget the magic hand played by the Fed, scrapping any moral hazard argument as it bails the very same companies that should receive punishment by over-levering pre-crisis. The increasing number of countries easing lock-downs, one may argue, is also contributing, even if the fear of a second wave of COVID-19 is a real tail risk.

The spike in the inverted VIX index into new trend highs (lower implied vol) at a time when the S&P 500 still has technical room until faced with resistance at 2,900.00, tells me there further spells of demand into high-beta currencies is still a scenario I can envision.

But even if equities paint a rather benign backdrop for another leg higher in intraday, assisted by that spike in the inverted VIX, the environment is still very much characterized by range-trading as the main trading proposition, which makes one’s engagement having to be more surgical in picking locations and targets to be eyeing for.

For further insights in the anatomy of identifying and playing ranges, which seems very fitting based on the current dynamics, I recently put out an educational video where I dive into this topic. The core principles explained in this video are playing out before our very own eyes in pretty much all the instruments analyzed in today’s video.

Let’s start looking at gold, as even in this market, which has been trending nicely to the upside, we are getting sufficient technical indications to make a case for more balanced flows. Match that with the divergences spotted in the S&P 500 and USD index, and for now, I can’t see further follow through continuation, even if the technical as one zooms things out into the daily are undeniable.

As I shift gears into the FX market, the first thing that jumped out is the cheap levels advertised in the EUR/USD around the 1.0735/40. Why? Huge divergence in the inverted USD index, meaning that this bear trend was unjustified from an aggregated flows standpoint, alongside the fact that such level was the 100% proj move. Precisely the backdrop, in my book, that has inspired buyers to return and that has so far transpired in a very solid buy-side campaign.

I will follow by sandwiching together GBP/USD and USD/JPY, as the technical dynamics are very similar, with volatility compression the name of the game as we keep navigating tight ranges. That said, bottom-side engagement has so far been warranted in both pairs based on where we stand in the USD index and equities for this matter.

Lastly, the Aussie is a currency that continues to go through a round of outperformance as it acts as the ultimate proxy to play the current ‘risk on’ mood. In this new COVID-19 era, as equities got hammered, Aussie too did go through a sharp depreciation, proving to be the most sensitive currency in the G8 FX complex. By the same token, the recovery in equities keeps providing that lifeline to the currency alongside positive fundamental news as PM Morrison aims to reopen the economy faster even if negative divergence exist against the USD.

It’s worth noting that while this Monday sees the economic calendar completely vacant, things will turn out much more interesting as major central banks are back with monetary policy decisions by the BoJ (today), Fed (mid-US Wednesday) and ECB (Thursday). It’s been reported that in the case of the BOJ, expectations are for the CB to least double its corporate bond purchasing programme, triple its Commercial Paper buying target and a new loan programme for companies.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

This analysis complements one’s view by accounting for multi timeframe biases. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter a position. This analysis is mainly intended as a way to educate traders in upping their analytical skills.

If you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

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Find my latest market thoughts

The Aussie Flies Assisted By Stocks


The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets



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.

As equities crusade northbound, the current market physique appears to be one of ‘hope’ in light of the containment rollback, allowing the S&P 500 to print 1.5% gains on Monday. To put things into perspective, the index has recouped nearly 30% from its March lows.

Any of the negative news out there, which is still plentiful, is being dismissed. From the disparity between stocks valuation vs the real economy, dismal earning projections, a global depression event, millions of jobs lost in the US alone, and the list goes on. Nothing of that has caught up with equities just yet, with the narrative fixated on the loosening of lock-down restrictions across the globe.

Just be aware that once we went past the 50% retracement from peak to trough in the stocks’ conglomerate that the S&P 500 consists of, this is definitely a time to really be on high alert. Why? Because this correctional extension tells us a fair amount of re-balancing in flows may have occurred to gear up for the next leg down.

However, technicals in the S&P 500 are not hinting we are ready to roll-over as it presses against its range resistance at the 2,900.00. As I mentioned in yesterday’s note, this could easily be a rally that if it keeps on going will induce hate, perplexity, you name it, as the disconnect is real. Even some big dogs (Blackrock) have gone as far as to speculate that if the Fed measures cause this inflated valuation bubble to extend, ‘the era of value investment’ is well and truly over.

Even the ongoing collapse in Oil, with WTI down more than 20% and Brent faring much better with a decline of just 7%, did not act as catalyst to cap the upside in the equity market. The announcement of the benchmark US Oil ETF accumulating the most contracts that it will begin to roll its exposure to the June contract was the sell trigger.

Shifting gears to Forex, the Australian Dollar has been thriving. The extend of the gains has been such that makes me think a fundamental catalyst is also playing a key role here as explained below. Technically, be aware that the currency has hit its 100% measured movement against the US Dollar, an area susceptible to see a reversal of flows.

The run in the AUD coincides with some states in Australia (WA, QLD) easing lock-down restrictions. As MNI reports, cited via NAB, “the RBA is increasingly confident that the domestic economy will recover more quickly than initially expected from the coronavirus-driven downturn” and that “Australia’s relative epidemiological successes allowing an earlier return to normal economic activity.”

The main losers of the last 24h include the US Dollar and the Swiss Franc, and to a lesser degree the Japanese Yen. These dynamics are in congruence with the groovy vibes seen in equities. It’s worth noting, as I walk you through in today’s video analysis, that the outlook for the US Dollar has deteriorated as a result of Monday’s ebbs and flows, especially against the commodity-linked currencies, but also on the backfoot near term (4h chart as reference) vs the EUR and GBP.

In the last 24h, it’s worth noting that the Bank of Japan (BoJ) policy decision barely budged the Japanese currency as the Central Bank announced, as previously speculated, that it would make government bond purchases ‘unlimited’ (a mere symbolic action) while it more than doubled its limit on corporate debt purchases. It was also interesting that the BOJ stood away from cutting rates further into negative. It also decided not to increase its equity purchases via ETFs.

But the BoJ just got us rolling and the real focus comes mid this week as the Fed and the ECB re-assess its policy settings. Talk has it that the ECB may be looking to ramp up its QE programme, with the latest we learnt being that the Central Bank has accepted sub-investment bonds as collateral in its operations for the foreseeable future. As per the Fed, it’s unlikely it will make further moves on rates this week, but there are some other things it could do as summarized via CNBC.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

This analysis complements one’s view by accounting for multi timeframe biases. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter a position. This analysis is mainly intended as a way to educate traders in upping their analytical skills.

If you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

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Find my latest market thoughts

Lower USD Near Term? Charts Tell Us So…

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets



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 lay of the land in the Forex terrain is not looking encouraging for the USD outlook in my book. Amid overall buoyancy in equity valuations as the world rolls back containment measures, the backdrop for the world’s reserve currency looks negative near term.

Besides, the earnings season in the US has so far not had a major influence in stocks volatility. While the S&P 500 has given back Tuesday’s gains, it remains overall positive. Google came out with solid earnings per share (Netflix last week), even if Apple, Amazon and Facebook are still are still part of the ‘FAANG’ conglomerate to go.

By checking the chart above, do you notice the divergence in performance between the Australian Dollar and the rest of currencies? That’s how much momentum there is behind the currency, which has gone from the most punish during the COVID-19 distress times to the most loved as the risk sentiment keeps flourishing up.

In today’s video analysis, I make a case, based on symmetrical targets, that 0.6640 is the next AUD/USD target. Along the same lines, if the EUR/USD and GBP/USD has turned you more cautious, that’s fine, but be reminded that I still perceive significant value to be a buyer on weakness amid intermarket divergences in the USD prop index.

The picture for the USD doesn’t get any better as I shift the focus to the USD/JPY or USD/CAD. Here, resolution of old ranges have finally eventuated, which sets a target of 106.00 in the former, while the Loonie has already met its 100% projection target.

In the next 24h, the FOMC takes center-stage with its latest policy decision, which is highly unlikely to alter the currency groovy psyche of the market. They have pretty much gone all in and there is little else they could do at this point in my opinion.

There is talk that they’d look to clarify the QE guidance but overall, the time from the emergency measures taken during the COVID-19 crisis and now do not seem to warrant even further drastic measures, especially as the equity market has been firming up. Fed Chairman Powell pres conference is where the main focus will reside.

Note, we learnt that Fitch downgraded Italy to BBB-, which led to BTP/Bund spread dipping from 250 to 220. However, with the ECB buying everything, the movement in the Italian yields was far from dramatic and not a major driver in the Euro.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

This analysis complements one’s view by accounting for multi timeframe biases. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter a position. This analysis is mainly intended as a way to educate traders in upping their analytical skills.

If you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

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Messages
25
Find my latest market thoughts

Up Go Stocks & Down Goes The US Dollar

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets



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.

Bulls kept pushing equities higher with flying colors towards levels that even if hard to justify, are nonetheless the default technical view whispered by price action all along. The S&P 500 broke into new trend highs and it looks like 3,000.00 is around the corner.

The buying frenzy in US equities can be attributed to news about the positive trial results of Gilead’s Remdesivir to treat COVID-19 patients. The FDA said it is in talks with Gilead, the maker of remdesivir, about making the drug available to patients. If this eventuates, it reinforces the notion of an acceleration in the containment rollbacks in the US.

The New York Times goes as far as to report that the US Food and Drug Administration plans to announce an emergency-use authorization for remdesivir as soon as this Wednesday, citing a senior administration official. Be aware though, this is not to be confused with a vaccine, but it nonetheless can help the rollback strategies.

Besides, on top of the strong gains reported by Alphabet on Tuesday as revenue exceeded expectations with “user returning to more commercial behaviour”, Wednesday was the time for Facebook and Microsoft to report earnings, both showing strong numbers (Facebook shared rose 7%, Microsoft +1.5% in post market close trading).

Before tackling the outlook in Forex majors, let me recap the latest decision by the Fed as part of its update on monetary policies. There were no fireworks with the target range kept at 0-0.25% and Powell emphasizing that “we are not changing that guidance today”, further implying that it won’t happen until full employment returns.

As I shift gears to the currency market, now that we have a better grasp of the positive backdrop in equities, we can understand why weakness in the US Dollar continues to be feeding through. As noted in yesterday’s video, the Euro and Pound were advertised at discounted levels and those looking to engage at the lows got rewarded.

Even if not at discounted prices, the picture in other currencies that had my attention yesterday (AUD, JPY, CAD…) was pretty poor for the interest of the USD. Fast forward 24h, and we’ve seen without exception the latter lower as technicals dominate.

So, as a form of a quick recap before one jumps into today’s video, where do we stand today in the Forex majors? Well, as I put it, “the relatively easier gains in the EUR/USD have already been made” as we are faced with a sticky level of resistance overhead.

The same picture is playing out in the GBP/USD domain, where we seem to be quickly transition from one period of consolidation into another before we know it.

Note, in the European afternoon, the ECB meeting will take place. Consensus is for no major announcement, and at best, some economists are anticipating minor tweaks to the QE program. For a more in-depth preview on what one could expect, Carsten Brzeski, Chief Economist at ING and someone I find quite sharp and enjoy following, has provided his comprehensive thoughts to the masses.

In the high-beat currencies, especially in the AUD and NZD, the outlook to keep capitalizing in this run of USD weakness looks promising and far from over as the technicals tell us. In the Aussie in particular, I am looking at a target of 0.6640/50.

The USD/JPY is in an active sell-side campaign en-route to 106.00 in my book, while USD/CAD is the one that looks excessively cheap with a bounce to release some of these extreme readings something I’d like to see first.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER

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.

SUPPORT & RESISTANCE

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.

FUNDAMENTALS

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.

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
 

IvanGlobalPrime

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Messages
25
Find my latest market thoughts

FX Vol Soars On Month-End Re-Balancing Flows

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets


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.

Trading the currency market is getting involved in a complex web of intertwined factors that to a lesser or greater degree will determine valuations in a particular currency pair at any point in time. However, as we approach month-end, a special element is at play…

I am referring to month-end re-balancing flows, which is what we saw on Thursday’s 4pm London fix. The result tends to be punchy moves that don’t necessarily have neither a technical nor fundamental logic but rather is all about tweaks in currency risk exposure.

The Euro and the Pound were the major beneficiaries of this phenomenon, which happens by month end as global portfolio managers have the need to readjust their benchmarks for currency hedge ratios amid value variations during the month.

Typically, these FX rebalancing flows are seen at the end of the month and usually their impact is felt most near the 4pm London fix on the last trading day of the month.

But before getting into the technicals in the currency market, where I see the USD still vulnerable, let’s concentrate our attention to equities. Here, stocks in the US ended lower but by assessing the monthly performance (+12.5%), it was the best in 33 years.

Besides, as I conclude as part of today’s video analysis, it is not the time to be a hero and play short equities just yet, unless, of course, that you want to be a hero and defy the bullish market structure off the daily. Much of this opinion though will vary on what timeframe you trade, so here I am giving you my judgement based on 4h and daily flows.

So, with the overall risk sentiment still buoyant, we need to ask ourselves, where does this leave us in Forex? As a starter, let me tell you that while the EUR/USD may look bullish in the 4h, we are getting quite expensive technically as a daily range top is hit. The bull run way past 1.09 saw, unsurprisingly, the 100% proj as the ceiling.

I will open up brackets to briefly touch on the ECB decision, which as in the case of the FOMC, failed to act as a major volatility catalyst in light of all the emergency measures as of late. The ECB made no change to its bond buying programme, which stands around the €1000b mark until the end of the year, even if ECB President Lagarde hinted at the possibility of expanding and shifting its composition when and if necessary.

What to say of the GBP/USD? First, that a couple of days ago it offered an attractive discounting price at a key 4h support circa 1.24 as I explained since 2 days ago and reiterated in today’s video, which set up the stage for what has become a formidable rally beyond 1.26. Profit-taking at the 100% proj target (1.2633) followed.

The Aussie, which is another currency that has my daily attention, succumbed to the influence of FX re-balancing flows, but it doesn’t mean the constructive outlook has changed. I see no reason to believe the tide is turning in favor of the bulls. In fact, my assessment of the daily gives me a scenario where an ultimate target of 0.6640/50 is hit.

The USD/JPY has negated my bearish target of 106.00. I must underscore that while it looked prime to keep drifting lower yesterday, the range found on Thursday was a red flag. Eventually, a resolution back above the 106.90/107.00 range top has fully invalidated the 4h chart-inspired 106.00 target even if the daily remains firmly bearish.

In today’s video, I also take a look at Gold. I emphasize the long trap that eventually led to a break of structure in the 4h chart. For those Gold traders out there, this market has now gone into range-bound conditions in the daily, bearish in the 4h chart, although the macro background, for the comfort of perma bulls, still looks very bright.

Note, another focal point where I see tail risks is the confrontational attitude of Trump against China and Saudi Arabia. If further diplomatic fractures occur between the US and China, this could spark a new wave of selling pressure in both stocks and the Aussie, although at this point, this is just mere speculation not reflected via price action.

First, the Washington Post reports that U.S. officials are crafting retaliatory actions against China over coronavirus. The report notes that “Trump has told aides and others that China has to pay for the outbreak and publicly floated demanding billions in compensation.” We also learned more details of Trump’s threat to Saudis; unless they keep cutting oil supply, they are risking to lose the U.S. military support in the region.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

Private
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Resurgence In USD Demand As Stocks Sold


The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets


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.

“Sell in May and go away” to apply this year? It’s anyone’s guess, but what’s clear is that the new month is not off to the best start as sell-side action in equities dominates.

We have the S&P 500 looking like its en-route to retest that critical level of support just ahead of the 2,700.00. This directional push carries momentum behind as depicted by the 4-hour chart, but be reminded that such behavior still remains in contradiction with the fairly constructive technicals we’ve seen as of late in the daily chart.

While it’s not my focal point to get into why each and every move occurs (it can take you down a rabbit hole), most of the consensus appears to be looking at two potential drivers.

First, as underscored for over a week, US-China geopolitics are flaring up with Trump threatening $1tn tariffs as a penalty to be paid by the Big Panda in COVID-19 retribution.

Another narrative picking up is that where the 90-year old legendary investor Warren Buffet, at the 2020 Berkshire Hathaway Annual Shareholders Meeting Streamed by Yahoo Finance caught many off guard by announcing the selling of its Airlines stakes.

Buffet said: “I think there are certain industries, and unfortunately, I think that the airline industry, among others, that are really hurt by a forced shutdown by events that are far beyond our control. The airline business — and I may be wrong and I hope I’m wrong — but I think it’s changed in a very major way. The future is much less clear to me.”

Elon Musk’s comments on Friday, tweeting he thought the stock of TESLA was overly rich, didn’t help. The end result was a fall of more than 10% (about $14bn taken off its market cap). That was certainly an expensive tweet to put out there, that’s for sure.

So, with the selling action seen in stocks, and just coming off the heels of a lively month-end balancing flows period, where does this leave us in Forex? For a starter, in today’s video I point out a rather attractive sell-side level playing out in EUR/USD as an evident USD prop index divergence converged at a 100% measured move.

With the EUR/USD rolling over in what I see as a broad daily range still playing out (happy to be proven wrong), selling strength this high is not a bad proposition from a daily technical + intermarket standpoint, even if the 4h chart is dangerously bullish.

Shifting gears to the GBP/USD, the lack of drivers in the Pound amid the absence of idiosyncratic Brexit-charged headlines has led the pair to behave as a function of the aggregated USD flows as I detail in today’s video analysis. The 4-chart remains bullish, but the acceleration back down and a daily range warrants prudence.

In the AUD/USD, one needs to follow the USD and the S&P 500 to gauge the next directional movement in this market. The correlation coefficients are running extremely high, so the ultimate indicator to get intraday value-oriented edges to define a bias is the combination of one’s technical techniques and the dynamics at play in USD/stocks.

In today’s video, I also spend time to make sense of the technical we are seeing in the USD/JPY, which intermarket-wise, makes it a tough call keep calling lower levels amid the resurgence of USD demand. However, the daily timeframes paints a different picture where the sell on strength bias is one still justified, unlike the 4h, which consolidates.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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






 

IvanGlobalPrime

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Find my latest market thoughts

Balanced Flows In The US Dollar

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets


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.

While airline stocks took a big hit in the US on the back of the revelations that Warren Buffet’s had dumped all his stakes, that decision has not translated in follow through sell-side pressure in the S&P 500. The close, slightly positive, feels like a victory for the bulls, considering the mounting selling pressure from early in Asia/Europe.

In Forex, with subdued activity in stocks, no fundamental catalysts to account for, and the typical slow vol from Monday, the end result has been rather quiet range-bound conditions settling in. Note, we remain in this unclear outlook where the 4h timeframes and the daily are failing to be in alignment with each other, so patient is needed.

A research note by Goldman Sachs Investment clearly shows the dramatic collapse in FX volatility expectations (implied vols) on a 3-month period. In the chart below, which spans 10y, we can clearly see that for vol seekers, commodities, credit and equities is still the place to be, while rates and forex have seen massive adjustments lower.

In the EUR/USD, following the fading of the daily range top, sell-side pressure has been building up steadily even if all this does is to simply unwind the bullish progress as of late, which as a reminder, was mainly a function of month-end re-balancing flows. These moves, at times aggressive, may create wobbles but barely cause a shift in the overall conditions, which let me reiterate, remain range-bound off the daily.

The GBP/USD market has finally validated a range in this same daily timeframe after the criteria that I am always on the lookout for was met (equal daily highs in different time sequences, retracement of the 50%, context of decreasing volatility by the flattening of the bollinger band). And again, what’s transpired in this market as we drill down in the 4h is an unwinding of the longs built through that month-end flows spike.

The AUD/USD must unravel its current contradictory technical stance, one characterized by sellers taking partial control off the 4h as the SMT (Smart Money Tracker) turned bearish, although with no structure shift to be backing up this downtrend. Besides, the daily retains a bullish outlook for an ultimate target of 0.6640 in my book. Sounds an aggressive one but daily structure and momentum still suggests so.

In the USD/JPY front, the daily remains with an active sell-side target of 106.00 after equilibrium was found below a double bottom. The latest month-end re-balancing flows (especially aggressive in JPY) all it did was to retest the backside of that support-turned-resistance before sellers re-took control, which is best seen through the daily action. On the 4h, we’ve gone into an expanded range that needs resolution.

There are a few critical moving pieces in the fundamental domain that I am keeping an eye on as potential volatility enhancer in both equities and currencies. Firstly, the sense that risk aversion may be returning anytime should the US-China diplomatic relationships may soon deteriorate as the Trump administration is now taking aim at China to make them pay for the mismanagement of the COVID-19 crisis. Notice, we also learned is that Trump is ‘turbocharging’ a plan to remove global supply chains from China.

Another critical piece of news with the potential to be affecting the Euro in this case is the ruling by the German constitutional court on the legality of the ECB’s QE programme (it’s been dragged for 5y). An outright rejection of the German Bundesbank’s contribution in the asset purchases would be a catastrophic outcome for the ECB, even if at this stage that is not the base case that markets are pricing in.

UniCredit economist Erik Nielsen was quoted by Reuters as saying: “If this were to happen it would surely bring the existence of the euro zone at risk, thereby sending this most fundamental of European issues back to the lawmakers to clarify. We would see unprecedented political, financial and economic turmoil – in the middle of the pandemic.”

We also have the RBA meeting today, although with most of the policy action by the Central Bank deployed, and with implied vols far from elevated, the market is telling that this event may come and go with little substance that would cause major moves.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

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Messages
25
Find my latest market thoughts

EUR Sold Post German Court Ruling on QE

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets

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 Euro was at the epicenter of the volatility hitting the currency market in the last 24h as German judges, in a process that has been dragging on for over 5 years, challenged the ECB on its QE activity, giving now three months to justify bond buying program.

In today’s shorter version of the Daily Edge, I will solely focus on what this sell-side activity in the Euro has translated into, in terms of identifying potential levels of selling engagement in the currency. I also touch on other markets that had my attention such as US Dollar buying against the Yen or the recent buy-side case in the Aussie.

I must say, despite a rather negative start of the week, equities have been faring well, which has undoubtedly assisted the appeal towards building up longs in the AUD, NZD or CAD. The risk sentiment, which continues to be attributed to the containment rollback, led to the S&P500 eke out a tiny gain of +0.9% after a 2% rise in early trading.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

Private
Messages
25
Find my latest market thoughts

Yen Outperforms All Its Peers

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…


Scan Of The Markets


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 Japanese Yen has been the star performer in a move that surprisingly didn’t get fueled by that much weakness in the S&P 500 (-0.7%). Even the US long-dated Treasury yields soared, which tends to be associated with Yen weakness rather than strength.

These dynamics where the Yen decouples from its usual drivers makes tapping into the aggregated flows in G8 FX so powerful. It keeps traders in constant tune with what’s going on. The FX index chart clearly shows how JPY has taken off and not looking back.

In the fundamental domain, even if it has the potential to be a source of distress, so far investors are undeterred about the growing tensions between the US and China over the origin of the coronavirus. US Secretary of State Pompeo said there is “significant evidence” the virus was engineered via a Wuhan laboratory.

Steps to curb supply chains and investment flows in China by the US made it to the front page of the Financial Times. This would be another critical stabilizing factor that may see risk deteriorate, even if at this point, equity tradrs are sweeping it under the carpet.

In the containment rollbacks, Germany announced plans to further reopen its economies even if social distancing will remain in place. Meanwhile, in the UK, the market awaits the plan to ease lockdowns by PM Johnson to be outlined this coming Sunday.

In the US, it looks as though the trend has been for the virus to travel from East to West, with California badly hit with a spike in new cases. President Trump’s rhetoric to encourage people going back to business as usual and reopening the economy has gone up a notch, saying Americans should begin returning to their everyday lives.

Back to forex, one of the currencies most fragile in the last 24h, includes the GBP, battered for seemingly no particular catalyst. It may be because attention is now placed on today’s BOE policy meeting where the risk of a QE expansion near term is real.

The US Dollar, after the balanced flows thematic from earlier this week, finally found a technical resolution by breaking higher. This strength sends the EUR/USD into a critical daily support or puts AUD/USD in a complicated position to retain the daily bullishness.

In today’s video, where I dive into the daily assessment of the currency flows, I conclude that where the EUR/USD stands makes short trades especially tricky. The GBP/USD appears to have further downside room as dos the USD/JPY. Think what that means for the GBP/JPY near term…. Lastly, the AUD/USD, a market I tend to focus on, is rolling over dangerously but the SMT is not quite there.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 

IvanGlobalPrime

Private
Messages
25
Find my latest market thoughts

Risk On The Mend, US Dollar Suffers

The Daily Edge is authored by Ivan Delgado, 10y Forex Trader veteran & Market Insights Commentator at Global Prime. Feel free to follow Ivan on Twitter & Youtube weekly show. You can also subscribe to the mailing list to receive Ivan’s Daily wrap. The purpose of this content is to provide an assessment of the conditions, taking an in-depth look of market dynamics – fundamentals and technicals – determine daily biases and assist one’s trading decisions.

Let’s get started…
Scan Of The Markets


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.

Before getting into today’s technical stance in the most traded instruments, a note of caution to traders. We have a rather toxic combination by having UK markets closed in observance of May Day coupled with the release of the US NFP figures.

A special mention deserves the US job figures today, set to print by far the worst numbers in history with estimates ranging from -8 million all the way to -22 million with a jobless rate of about 16%.

What I’d like to emphasize by pointing at these two aspects today is that the absence of London may see currency flows subdued, while the US jobs report could create more erratic than usual price fluctuations.

By the way, a point to reinforce. You’ll hear talking heads looking to justify every daily move due to this or that. Suggestion? Unless clearly defined by matching time and space traveled, I urge you to simply treat fundamental narratives as contextual information to be aware of but not to make decisions out of it…

Why? It’s really hard to make consistent decisions based on fundamental information as it becomes very subjective whereas structure, momentum or other technically-derived measures is much more fitting in its objectivity. Remember, fundamentals tells us the ‘why’ we get from A to B and ‘technicals’ the how we get there.

Some may argue the equities remain positive as the market remains optimistic about the fast-tracking of the containment rollovers both globally and in the US, others will tell you the resumption of US-China trade talks may be a positive catalyst. But by the same token, tensions between these two countries over the origin of the virus is negative.

Hence, shifting gears to the technicals/intermarket analysis, in today’s video, I argue that at last, there is again communion between the 4h and the daily to the bullish side in the S&P 500. Besides, with the VIX retesting its prior trend low, this is looking like a market ready to attack the prior high around the 2,960.00 ahead of the 3,000.00 mark.

In the EUR/USD, we’ve seen an abrupt rejection off the lows, which as reminder, was always a clear risk to be accounted for as we were retesting the low-end of a daily range. At this point, however, with the 4h not yet flashing buys via the SMT and the EUR index (main weekly driver) still pressured lower, I can’t see immediate follow through.

A brief note on EUR fundamentals. Yesterday, ECB President Lagarde downplayed the recent ruling by the German Constitutional Court requesting a re-assessment of the QE program. Lagarde said the ECB was “undeterred” and that they remain “answerable to the European Parliament…”, adding that “we will continue to do whatever is needed, whatever is necessary, to deliver on that mandate.”

My view in the GBP/USD diverges little from that expressed via the EUR/USD, as the push in the pair comes as a function of the USD index weakening, which has not been the key driver this week. Therefore, with GBP index our main guidance (remains at trend lows) and key resistance overhead in GBP/USD I cannot see a meaningful buy-side case until the intermarket flows and technicals improve.

The Pound initially appreciated on the back of the BoE policy decision, which refrained from expanding QE on a 7-2 vote. The market is still expecting the BoE to beef up its QE programme in coming months. The Bank sees a collapse of Q2 GDP to the tune of 25% with Governor Bailey sounding rather upbeat, saying he projects economic activity to bounce back “much more rapidly than the pullback from the global financial crisis”.

The market where I see the USD most punished out of the G4 FX I focus in today’s video is against the Australian Dollar. Here we have a clear example of a realignment of bullish tendencies in both the 4h and the daily timeframe, at a time where the AUD index (key driver), is running away. This provided a great discount entry yesterday.

On the USD/JPY front, even if my base case supports further downside continuation, the JPY index (key driver this week), is yet to make a strong case to resume the downtrend in the pair. This does not deter me from supporting lower levels as the daily chart, which remains my main guidance, is clearly pointing lower with all the boxes ticked.

If you found this fundamental summary helpful, just click here to share it!

Insights Into Market Flows

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 you found the content valuable, give us a share by just clicking here! Besides, if you have a suggestion on extra instruments for me to cover, reach out to me via Twitter.


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 the tutorial How To Read Market Structures In Forex.

SMART MONEY TRACKER
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.

SUPPORT & RESISTANCE
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.

FUNDAMENTALS
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.

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
 
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