Risk Sentiment Left Hanging In The Balance

Most major stock indices across Europe and Asia are in the red, although US futures are now pointing to gains when trading begins in New York later today.

It remains to be seen whether US equities can prolong its nascent bull market, having climbed by over 20 percent since March 23, as uncertainties remain over how the depressed global economic outlook would ultimately feed into corporate earnings moving forward.

Policy paralysis leaves Euro on slippery slope

The Euro is now weaker by about 0.4 percent against the US Dollar, with EURUSD dipping further below the psychologically-important 1.09 level. The Euro’s weakness is, in turn, allowing the Dollar index (DXY) to reclaim the 100-handle, given that the Euro carries the most weight in the DXY.

Despite holding a 16-hour teleconference, European Union finance ministers are struggling to agree on how best to support the Eurozone economy amid the coronavirus-induced crisis. Such indecision is set to erode investors’ confidence that the bloc can be adequately supported, with the EU now on the brink of facing its deepest recession in its history. Unless concerted government support measures can be rolled out soon, markets may be willing to allow the Euro to explore more of its downside versus the Greenback amid the glaring policy uncertainties.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Monthly Outlook – Webinar Apr 09

Join Global Head of Currency Strategy & Market Research, Jameel Ahmad, Senior Research Analyst, Lukman Otunuga and Market Analyst, Han Tan, for FXTM’s Monthly Outlook webinar to find out. This insightful presentation reveals potential trading opportunities amid the current global recession, and reveals what lies ahead for Gold, Oil, the Dollar and more.

A live Q&A session will follow, providing you with the perfect opportunity to ask our experts your most pressing questions! Don’t miss out on the chance to learn more about how the latest market volatility might benefit your trading!

All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Risk Management Calculation – Webinar Apr 10

This structured webinar, presented in English, will teach participants the fundamentals of Risk Management calculation and demonstrate how it can be used to manage capital and possibly reduce risk. Robin will also explain how to calculate pip value, and demonstrate how to use mathematical coding in Microsoft Excel. Don’t miss out, sign up today to learn from the comfort of your own home!

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Candlestick Strength Trading Strategy – Webinar Apr 17

Participants will learn how this strategy may help to spot buying and selling pressures on the price chart, as well as discover more about supply and demand. Robin will also teach guests how to identify market direction and to draw Fibonacci levels. Don’t miss out on the chance to discover this fascinating strategy from the comfort of your own home!

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Robin Mazumder is an FXTM Forex Educator, working specifically with Bengali-speaking traders in Bangladesh. He has an MSc Degree in Psychology and over ten years of personal trading experience in both the currency markets and the Dhaka and Chittagong Stock Exchanges. Robin has been teaching the art of Technical Analysis to eager students since 2013. He encourages traders to develop their own simple trading strategies in order to maximise their potential profits. Robin presents webinars and seminars in Bengali, and is also the author of several informative Ebooks on the fundamentals of the foreign exchange market.

Toilet Paper Hoarding Pushes Investors to Grab ‘Ahold’ of Stocks

Since registering a two-year low on March 12, Ahold’s stocks have surged by more than 20 percent, outpacing the gains seen in Tesco (6.16%) and Carrefour (18.9%) for the same period. The Netherlands-based company’s share price has also reclaimed a year-to-date advance, while Tesco and Carrefour remain in the red for the time being.

Social distancing: bringing consumers closer to grocers

Koninklijke Ahold Delhaize NV boasts over 6,700 stores across Europe and the US, with the latter accounting for nearly 2,000 stores, and is complemented by its Indonesian joint-venture, Super Indo. As the virus wreaks havoc in other sectors of the economy, brick-and-mortar grocery stores are proving to be the backbones of their communities amid the crisis, providing daily necessities to households that are left with scarce avenues for getting basic goods in light of lockdown measures.

Given the seismic shift in consumer behavior wrought by Covid-19, many grocery stores around the world have seen double-digit same-store growth, as well as bigger amounts purchased per customer. Although the initial hoarding will subside and give way to more sustainable-sized grocery runs, the fact that most families are barred from eating anywhere else but at home, is translating into a significant boost for grocery store receipts. The steady cash flow should in turn help Ahold’s liquidity position to cover any sudden shifts in inventory and labour costs, aided by the company’s cash pile of over 4.2 billion Euros.

Covid-19 makes online delivery a friend, no longer a foe

Traditional grocers must seize this opportunity offered amid the crisis to ramp up their online offerings. Ahold’s geographical reach and economies of scale may better enable the company in getting groceries to customers’ doorsteps, with the Covid-19 crisis potentially being a major catalyst towards the company’s ambitions of doubling net consumer online sales to around seven billion Euros by 2021.

With online grocery shopping accounting for just five percent of the total market worth an estimated $800 billion in the US alone, there’s certainly more potential to ramp up for Ahold’s US-based online grocery delivery platform, Peapod. This could complement the company’s online endeavors in Europe, where online sales accounted for about 10 and 20 percent of its total sales in Belgium and the Netherlands, respectively, as of end-2019.

Beware global supply chain disruptions

However, if the coronavirus outbreak has a longer-than-expected run in major economies, there remains the risk that global supply chains could be majorly disrupted. Retailers may have to face the costs of overcoming lockdown measures in ensuring adequate stocks, both online and in-store. Supplies may also come at a premium, if there are more manufacturing-plant shutdowns, a scarcity of agricultural workers, or even driver shortages.

Investors expected to keep away from AGM, but not from stocks

The risks and opportunities during this pandemic will certainly colour the company’s AGM today, April 8. Although shareholders are being urged not to attend the meeting in-person, the resilience of Ahold Delhaize may remain a tempting proposition in the stock markets.

Written on 04/08/20 08:00 GMT by Han Tan, Market Analyst at FXTM

For more information, please visit: FXTM


Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

A Candle that Defines the Markets

The question of whether you chase or is this just a massive bull trap is the question everyone is asking.

We can look at money supply (M2), holdings of assets on a central banks balance sheet or even excess cash/liquidity and see this ramping up as a result of the recent central bank measures. Much attention often falls on the level of excess reserves created in the US or Europe but look at excess cash here in Oz – it has gone wild and at a$84b, will only go one-way in the next few weeks; higher.

It’s no disguise that the RBA is content, we heard this in the tone in yesterday’s monthly meeting statement, especially with the interbank cash rate (the rate at which banks source overnight secured funds) trading below the cash rate and into 18bp and likely gravitating towards 10bp – the rate the central bank pay certain financial institutions to hold excess capital on the banks’ balance sheet.

Liquidity has dominated

So, liquidity has dominated. It has certainly caused a rampant wave of short-covering, but we’re also hearing a number of major financial institutions saying that now is the time to look at risk (equities and credit) selectively. Perhaps, but many remain unconvinced – that said, I guess we’ve had an unconvinced market since 2009, and it’s never really felt right buying risk, which is why we always ‘climb the wall of worry’.

What’s interesting is there has been a solid lift in inflation expectations, and that has largely outpaced any upside (through selling) in nominal bond yields. If I look at US 5-year breakevens (a bond instrument for expressing inflation expectations over a five-year timeframe) we can see they have lifted from 11bp to now sit at 87bp.

That said, they have come off their highs today of 95bp today and if they roll over, I am guessing it would be a headwind for risk assets (such as equities and high beta FX – AUD, MXN, ZAR)

Are following stocks or vice versa – chicken and egg…?

S&P500 vs 5yr inflation expectations – red

Source: Bloomberg

The same can be said for the AUDUSD, which has been the star performer on the session pushing into 0.6208 and threatening to print a higher high, with a break of the 31 March high of 0.6214. For this to happen it seems we need stocks and inflation expectations to keep heading higher. If stocks roll over, so will the Aussie it seems.

Part of the rally in the AUD into 62c can be explained by the RBA statement, although, it is somewhat puzzling. The line that should conditions improve, “smaller and less frequent purchases” will be seen clearly resonated. This, of course, is in relation to their asset purchase program, which has been the reason for the massive increase in excess cash in the system.

However, the fact they formally detailed they would look to taper the QE program caused a reasonable reaction, not just in the AUD, but we saw a strong underperformance from Aussie 10-yr bonds, with the 2s v 10s curve closing +14bp at 66bp. The ASX 200 fell 1% but recovered into the close.

AUDUSD – white v US 5yr inflation expectations

So, not a great reaction from a market that has already seen the pace of bond purchases in decline and where the pace of purchases easily covers any additional bond issuance needed from the government (or the AOFM – Australian Office of Financial Management). Either way, it shows how sensitive we are to liquidity, again.

A gravestone doji getting all the attention

It leads me today’s set-up and specifically that of the US500. This chart is so defining for other markets, and sentiment more broadly. Throw in oil, which I also consider to be a huge driver of sentiment, and we have an interesting session ahead of us. A gravestone doji like this will always trigger alarm bells, but it’s what happens after that is so important. If this kicks lower it could trigger a wave of selling through Asia, as those participants that haven’t bought for a 12-18-month view take some off the table. A re-test of the range low at 2467 would be interesting. A renewed bid would obviously negate the candle and it would encourage a chase of the market.

Daily chart of US 500

What trumps liquidity? Obviously, stats that show perhaps the plateau happens later and the shutdown will play out through August. A big drop in crude would see the bears take notice and certainly you’d see that resonate in petro-FX with NOK giving back some of its recent gains. The CAD would be the better short though.

I am not a bottom-up equity guy, but I do think next week’s US corporate reporting season will be must-watch viewing even for macro heads like myself. The market is pricing FY EPS at $151.59 (Bloomberg consensus), which represents a 12% decline in the last few weeks. There are calls from some houses though that estimates should be closer to $110, which would mark a 36% fall in earnings. The question then becomes what multiple the market wants to pay for those earnings and in weak growth, high volatility it may be lower than 17.5x seen at present even if real yields are increasable low.

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Chris Weston, Head of Global Research at Pepperstone.

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Understanding Orders in MT4 – Webinar Apr 08

Designed for both new and intermediate traders alike, this presentation will teach attendees all about the different types of orders one can make and how they can be used. Guests will also learn how to implement orders and take partial profit. Theunis will provide practical examples and demonstrations, as well as answer your most pressing industry questions. Don’t miss out on the chance to learn from one of our experts from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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FXTM Forex Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. He began to trade personally as a hobby, but his keen insights and aptitude soon paved the path towards a successful career. With a decade of solid trading experience to his name, Theunis now enjoys sharing his forex knowledge with others. He also has experience in real estate and holds a degree in Town and Regional planning, complimenting his passion for securing a healthy financial future.

FBS Launches Online Trading School – FBS Trading Bootcamp

While in self-isolation, the bootcamp members will learn to trade on the news, apply technical analysis, and stay updated on the Forex market volatility.

Online classes will be available on the FBS official page on Facebook from April, 8 to April, 24. FBS Trading Bootcamp includes four lessons presented by the best FBS analysts. Those who join will be able to take an active part in the discussions and ask their questions in the comments.

The schedule and basic topicsага

Lesson 1. How to benefit from the news.

The analysts will get to the bottom of trading on news and economic releases explaining how to make money on world events. The students will learn the basics of fundamental analysis and get to know what moment is more appropriate for trading.

Lesson 2. Technical analysis in times of high volatility.

Technical analysis (TA) is a method of predicting the future performance of an asset’s price based on its historical performance. The tutor will explain what kind of technical tools to use and how to distinguish potentially good trading signals from the bad ones in the volatile market.

Lesson 3. Psychological approach of the winners.

Students will get an idea of how to deal with stress when the price goes up, stay calm and confident, and lose no market opportunities.

Lesson 4. How to enter the market at the right time

During this class, the analyst will summarize the results and tell how to pick the best levels for opening a trade.

Certificates

Upon finishing all the lessons, bootcampers will be asked to take a quiz and get a follow-up after it. Once the test is passed, the students will get the course completion certificate.


FBS is a broker with an international outlook that serves clients in Asia, Latin America, Europe, and the MENA. Its main focus lies in offering financial products for currency, precious metals, CFD, and stock trading for clients with different goals and backgrounds. The company features a low barrier to entry, top-ranking apps, and a wide social trading network. Over 11 years in the field, the broker won 50 international awards, including Best International Forex Broker, Best Forex Brand, and Most Progressive Forex Broker Europe.

 

The Impact of Coronavirus on the U.A.E Economy

Regardless of how late in the game this declaration may or may not have come, at the very least this raising of the alarm will now urge governments to take the issue seriously and redouble their efforts to prevent its spread.

It’s now becoming widely accepted that moving the infection curve to the right is our best bet at containing the virus without overwhelming our national health care systems. As more data emerge regarding the virus’s epidemiological characteristics, we become better equipped to deal with it and to care for those afflicted.

With these former unknowns gradually transforming into knowns, attentions are turning to the manifold implications that our efforts to contain Covid-19 will have on our increasingly interconnected global economy. Most markets are now well into correction mode, with many already dipping into bear market territory. As far as the U.A.E is concerned, we can currently divide the knock-on effects into impact on travel and tourism, commodities and the effect on Emirati society.

Emirati Society

As far as social effects are concerned, the U.A.E is a highly organised, well-funded, technologically advanced and cooperative society. This greatly increases the likelihood that the radical measures being employed to counteract Covid-19 will succeed in at least slowing its spread.

The speed at which the country has moved to disinfect public spaces, as well as installing thermal cameras, banning Shisha, postponing large gatherings, shuttering educational establishments and restricting prayer times, bodes well for containment. As we have seen from other countries like Singapore and Hong Kong, moving swiftly in a coordinated fashion is key to preventing the virus’s spread.

Travel and Tourism

Air transportation is an important source of revenue for the UAE, being home to Emirates, the world’s largest long haul airline, as well a centre for other major regional carriers such as Etihad Airways and Air Arabia. According to a 2019 report from the International Air Transport Association, air transportation accounted for $19.3 billion, or around 5% of the U.A.E’s GDP last year. When you factor in tourism as well, this figure more than doubles. The World Travel and Tourism Council had travel and tourism accounting for over 11% of the U.A.E’s GDP in 2018.

All airlines will have to contend with cancellations as further flight restrictions come into effect. With global travel almost certain to be severely disrupted well into Q2 of 2020, this is definitely a key part of the U.A.E’s economy that will take a hit. Shares in Air Arabia fell to lows of 1.08AED during Monday’s trading session before recovering slightly in the following days. They are currently down more than 30% year-to-date.

The good news is that the U.A.E’s airline industry is likely to be much better prepared to weather the coming storm than those of other countries. Taking Air Arabia as an example, its trailing twelve-month quick ratio (liquid assets divided by current liabilities) currently stands at 1.24 (higher is better, ratios below 1 are undesirable).

By contrast, Southwest Airlines, which is the largest low-cost carrier in the world, has a trailing twelve-month quick ratio of 0.61. Air Arabia’s quick ratio is also significantly higher than the airline industry’s average, which comes in at 0.29, and thus may be in a far better position to withstand this shock. 

Oil

The U.A.E recently entered the fray of the oil price war between Saudi Arabia and Russia, following the breakdown in talks between OPEC+ members earlier this month. On Wednesday, March 11th it announced that it would also begin ramping up its own oil production.

Abu Dhabi National Oil Company Chief Executive, Sultan Ahmed Al Jaber, stated that the company was currently able to supply the market with 4 million barrels per day, but is planning to increase this amount to 5 million per day in April. Being the only major producer that still prices its oil retroactively, it has also lowered the price of its four grades for February sales by $1.63 per barrel.

The coronavirus has massively exacerbated the demand shock of an industry already contending with a global slowdown. The strategy now appears to have shifted from maintaining a given price level via production cuts to competing for market share with producers like the US and Canada that cannot profitably extract at these lower prices.

Russia, Saudi Arabia and the U.A.E can all endure a lower price of oil without major disruption to their respective economies. Russia currently has the lowest debt-to-GDP ratio of the three, with the Emirates coming in second and Saudi Arabia third.

For now, it appears that all three are intent on pumping more oil, albeit at these lower prices, and accumulating as many dollars as possible. If you consider that the U.A.E is the most diversified economy in the MENA region, it seems as though it could pivot its economy quicker than other Gulf states should lower-for-longer continue to be the narrative for oil going forward.

Gold

As a regional centre for gold trading in the Middle-East, gold in raw, semi-worked and jewellery form is highly important to both the U.A.E’s import and export figures. In 2018, unwrought gold made up the U.A.E’s largest imported item, with exports of raw and semi-worked gold accounting for more than 25% of its exports.

The country’s large gold market is likely to benefit from investors across the entire region flocking to the precious metal as a safe haven. Saudi Arabia and India, both large importers of the precious metal, make up two of the U.A.E’s largest export partners.

However, its involvement in a variety of gold industries makes soaring gold prices something of a double-edged sword for the Emirates. Elevated prices in the raw commodity are good for its bottom line as a re-exporter of large quantities of African gold. Nevertheless, high gold prices will tend to weigh on its extensive jewellery trade.

Indian families account for the largest privately owned hoards of gold in the entire world, more even than the Saudi royal family. As gold pushes higher and the rupee falls, the U.A.E’s 3.5 million Indian migrant workers, who make up around 27% of the country’s total population, are far more likely to be sending their money straight back home, rather than purchasing gold jewellery as they are ordinarily known to do.

By Giles Coghlan, Chief Currency Analyst at HYCM

About HYCM

HYCM is the global brand name of Henyep Capital Markets (UK) Limited, HYCM (Europe) Ltd, Henyep Capital Markets (DIFC) Ltd and HYCM Ltd, all individual entities under Henyep Capital Markets Group, a global corporation founded in 1977, operating in Asia, Europe, and the Middle East.


High Risk Investment Warning: Contracts for Difference (‘CFDs’) are complex financial products that are traded on margin. Trading CFDs carries a high degree of risk. It is possible to lose all your capital. These products may not be suitable for everyone and you should ensure that you understand the risks involved. Seek independent expert advice if necessary and speculate only with funds that you can afford to lose. Please think carefully whether such trading suits you, taking into consideration all the relevant circumstances as well as your personal resources. We do not recommend clients posting their entire account balance to meet margin requirements. Clients can minimise their level of exposure by requesting a change in leverage limit. For more information please refer to HYCM’s Risk Disclosure.

A Bumpy Road Ahead

Looking at the new daily infected cases and death toll from Spain, Italy, Germany and France, all of those countries seem to be heading into a downward trajectory. Meanwhile, in the US, the governors of New York, Louisiana and New Jersey pointed to cautious signs that the virus outbreak may be starting to flatten.

It saddens me to use a ‘death’ indicator as a financial market tool, but that’s what’s driving investors at the moment. The declining number of deaths registered due to COVID-19 suggests that we are winning the fight against this horrible virus. Total death rates had decreased from 13% at the start of April to 7% yesterday. That’s the first time we have seen a single-digit number since March 14.

The drop in newly infected cases and death toll sparked a sharp rally in equities, with US stocks registering its best day in a fortnight – and its eight best day since the end of the second world war – as the S&P 500 and Dow Jones Industrial Average both rallied more than 7% on Monday. At this stage, markets are repricing the worst-case scenario due to the virus outbreak, but in my opinion, it’s still too early to justify a prolonged move higher.

Investors moving into risk assets at this stage believe that we’re heading into a V-shaped recovery. Attractive valuations, ‘fear of missing out’ and extraordinary stimulus packages also exaggerate the upside moves in prices. However, no one yet knows the exact damage this virus has already done to the global economy, corporate earnings, and what kind of exit strategies countries will follow in the weeks ahead. Without proper treatment or vaccination, lockdowns could be reimposed and the global economy will then continue to suffer. The corporate earnings outlook is also very murky as the dispersion of analysts’ forecasts are near a record high. Hence, the road ahead won’t be a smooth one, especially as investors still need to digest a mountain of negative economic data and possibly many bankruptcies.

In my opinion, the best-case scenario is likely to be a U-shaped recovery and not a V-shaped one. The world post-coronavirus is not going to be the same for a long time to come. Social behaviour needs time to return back to normal which means the service sector will continue to feel the pain. For now, let’s hope that we beat the coronavirus and it becomes just a memory of the past.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

Gulf Brokers Introduces Advantages of Metatrader 5

It has more advanced graphs and analytical tools as well as more timeframes including 2 minutes and 8 hours. Economic calendar has been added, email system now allows sending attachments and exchange trading is now possible. It is also important to mention that MetaTrader 5 provides further ways of trading in terms of both investment instruments and trade methodologies.

MetaTrader 5 has more timeframes, allows more pending orders and more technical indicators. You can completely access all of your trading through the web and monitor – all aspects of markets from anywhere in the world. Many users reckon that MetaTrader 5 is easier to navigate because of its larger and more spaced out buttons. Meta Trader 5 absolutely corresponds to the world practice of online trading, it is sure, that many professionals will be interested in the possibilities of the new program and eventually it will find its admirers.

Gulf Brokers can offer one type of trading account on which you can trade DGCX futures contracts. Currency of your trading account is to be denominated in USD.

MetaTrader 5 has more timeframes, allows more pending orders and more technical indicators. You can completely access all of your trading through the web and monitor all aspects of the market from anywhere in the world.

Summary of MT5’s unique features:

  • Flexible Trading System
  • Professional Technical Analysis – MQL5, more than 80 indicators and tools
  • Fundamental Analysis
  • Advanced Strategy Tester
  • Trading Tab for One-Click Trading
  • Highlighted Entry/Exit Points
  • NDD/STP
  • Multi-currency/language support
  • Available on all popular mobile platforms

MetaTrader 5 is the best platform to access exchange markets and Forex at the present time. It is a great choice for any trader who appreciates modern and comfortable trading platform.

Learn more about trading at www.gulfbrokers.ae

Lukman’s Week Ahead: Market Themes To Watch Out For – Webinar Apr 06

An authority on the markets, Lukman is frequently quoted by leading media across the globe, including the BBC, CNBC, CNN Money and Reuters. Join Lukman for expert insights on the latest market movements, potential trading opportunities and what the week ahead has in store for traders. Enjoy an expert look at:

• The key themes driving the financial markets
• Technical and fundamental trading ideas on the MT4 platform
• How to use the latest FXTM trading signals
• Using fundamental analysis to increase your profit potential
• What to monitor over the coming week

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FXTM Account Types – Webinar Apr 07

Trading Educator Bilal Jafar will translate his years of impressive market experience into practical insights you can use to help make this important decision. Explore the difference between market and instant execution, what causes slippage and requotes, and what you need to know about spreads and commissions. FXTM has a huge range of different account types that cater for every type of trader. Register for this webinar today to find out more! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

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Bilal Jafar is a Forex Educator with FXTM. He holds an MBA in Finance from the Institute of Business & Management, Lahore, and has over eight years of experience in the financial markets. He started his journey as a forex trader and also worked in different positions within sales and education. In 2015, he founded and began serving as the Editor of Pak Economy, one of Pakistan’s leading business and financial magazines. After working as a Business Development Manager with FXTM, he then joined the Education department to pursue his passion for sharing his forex knowledge. His diverse experience in sales, media and education gives him an extra edge that helps him better understand traders’ educational needs.

Oil Slips After Delay To OPEC+ Emergency Meeting

Brent Oil started off the week with a 7.8 percent drop as the Asian trading session progressed, while Crude prices slipped back below the psychological $30/bbl level after opening 8.6 percent lower compared to the Friday’s close. Both however have pared losses as the Asian trading session progressed.

The primary goal of the meeting among major producers is to address the collapse in Oil prices, with Brent having shed 48.8 percent so far in 2020, while Crude has a year-to-date drop of more than 55 percent. The delay is raising doubts as to whether Saudi Arabia and Russia can overcome their differences and end the ongoing price war, while trying to rally other members of the OPEC+ alliance towards reducing output. It also remains doubtful whether the US will partake in this coordinated attempt to stem output, even though their participation appears vital to the success of any OPEC+ deal.

Significant supply cuts are needed to try and stabilise the markets, considering that the coronavirus outbreak has severely dented global demand by an estimated 20-30 million barrels per day. People are forced to stay within the confines of their homes, planes are grounded, and factories ordered shut, all of which drastically reduces global demand for the commodity.

A production cuts deal is necessary in order for both Brent and Crude to keep their heads above $30/bbl, and at least put a firmer floor below Oil prices. It is highly unlikely that an implementable output limit at this juncture would send Oil prices soaring to early-2020 levels, given the demand-side decimation due to Covid-19. Further delays to an OPEC+ supply-cuts agreement could see Oil prices unravelling more of last week’s 50 percent gains, as investors’ hopes wane further over OPEC+’s will to stabilize markets amid a global recession.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.

FX Trading Strategies

What is a trading strategy?

A good strategy tells you when to execute your trades based on your established, tried and tested method. There are numerous forex strategies that you can use, including fundamental analysis and technical analysis.

By trading objectively following your chosen trading strategy and with sound risk management techniques, you can trade confidently over the long-term.

How does a forex trading strategy work?

Fixed rules which determine entry and exit points can help you take the emotion completely out of trading. This is key to potentially making more consistent gains and becoming a more profitable trader.

The most important key components to a successful FX trading strategy are:

  • Selecting the market – which currency pairs are you going to trade, what hours of the day are these most active, and do you understand the interaction between the two currencies.
  • Entry point – you must determine consistent rules which determine when you go long or short in the currency pair.
  • Exit point – you should ensure you have rules to exit a long or short trade, either by taking profit or exiting for a loss at a pre-determined price.
  • Tactics – rules to buy and sell currency pairs need to be established, determined by all market conditions and using either manual or automated tools to generate your trading signals.

Benefits of using an FX trading strategy

  • Strong, effective trading

A robust plan for all market conditions allows you to be consistent in monitoring and improving your results going forward.

  • Controls your emotions

You are confident and comfortable with your rules and do not overreact to sudden market moves.

  • Understanding of risk

A fixed strategy means you manage your risk effectively on every trade, using a stop loss. You respect certainty over risky trading behaviour.

Opening a demo account allows you to practice your strategies in real market conditions. You do not risk your own money and it’s a great way to apply your strategy to real world price action. Learn more about FXTM demo accounts here.

Four types of forex trading strategies

  1. Day Trading

This short-term strategy means you don’t hold any position overnight – you enter and exit all orders within the trading day. This normally means you trade a large number of positions for small profits.

  1. Scalping

This type of day trading is more intense and involves even shorter timeframes, where you hold a trade for a few seconds or minutes at most. You exit your position as the market moves in your favour.

  1. Position Trading

Position trading is a longer-term trading strategy, usually involving fundamental analysis to forecast trade ideas. Short-term market fluctuations are less important, and you will probably have only a small number of trades open, but with a higher value.

  1. Swing Trading

This strategy involves technical analysis to take advantage of short to medium-term market movements. Like both day and position trading, you look to identify intermediate trends in the market.

A trading strategy often reflects the personality of a trader. So, it is important to try and find a style and strategy that suits you.

You can test out your strategies by simulating forex trading – both manual and automated – on our demo account.

Take your forex trading to the next level. Discover more about forex trading strategies at https://www.forextime.com/education/forex-trading-strategies.


Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.”

Coronavirus’ Impact on the Market: Live Analysis – Webinar Apr 06

Curious to learn more about the latest market psychology? Join FXTM’s Trading Educator Theunis Kreuger for a special presentation and live market analysis that will focus entirely on how the virus is affecting the markets. Attendees will learn more about the current economy crisis from both a fundamental and technical analysis perspective. Attendees will also be encouraged to participate and ask Theunis their most pressing industry questions. Don’t miss out on the chance to learn from our expert from the comfort of your own home! All the material presented has been approved by the Company’s Key Individual, in accordance to FSCA guidelines.

REGISTER FOR FREE

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  • Click ‘Join Now’ on your chosen Webinar
  • Check your inbox for the webinar link

FXTM Forex Educator Theunis Kruger has always been fascinated by economics, with a particular interest in ‘wave’ formations and how they can be used to forecast and analyse trends in the financial markets. He began to trade personally as a hobby, but his keen insights and aptitude soon paved the path towards a successful career. With a decade of solid trading experience to his name, Theunis now enjoys sharing his forex knowledge with others. He also has experience in real estate and holds a degree in Town and Regional planning, complimenting his passion for securing a healthy financial future.

Ichimoku, Moving Average and Fibonacci Trading Strategy – Webinar Apr 03

This structured webinar, presented in English, will teach participants a trading strategy combining two popular indicators. Perfectly demonstrated step-by-step, this session will teach you how to setup, attach and use these indicators, and – most importantly – how to combine them to identify the prevailing trends in the market from the comfort of your own home. Don’t miss out, sign up today!

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  • Click ‘Join Now’ on your chosen Webinar
  • Check your inbox for the webinar link

Robin Mazumder is an FXTM Forex Educator, working specifically with Bengali-speaking traders in Bangladesh. He has an MSc Degree in Psychology and over ten years of personal trading experience in both the currency markets and the Dhaka and Chittagong Stock Exchanges. Robin has been teaching the art of Technical Analysis to eager students since 2013. He encourages traders to develop their own simple trading strategies in order to maximise their potential profits. Robin presents webinars and seminars in Bengali, and is also the author of several informative Ebooks on the fundamentals of the foreign exchange market.

RoboMarkets Improves Trading Conditions for ECN-Pro and Prime Accounts

What changes have been introduced?

Spread values on ECN-Pro accounts are now similar to Prime ones. The leverage for ECN-Pro accounts has been increased up to 1:500. The maximum permissible leverage will be available only to Professional clients.

Trading conditions for premium accounts of a “Prime” type have also improved. The minimum deposited amount for these accounts is just 100 USD instead of 5,000 USD required earlier. The leverage value available to Professional clients has been increased up to 1:300.

We’re holding to our course on the improvement of trading conditions. Standing in close relations with our clients, we analyze the statistics and implement new technologies in order to follow our priorities for compliance with the highest quality standards. This promotion will allow RoboMarkets clients to take their trading operations to a brand new efficiency level and trade on some of the most competitive trading conditions in the industry throughout the entire year.” – said Anton Ivanov, a marketing manager at RoboMarkets.

About RoboMarkets

RoboMarkets is an investment company with the CySEC license No. 191/13. RoboMarkets offers investment services in many European countries by providing traders, who work on financial market, with access to its proprietary trading platforms. More detailed information about the Company’s products and activities can be found on the official website at www.robomarkets.com.

Greenback in Focus Before US Initial Jobless Claims

Greenback performed well against major currencies in March amid coronavirus fears and economic concerns. The Dollar Index jumped above 100 for the first time in more than three years as demand increased for safe-haven assets. While major currencies saw a recovery of late as global stock markets have found their footing, but concerns over how the magnitude of global economic devastation is still on the mind of investors.

Governments around the world are announcing economic stimulus packages in order to cushion the economic impact as a third of the world’s population is living under lockdown regulations. US President Donald Trump signed the historic $2 trillion stimulus package on Friday March 27, and the Dollar took a hit subsequently as investors started buying equities in hopes that the $2 trillion stimulus package will be enough to save the US economy.

The pandemic is showing little signs that it is going away soon, as the number of cases continues to be on the rise with US leading the world with close to 190,000 confirmed cases at the time of writing. USD investors are keeping a close eye on this week’s number as it might surpass the last reading at 3.28 million.

Economists at the St. Louis Fed projected that the unemployment rate could go as high as 32.1%, which would translate to 47 million Americans losing their jobs. If this is as bad as things could get, this scenario would develop a strong case for investors to run for safety in the form of the DXY, but as of now, the Dollar is under pressure against JPY, GBP, and AUD.

USDJPY

On the technical side, USDJPY on the 4-Hour timeframe has been following a downtrend since March 25. The price registered the lowest level of the period under study at 107.099 on March 30. As of writing, the USDJPY pair is hovering around 107.250 with negative Moving Average Convergence Divergence and Momentum below the 100 level.

The pair is currently trading below the 50-period simple moving average with Relative Strength Index below 50 which supports the recent bearish price move. Resistance level lies at 111.702 while the support level lies at 107.099. Bears are trying to push the price below the 107.000 level but a push above 108.000 could strengthen the argument for a bullish move.

Written on 02/04/2020 by Bilal Jafar, FX Trainer at FXTM

For more information, please visit: FXTM


Disclaimer: This written/visual material is comprised of personal opinions and ideas. The content should not be construed as containing any type of investment advice and/or a solicitation for any transactions. It does not imply an obligation to purchase investment services, nor does it guarantee or predict future performance. FXTM, its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness of any information or data made available and assume no liability for any loss arising from any investment based on the same.

Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Volatility Subsides As Markets Await Next Covid-19 Development

Still, equity markets have calmed down noticeably, with the VIX having declined by 35 percent since its March 16 peak, although it is still more than three times the average over the past five years. That said, investors must remain vigilant against another spike in volatility, as equity markets may be triggered into another sell-off on any signs that the Covid-19 crisis is worsening.

Considering the relatively elevated levels of safe-haven assets, it’s abundantly clear that investors remain cautious over the virus fallout. The Dollar index is not straying far from the psychologically-important 99 level, Gold is trading around the upper-$1500 range, while USDJPY is keeping to sub-108 levels for the time being. Risk sentiment appears to be in a holding pattern at present, awaiting the next major development in the coronavirus outbreak.

Markets cannot afford to ignore warning signs

President Trump’s warning to America to brace for a “very, very painful” two weeks, coupled with his administration’s estimate that as many as 240,000 Americans may lose their lives to Covid-19, is a stark reminder that the coronavirus-induced crisis is still raging in major economies. Although China’s PMI figures released this week mark a return to expansion, investors are still treating such data with caution as the gains in Chinese stocks are not echoed across the rest of Asia. As the saying goes, ‘one month does not make a trend’. With a global recession now being the overarching theme for the year, investors are expected to endure a bumpy ride before they can place firm hopes on the eventual recovery.

Stocks yet to find equilibrium amid expected earnings downgrades

The quest in finding that floor for stocks appears to still have some way to go, given that valuations remain relatively elevated compared to how corporate earnings typically fare amid a recession. Although the S&P 500’s P/E ratio has now moderated to its 50-year average of 17, it’s still higher than the reading of 10 that was registered after the Great Financial Crisis in 2009.

What remains of the stubborn optimism in equities will likely be tested when the next US earnings season gets under way in two weeks. A one-two punch of negative surprises in earnings and a still-rising death toll Stateside should eviscerate misplaced hopes that the recent monetary and fiscal support measures can immediately repair the economic damage left in the wake of the coronavirus.

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Disclaimer: The content in this article comprises personal opinions and should not be construed as containing personal and/or other investment advice and/or an offer of and/or solicitation for any transactions in financial instruments and/or a guarantee and/or prediction of future performance. ForexTime (FXTM), its affiliates, agents, directors, officers or employees do not guarantee the accuracy, validity, timeliness or completeness, of any information or data made available and assume no liability as to any loss arising from any investment based on the same.