Global Prime: Daily Market Digest

Find my latest market thoughts

Risk Trades Have Come A Long Way

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.

There is no respite in the USD weakening trend, now a very mature one, as the currency still loses value across the board, resulting in new lows in the prop index I personally monitor that aggregates the flows.

This downside action in the US Dollar comes, once again, as a result of another positive day in the US equity space, where the S&P 500 recorded gains of 1.20%, landing right at a key resistance of 3,220.00, a level I suspect may prove challenging to break.

Even if I am not going to stick my neck out sounding like a hero at this stage and over-committing to any contrarian call, let me say this. The S&P 500 has now landed at what I believe to be the most critical resistance in over 2 weeks when 3,000.00 got tested.

This means that you should nonetheless be prepared and not surprised at all if around this 3,220.00 area in the S&P 500 we see a roll-over of equities that leads to a wave of strength in the USD. Again, pure speculation at this point as there are no technical anchors to support this scenario for now. Just something to be vigilant for.

The reality in the charts is that we remain in true ‘risk on’ mood and that’s reflected in how overstretched the rally in the Oceanic currencies look. Hence, why one cannot be dismissive of a transition into a period of distribution relatively soon. However, even if more two-way business was noted in commodity-linked FX, the close above 0.70 in the AUD/USD appeats to be another bullish testament of intent.

We have come a long way in a short time, but until there is objective technical data to back up contrarian views, and until evidence emerges that structures are compromised and momentum lost, the path of least resistance remains to join the bid in risk.

Anyway you slice it and any USD-denominated chart you look (exclude USD/JPY), it paints the same gloomy prospects. Being systematic in one’s approach should have paid off handsomely as of late, so there is no reason to switch that mentality for now.

The EUR/USD, after finding acceptance beyond 1.1250, is currently finding its footing above the 1.13, with a notable positive divergence to be exploited against a very weak USD. This has already translated in buy on dips opportunities on the retest of 1.1270-75.

As in the S&P 500, the GBP/USD faces a very similar resistance structure circa 1.2730-50, an area susceptible to act as a role reversal level even if there is no backing whatsoever by technicals at this point. The pair has been rising for 8 days straight.

A pair I see swiftly moving towards a buy-side area judging by intermarket analysis and how out of whack when crosschecked against its leading currency index is the USD/JPY. It is headed into sub 108.00 support displaying a huge positive divergence vs JPY index.

So, if the above scenario eventually plays out and EUR/USD finds the dip buyers I envision and USD/JPY also sees the bid tone improve, one can conclude that monitoring buy side opportunities in EUR/JPY could be an even better way to express longs?

If you are interested in a deeper analysis where I account for structures, momentum, volatility and intermarket, I’ve dissected and divulge my thoughts with all of you in the video below. The bottom line after going through the S&P 500, EU, GU, UJ, AU, is to stick with what’s worked and that means look for exposure in the established trends.

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
 
Find my latest market thoughts

The Risk Rally Stalls Ahead of The FOMC

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.

A setback in the risk tone proliferated across the currency space ahead of the FOMC policy decision this Wednesday, with a notable disconnect in terms of the percentage movements observed between the performance of equities and risk-on currencies.

The roll-over in the commodity-linked FX, especially the most sensitive to risk such as the AUD and NZD, came as part of a move disjointed from the relatively tepid fall in the S&P 500 (-0.8%). The rise in the CHF and JPY reinforced the notion of a dial back in risk.

The USD was the exception as even the mild sell-side pressure on equities away from a key resistance failed to re-invigorate it. The general theme of USD weakness did nonetheless slow down, but it still under-performed most of the FX excluding AUD, NZD.

The rallies in currencies the likes of the AUD and NZD are at a very mature stage now, so it is to a certain extend logical to expect a market unloading long exposure ahead of the Fed. The same can be said for equities as position squaring activity picked up.

These moves play into the view that prudence ahead of the FOMC is warranted. The Central Bank successfully executed a pump in stocks after flooding the economy with USD in order to create a circuit breaker to the disorderly moves. But with the S&P 500 having rallied 45% from its March low, the focus is quickly shifting to forward guidance that clarifies when/if some unwinding of the emergency measures introduced will be considered to avoid a further fracture between reality in the ground and valuations.

Having laid out the backdrop we find ourselves in, let’s now tackle the latest technicals and my main takeaways, while being aware that the FOMC will likely modify the picture.

  • The S&P 500 remains on a steady uptrend with full agreement in terms of structure and momentum across the daily and 4-hour. However, there are two important inputs that create a hinder in the buyers’ merry path, that is, the critical wall/resistance faced at 3,225.00, alongside a notable negative divergence with the VIX.
  • The Gold market is boxed in a well defined $70-$75 range, with buyers at the lower end and sellers at the upper extreme dominating proceedings. A breakout away from this contraction period could be seen on the aftermath of the Fed as vol will likely pick up, even if at this point, is just speculation.
  • EUR/USD has trapped weak-handed shorts before reversing the tide back up. I’d be expecting a potential retest of 1.13 as the inflection point where buyers are set to return for a retest of the trend highs from a few days ago. The trend is strong and healthy after the backside of the 100% proj target got tested and repelled.
Additional views on GBP/USD, USD/JPY, AUD/USD, alongside further elaboration in the markets above can be found in the video below. Remember, at the core of this analysis, I account for structures, momentum, volatility, intermarket and levels.

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
 
Find my latest market thoughts

FOMC Keeps Status Quo, USD Weakens

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.

On the back of the FOMC, and as the dust settles in financial markets, the Japanese Yen and the Swiss Franc continue to outperform for a third day in a row amid the lingering bearish outlook for the US Dollar as Powell sticks to the status quo in policies.

The FOMC outcome, despite the admission that it will maintain the same direction in terms of QE and rates for the foreseeable future, failed to inspire further buy-side momentum in the equity space. Coincidentally or not, this happens as the S&P 500 continues its struggles to take out the 3,225.00 resistance level.

Fed’s Chairman Powell admitted, with no much beating about the bush and with a rather succinct language that leaves little doubt, that the Fed will continue to be the force stabilizing markets and the buyer of first resort in the US. Powell reiterated the Fed’s commitment to ultra-loose monetary policies through 2020 and 2021 for now.

Powell said that inflation is expected to remain below 2 percent through to 2022 and that the humongous QE quantities committed will remain in place “at least at the current pace” for the time being. On the economy, Powell’s view was quite shady.

The meandering of the commodity-linked currencies complex at such elevated levels without making further strides can be understood through the effect of a deterioration in the equity valuation and the stage of maturity of a rally that has gone too far too soon?

The technical reality as I see it is characterized by a USD still struggling to get out of 2nd gear at depressed levels. Besides, the suite of factors I monitor (structure, momentum, levels) still show that further losses may be ahead, especially against the Euro.

Should risk-off accelerate, the JPY and CHF are set to maintain an advantageous stance against the USD after technicals turned decisively bearish. For the Aussie, Kiwi and the Loonie to regain the upper hand vs the USD, a re-invigoration of equities is a must.

It’s going to be an interesting 24h ahead as the market digests the FOMC decision and the real-money and leveraged type accounts re-formulate their outlook towards the USD. By looking at the behavior of gold, equities, the Swissy and the Yen, it really feels the USD should be way higher, but it isn’t, so I will be keen to watch this annomaly.

If you are looking to get much more surgical in the general views projected above, I invite you to watch today’s video analysis. This is your opportunity to stay in tune with my thinking process and learn a few new lessons or reinforce existing ones along the way.

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
 
Find my latest market thoughts

Risk-Off Conditions Re-Established

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 hectic action in US equities in a move that was already building up in Europe and Asia has led to a quick transition into an environment that is back to ‘risk off’ dominating proceedings. In hindsight, it definitely felt like the rubber hand was over stretched.

Looking back, not even the admission by the Fed during Wed FOMC that the era of ultra-loose monetary policy is here to stay for the short to mid term through 2020 and 2021 did the the trick in equities this time with well documented dumb money chasing the trend.

The euphoria built up in stocks, not coincidentally, has suddenly come to an abrupt end just as the S&P 500 hit a wall of resistance at the 3,225.00, a level that unless you’ve been living under a rock, I’ve emphasized as pivotal for over a week now.

We are also seeing the rhetoric towards the risks of a re-emergence of a COVID-19 wave in the US (you can’t really call it a second wave when the first never went away) gain more air time among news outlets.

There are a number of states in the US, the likes of Texas, Arizona, Florida, South Carolina, where there has been a marked increase in COVID-related hospitalizations that makes the market worried. Besides, remember that the #blacklivesmatter movement where protests have erupted across the country is not helping at all either.

As the team at NAB notes: “Yesterday’s new infection numbers brought the total number of US COVID19 cases to above two million, with a number of localised hotspots – 18 states are seeing an increase, including Arizona, Florida, Texas and parts of California. And globally, Wednesday’s new case load of 135,000 is the highest daily tally to date.”

Despite the gloomier prospects as a re-peak of COVID-19 may severely alter the return back to normalcy in the States, US Treasury Secretary has reiterated that no further shutdowns will be imposed. A second wave is ‘the’ overarching theme that can seriously undermine the equities outlook ever since the lows printed in March this year.

Anywhere you look in terms of weekly performances, it’s a sea of red, with the behavior in risk-sensitive assets a perfect template of a a market that has swiftly turned to ‘true risk-off’ conditions. When the Swissy, US Dollar, Yen, Gold, US bonds all go up, that’s a recipe for disaster to keep holding exposure in risk assets.

The jury is still out there as to whether the sharp falls we are seeing in equities (largest 1-day decline in the S&P 500 since early March) is just part of a ‘correction’ or something greater is cooking. I can tell you, in healthy trends, we don’t see such one-sided flows erasing 2 weeks worth of gains just like that.

There is definitely an active debate on what gives, the fundamentals on the ground or the floor under risk courtesy of the Fed. They’ve proven capable of being the ultimate circuit breaker by inundating the market with liquidity, but can this humongous disconnect last?

If you are interested in the dissection of my thinking process as it relates to the technical picture in both the equity space taking the S&P 500 as reference, Gold and currency majors, the video analysis below will facilitate a deeper understanding of my views.

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
 
Find my latest market thoughts

The Tide Is Turning In Favor Of Risk-Off

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.

Judging by the alarming sell-side action in the equity space last Thursday (worst daily loss for the S&P 500 in 12 weeks), and after a period of vol contraction lacking the snappy traits perma bulls would have wished for on Friday, there is real danger that the risk-adverse conditions may continue to be in command this week.

At the epicenter of the renewed fears that have swiftly led to a suppression of risk-on dynamics, we find a market worried about new containment measures in the US as COVID-19 related infections continue to spike at unnerving numbers.

As Reuters reports: “New COVID-19 cases and hospitalizations in record numbers swept through more U.S. states. Alabama reported a record number for the fourth day in a row on Sunday. Alaska, Arizona, Arkansas, California, Florida, North Carolina, Oklahoma and South Carolina all had record numbers of new cases and many state health officials partly attribute the increase to gatherings over the Memorial Day in late May.”

So far, the intent to appease concerns by US Economic Adviser Larry Kudlow, saying “the US won’t shut down again and it’s not seeing virus returning in second wave” has failed to do the trick. Sounding much more prudent, Dr. Fauci, the director of the National Institute of Allergy and Infectious Diseases, endorsed to act with caution and encouraged Trump to rethink their reopening strategies conditional to the trend in Covid-19 cases.

The Fed also released its semi-annual report to Congress on Friday in a reiteration of the remarks made by Fed’s Chairman Powell at the FOMC press conference last week. The report noted that “the outlook for the pandemic and economic activity is uncertain. In the near term, risks associated with the course of COVID-19 and its effects on the U.S. and global economies remain high. A wide variety of data reveal an alarming picture of small business health during the COVID-19 crisis.”

As I shift gears into the clues obtained via the technical analysis, my negative stance towards risk sentiment is backed by the recent breakouts of structures and loss of momentum in key markets (SP500, AUDUSD, EURAUD, AUDJPY, etc) through the 4-hour time scale. Remember, this is my personal sweet spot that allows me adjust the stance by acting on information promptly yet objectively without facing the unnecessary risk of missing the boat if reacting too slow off the daily time scale.

But not only the technical cracks in 4h structures and momentum constitute a red flag, but the intermarket flows are so far projecting that further follow through is very much in store. The VIX spike last week still casts a major shadow and acts as a source of concern as it does suggest that equity valuations are still out of whack based on where the market projects volatility to trade.

Besides, the market open in Asia, with the S&P 500 futures selling off through the 3,000.00 mark, does not bode well either. Remember, the swift change in narrative from the re-opening of the US economy driving optimism to now see doubts and concerns emerge over new partial shutdowns due to spikes in COVID-19 cases and hospitalizations is the catalyst that led to the change of heart.

If we take a look back to the last 5 trading days, we have the Yen and the Franc as the outperformers, commodity-linked currencies hammered, Gold pressing the upper end of its range, and US 30-year bond yields through its worst losing streak since March. This type of concerted movements across varies market instruments is a very concerning picture. One that the USD has so far not milked to the extend that it should have based on its risk-off attributes, which makes me think it has plenty of catch-up.

Lastly, if interested in my daily technicals views where I break down all the latest price actions to facilitate an understanding of the dominant flows to ultimately help us determine an underlying bias in the next 24h, the video I’ve prepared below intents to serve this purpose.

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
 
Find my latest market thoughts

Sudden Shift In Market Sentiment

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 market has gone through a very sharp reversal in risk sentiment over the last 24h as buyers returned in mass in the US equity space, leading to an outperformance of the Aussie in the currency market, while the Yen and the Swissy suffered the most.

Concerns of a re-peak of COVID-19 cases in the US, alongside risks of an outbreak in Beijing were brushed under the rug. What started as a creepy selling day in Asia turned into a meritorious 5% recovery from bottom to top of the range in the S&P 500.

What acted as the main catalyst leading to an acceleration in gains across risk assets more broadly included the fleshing out of all the pending details by the Fed as part of its program of buying individual Corporate bonds, which is now going to ramp up.

The programmed itself is old news as it was first announced in March at the peak of the equity mayhem. This Secondary Market Corporate Credit Facility (SMCCF), which has a purchasing capacity of $250bn, aims to buy the so called ‘Fallen Angels’, which comprises Investment Grade (IG) credits not below 2 notches under BBB.

RBA Minutes this afternoon shouldn’t contain any surprises, policy having been left unchanged but the RBA acknowledging a somewhat less bleak view of the economy relative to earlier prognostication as social distancing restrictions lifted a little earlier than the government has previously led us all to expect.

Going forward, the critical risk events for this Tuesday include the BoJ monetary policy meeting, even if expectations for any significant changes are very low. The only slight adjustments may include a revision of the amount committed as part of the funding facility, announced back in May to stem the loss of business activity.

The RBA Minutes in the Australian afternoon is also one event to keep a close eye even if no surprises are eyed at this stage. The RBA has admitted that rates will now be left unchanged for a considerable amount of time, with the recent rhetoric seeing a slight shift in views to a more constructive economic recovery relative to the worst projections as part of the scenario templates considered.

In terms of key data releases, we get the UK employment report for May, the German ZEW survey (jump in expectations towards the 60.00 mark eyed) and in the US we await the release of the May Retail Sales and Industrial Production.

Technically speaking, the currency best positioned to keep capitalizing on the smart reversal in sentiment is the Australian Dollar, vindicating this strength through a bullish breakout in structure at an index level. The currencies associate with risk-off flows (JPY, CHF, USD) are all trading on the backfoot and more losses may lie ahead. The video I’ve produced below looks to deconstruct the latest ebbs and flows.

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
 
Find my latest market thoughts

Stocks One Way, Forex The Other

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 the dust settles and I take a technical snapshot of the latest market flows to re-formulate directional biases, there were a number of market moving headlines that certainly played an important role in sentiment.

These fundamental drivers included:

  • The somber outlook by Federal Reserve Chairman Jerome Powell on a testimony to the Senate, warning that the U.S. economy faces a severe downturn with “significant uncertainty” over both the timing and fortitude of a recovery. He stressed that the longer this goes on for, the worse for employment and businesses.
  • Powell also highlighted that the Fed didn’t necessarily have to buy the full allotment in the corporate bond program, noting that “if market function continues to improve, we will taper corporate bond program”. This was definitely a headline that led to an immediate suppression of the mood in markets.
  • The headlines of a spike in COVID-19 cases in Texax, Arizona and Florida also shook off weak-hand buyers in risk trades. In Texas, hospitalizations reached 2,518 confirmed patients, a new record. In Florida, COVID-19 cases jumped +3.6%, while in Arizona, it got even worse with a surge in cases by 6.5%, more than doubling.
  • As a double whammy not helping sentiment, especially in the currency space, and more specifically the AUD, we learned that Beijing raised the COVID-19 response to level 2 as fears of an outbreak mount. Beijing officials advised people not to leave the city unless necessary. While companies won’t stop working, authorities are encouraging work from home. What’s worrying is that Beijing shut all schools again.
  • On the bright side, the overall positive sentiment in US equities found an important anchor point via a surprise bounce in US retail sales numbers (+17.7%, highest ever on a MoM basis), coupled with chatter that a $1 trillion infrastructure program from the Trump administration is in the works.
  • I wouldn’t add too much weight on the following, but there have been plenty of headlines coverage as the news was intended to be sensationalized although in reality is just a minor advancement. I am talking about about an effective treatment found for severe COVID-19 cases called Dexamethasone, which has been proven to cut mortality from those in a ventilator by 1/3rd.
  • In the geopolitical space, the India-China border clashes are testing investors’ nerves with CNN reporting that twenty Indian soldiers died after clashes with China along a disputed border. Besides, news that North Korea blew up an intra-Korean liaison office used for talks with South Korea is a worrying development too.
After all said and done, we still end with the validation of a fresh bullish phase in the S&P 500 through the 4h time scale, but interestingly, this must be reconciled with the 3 risk-off associated currencies (JPY, CHF, USD) higher for the day.

On the other side of the spectrum, the AUD, the EUR and the GBP were the underperformers, in what I reiterate to have been a day with rather strange dynamics in the forex space. In this new COVID-19 era, it represents a huge annomaly to see equities going one way (higher) yet a pair s risk sensitive like AUD/USD losing ground.

Let’s now dive deep into the technical merits of the movements seen during Tuesday. In order to dissect it all with proper details and make it as actionable and relevant to readers as possible, I’d like to ask you to watch the video posted below as it allows me to better articulate my messages and go much deeper into the factors that count.

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
 
Find my latest market thoughts

The Yen Keeps Gaining Strength

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 moves in FX were modest with fluctuations in confined ranges the norm. However, as we move into Asian trading on Thursday, risk-off associated currencies (JPY, CHF) are having another go higher as the market still acts prudent amid the resurgence of COVID-19 cases in the US and fears of a clean sweep by Democrats in the Nov election.

The surge in new COVID-19 cases in the state of Texas, with hospitalisation rates up by 11% over past 24 hours and exploding to over 85% since memorial day suppressed the mood in stocks. That said, Vice-President Pence keeps de-emphasizing the situation. In a WSJ Opinion piece Pence said “there isn’t a COVID ‘Second Wave’, and with testing, treatments and vaccine trials ramping up, we are far better off than the media reports.”

The next key driver for the day, especially in the valuations of equities came in the form of the revelations by John Bolton (Trump’s former National Security Adviser), causing a late day fall in stocks. Bolton published a series of bombshells via excerpts of his upcoming book, noting “The president pleaded with Chinese leader Xi Jinping for domestic political help, subordinated national-security issues to his own re-election prospects and ignored Beijing’s human-rights abuses”.

The allegations made above by Bolton led to an immediate decline in the chances of a Trump re-election, with the website PredictIT projecting now a Democratic clean sweep (Presidency, House, Senate) with the chances ramping up to 54%. A defeat by Trump in the next Nov election should send shock-waves into risk assets while it is also thought to be a negative input for the likes of the US Dollar.

We also saw Fed Chair Powell complete his twice a year testimony on Capitol Hill. Today was the turn to answer questions from the House Financial Services committee and I must say, it all went pretty smoothly with no unexpected comments. Powell kept the narrative of support for the economy via more stimulus intact and remained very cautious about the sustainability of the recovery due to the dicey pandemic situation the US is facing with a somber outlook for jobs near term.

Going forward, the currency space should be given a fair dose of volatility that hopefully can get us out of first gear. The day started with the disappointing NZ Q2 GDP at -1.6% vs -1%, followed by the Aussie employment report, which came at -227.7k vs -78.8k, a downbeat reports that added further pressure to the Aussie.

Later in Europe, it will be the turn for the GBP to be given a jolt as the BoE meets to re-formulate its monetary policy settings. Expectations are for the BoE to keep its cash rate on hold at 0.1% accompanied by a ramp up in its QE bond buying commitment. The BoE is en-route to reach its bond buying threshold by early July, hence why economists are calling for an increase in the size of its QE programme by 100b pounds at the bare minimum, which would then total 745b pounds.

In the US, the Jobless Claims will be monitored closely. At the same time, the market will watch the Philly Fed for some minor uptick. Do remember though, the key drivers that should keep ruling sentiment include the daily changes in COVID-19 cases/hospitalizations in the US, the lingering concerns over the prospects of a Trump re-election, as well as the fluid situation in Beijing following a COVID outbreak.

Until here the key points pertaining to the fundamental landscape so that readers can better grasp what the market is watching. The next phase is to touch on the technical outlook in a range of currency pairs as well as the state of affairs in the S&P 500 as a risk barometer. Please, refer to the video posted below where I share my take in detail.

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
 
Find my latest market thoughts

Disconnect Between FX & Stocks Prevails

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 Pound was the main mover as one could have anticipated given the BoE monetary policy meeting, while the Yen and the US Dollar, both outperformed the rest of the FX pack. The disconnect between FX vs Stocks continues to be a notable feature at present.

The sharp fall in GBP came in response to the expansion of the BoE QE program by £ 100bn while keeping rates unchanged. Even if BoE’s Gov Bailey said he didn’t discuss negative rates or yield curve control, the one-sided sell flows in GBP were notable.

The broad tone in the Forex market was once again significantly more negative than in the equity space where the S&P 500 found dip buyers through the US session off the 3,070-75.00 support area to end the day barely changed in % terms.

The ‘narratives’ pendulum the market has paid most attention to as of late swung back and forth between the re-openings of developed economies with the US at the epicenter but also the recognition that the surge in COVID-19 cases warrants prudence.

Thrown into the mix, which explains the disconnect between a jittery Forex market and the stubborn equity space, is the endless stream of liquidity the Fed is pumping into the market as a buyer of corp bonds, ETFs, credit, MBS.

This causes the breaking of the normal channels of price discovery transmission and distorting what once was the essence of capitalism where prices would be determined not by the mass of new liquidity digitally printed but by market forces.

Heading into Friday, be aware, it’s quadruple witching day, so be on high alert as we tend to see more volatility (can be up to 100% above normal) and volumes the 3rd Friday of every end of quarter, so in March, June, September, and December.

Investors are essentially forced, due to expiration, to close out option contracts that are profitable. Why quadruple? Because in a simultaneous fashion we get the expiration of single-stock options, single-stock futures, stock-index options and stock-futures.

The following 5 trading days, in a sample of the last 30 years, in up to 80% of the cases, key US indices (SP, Nasdaq, Dow) tend to see declines, so with FX mood already jittery, doesnt bode well. Another key take away, don’t assign too much of a fundamental reason to the pick in vol in these days as there are structurally-led moves affecting the trading.

The Euro is also a candidate to be injected a fair share of volatility on the EU Summit to discuss the proposed Rescue and Recovery Fund (RRF). Watch the headlines as it’s highly likely to have an impact towards the EUR sentiment.

According to an MNI report, cited by the team at NAB, “EU President Charles Michel pitched the summit on the RRF as an orientation debate, ruling out any agreement this week. “There will be no decisions, no real debate even, but the idea is that it will be a stepping stone to a future debate” Michel said.

Technically speaking, as a round up of the reads I am getting, we have the S&P 500 as a barometer of risk carving out a base through the 3,070.00 prior resistance-turned-support. This price action in equities, nonetheless, is not yet allowing the resurgence of commodity-linked currencies the likes of the Aussie, Kiwi and Canadian Dollar.

Either it is looking back to the last 24h or to the broader weekly performance stats, the fact that the Yen remains by far the top performer is a reason to be worried.

Besides, if this development is followed by the Swissy and the US Dollar staying bid this week, alongside steady flows into Gold, it creates a tricky setting whereby financial instruments outside equities hint at ‘risk off’ sentiment.

For a better understanding of my take in the Forex market, watch the video I’ve prepared below. Today, I take a new approach covering up to 16 different pairs in just over 20m, scooping out and making sense of both the technicals as well as intermarket flows.

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
 
Find my latest market thoughts

Risk-Off Currencies Keep Outperforming

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.

What started as a promising day for US stocks last Friday ended up with a reversal in the buy-side flows that sent the S&P 500 back below a critical support area at 3,070.00. More work needs to be done but tentative signs of a new bearish phase are emanating.

The constant rise in COVID-19 hot spots across the US (Arizona, Texas, Florida to name a few), alongside news that Apple is taking action by closing stores in some of these most adversely affected areas by COVID-19 did certainly not sit well with Mr. Market.

I’ve been warning for a number of weeks now that the out-performance of the Japanese Yen, the Swissy and to a lesser extend the US Dollar was always going to be a major red flag. One that the seemingly broken ‘price discovery’ mechanism in US equities courtesy of the Fed’s liquidity inundation into the system failed to manifest but…

Fortunately for our own sanity, and as the rubber band got overstretched with such a disconnect between currencies and stocks, the market is technically wise, once again re-aligning the recently disjointed moves. The fall back by the S&P 500 into a tentative bearish phase in the 4h chart now resonates more logically with the underlying trends in risk-off sensitive currencies in the same timeframe.

Another piece of the puzzle that shows a new level of anxiety by Mr. Market is the renewed conviction to add into Gold long exposure as the shinny metal looks to be finally breaking above a sticky resistance level circa the $1,740.00. A break and hold above the $1,750.00 on a closing basis could set us up for a much stronger run to the upside. It would also be the first time in a month that we get full agreement in structure and momentum measures (Fractals+SMT) in over a month.

Amid this context, the currencies most punished by the new wave of deleveraging include the Aussie, the Kiwi and the Pound, the latter being driven by its own set of idiosyncratic elements on the back of last week’s QE expansion by the BoE and Brexit talks at risk of derailing. The Euro and the Canadian Dollar, meanwhile, managed to avoid being in the eye of the selling storm for now with more stable flows.

The Euro was a contender to see a spike in vol last Friday, but the rather uneventful EU virtual Summit to discuss the EC’s EUR750bn Rescue and Recovery Fund, did not justify major moves. The European Council President Michel announced the next summit in mid-July, saying “it is essential to take a decision as soon as possible.”

Expectations would, therefore, be building up for a deal to be finalized sometime in August, with most of the friction points orbiting around the size of the package, the distribution of funds and the grants/loans split. German chancellor Merkel said the road ahead was tricky, once again emphasizing that important compromises were needed.

Shifting gears now to the technical outlook. Since my intention is to properly re-evaluate and articulate the context in a large range of instruments, mainly in the currency space, the video analysis format posted below is best suited to serve this aim. By the end of it, the bottom line for clients and my main takeaway is that the environment is turning quite sour for the interest of risk-seekers.

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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