Forex Trading Review Guide

Monday, November 1, 2021

Dollar Up, Yen Down Over Surprise Japan Election Result

from Forex News https://www.investing.com/news/forex-news/dollar-up-yen-down-over-surprise-japan-election-result-2662100
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Dollar holds firm as Fed decision looms; yen dips on LDP victory

from Forex News https://www.investing.com/news/economy/dollar-holds-firm-as-fed-decision-looms-yen-dips-on-ldp-victory-2662070
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Sunday, October 31, 2021

Key Economic Events and Reports for the Week Ahead

Next week, markets will undoubtedly focus on two key events - the FOMC decision and release of the Non-Farm Payrolls report. The Fed meeting will take place earlier, on Wednesday, that’s why the relevance of NFP report will be much lower than usual.Rising inflation around the world is forcing central banks to cut stimulus and, in the case of emerging economies, rather aggressively raise rates. The Fed is expected to start with reducing monthly asset purchases (QE) and is expected to announce this decision next week. The key uncertainty is the pace of QE tapering: if the announced pace is higher than the market expects, then Treasury interest rates are likely to react upward, and the dollar may strengthen against other currencies. The moderate pace of tapering is unlikely to disappoint the dollar, as the Fed's intention to announce the start of QE tapering in November has already been priced in by the market. Thus, the risks for the dollar are shifted towards continuation of the rally.The Non-Farm Payrolls report will be released next Friday and, as mentioned above, will most likely have a negligible impact on the market, since labor statistics are primarily interesting because the Fed is guided by the dynamics of employment in making decisions on monetary policy. Since the Fed's stance will be known already on Wednesday, the NFP release will likely receive tepid market response.It is also worth watching next week for the events such as the Australian Central Bank's monetary policy decision, the Bank of England's interest rate decision, and the ADP US employment change report on Wednesday.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/key-eonomic-events-and-reports-for-the-week-ahead-31-10-2021"
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Ключевые экономические отчеты и события следующей недели

На следующей неделе состоятся сразу два очень важных для рынка события – заседания ФРС и публикация отчета Non-Farm Payrolls. При этом заседание ФРС состоится раньше, в среду, в связи с чем актуальность отчета по рынку труда будет не столь высокой, ведь ФРС уже обозначит свои намерения.Растущая инфляция по всему миру вынуждает центральные банки сокращать стимулирование и в случае развивающихся экономик, довольно агрессивно повышать ставки. ФРС будет начинать с сокращения QE и как ожидается на следующей неделе объявит об этом. Ключевая неопределенность в темпах сворачивания QE: если темп будет выше, чем предполагает рынок, то в этом случае ставки Трежерис скорей всего отреагируют вверх, а доллар может укрепиться против других валют. Умеренный темп смягчения вряд ли разочарует доллар, так как намерение ФРС сделать объявление о начале сворачивания программы в ноябре уже в целом учтено рынком. Таким образом риски для доллара смещены в сторону продолжения ралли.Отчет Non-Farm Payrolls выйдет в следующую пятницу и как уже было сказано выше окажет скорей всего незначительное влияние на рынке, так как трудовая статистика прежде всего интересна поскольку, поскольку ФРС ориентируется на динамику занятости в принятии решений по монетарной политике. Так как позиция ФРС будет известна уже в среду, рынок может оставить отчет NFP незамеченным.На следующей неделе также стоит следить за такими событиями, как решение Австралийского ЦБ по монетарной политике, решение Банка Англии по процентной ставке, отчет ADP по изменению занятости в США в среду.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/klyuchevye-ekonomicheskie-otchety-i-sobytiya-sleduyushei-nedeli-31-10-2021"
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Saturday, October 30, 2021

ECB: Higher but Still Temporary Inflation Ahead

EU inflation in the coming years will be higher than previously estimated and only slightly below the ECB target of 2% in 2022, showed on Friday the ECB poll, which is one of the main sources of information which drive policy decisions of the Central Bank.According to the survey of professional forecasters, the growth of consumer prices in 2021 will be 2.3%, and in 2022 - 1.9%, compared with 1.9% and 1.5%, respectively, in the previous survey, which was conducted three months ago."Respondents attribute the upward revision mainly to higher energy prices and the impact of supply chain tensions," the ECB said."Although both of these factors were mentioned in the previous poll, the development of the situation in recent years, according to experts, was more tense and, as experts expect, this tension will be observed longer than previously thought."Inflation, which has already doubled the ECB's target level, will continue to accelerate and possibly reach 4% in the coming months due to skyrocketing commodity prices and industrial supply bottlenecks, which will put pressure on both producer prices and consumer prices.

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/ecb-higher-but-still-temporary-inflation-ahead"
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The charts that matter: The US dollar falls and Tesla hits the $1trn milestone

Tesla hits a market cap of $1trn and the US dollar weakens. Here’s how that has affected the charts that matter most to the global economy.

from Moneyweek RSS Feed https://moneyweek.com/economy/global-economy/604036/the-charts-that-matter
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Friday, October 29, 2021

Cryptocurrency roundup: Bitcoin falls below $60,000 and Tesla's Elon Musk U-turns again

Bitcoin falls below $60,000, Tesla's Elon Musk signals the company may accept crypto again and El Salvador buys more bitcoin. Saloni Sardana rounds up on the biggest crypto stories of the week.

from Moneyweek RSS Feed https://moneyweek.com/investments/alternative-finance/bitcoin-crypto/604037/cryptocurrency-roundup-bitcoin-falls-below
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Events to Look Out for Next Week

Caixin Manufacturing PMI (CNY, GMT 12:45) – The key data point from China follows the non-manufacturing number which is due on Sunday before the market open. The manufacturing number is expected to hold steady at the key 50.00 pivot point with the non-manufacturing number slipping slightly to 52.9 from 53.2.
ISM Manufacturing PMI (USD, GMT 13:00) – The key ISM manufacturing number printed at 4-mth high in October at 61.1 and is expected to register a slip to a still healthy 60.4, still well below the 2021 high in April of 64.7
Monetary Policy Meeting Minutes (JPY, GMT 23:50) – confirmation likely of the BOJ’s continued accommodative policy, improved outlook and inflation expectations.

Tuesday – 02 November 2021

Interest Rate Decision, Statement and Conference (AUD, GMT 14:00) – Australian short-term yields have rocketed this week after stronger than expected retail sales and speculation that the RBA will officially drop its yield target during this meeting and amend its forward guidance. Westpac this week confirmed their expectation for a rate hike in Q1 2023, while current RBA guidance still talks of 2024.
Unemployment rate & Employment Change (NZD, GMT 21:45) The Q3 unemployment rate is expected to move higher to 4.5% from 4.0% with the Employment change slipping to +0.7% from 1.0%, whilst the participation rate remains steady at 70.6%.

Wednesday – 03 November 021

ADP Employment change (USD, GMT 11:15) – The private payrolls report is expected to show a significant drop to 369,000 from 568,000 in October. Although the link to the NFP data is clearly now broken many traders will still be focused on the size of the decline in private payrolls.
ISM Services PMI (USD, GMT 13:00) – A decline from Octobers spike to 61.9 is expected with the data slipping 0.4 to a still healthy 61.5. The cycle high was the August 64.1 up from the March low at 55.3.
Interest Rate Decision, Statement and Conference (USD, GMT 17:00)–The market expects the Fed to announce the widely anticipated taper, ($10-20bln, with expectations focused on $15bln) which should extend into the middle of 2022, though no signals are expected regarding the timing of an eventual rate hike cycle, which the market now assumes will be seen in 2022 and not 2023. Chair Powell’s press conference will follow 30-minutes after the announcement.

Thursday – 04 November 2021

OPEC-JMMC Meetings (USD, GMT All-day) – With Crude Oil prices continuing to track higher and the Energy crisis in Europe showing some signs of easing all eyes will be on the latest OPEC pronouncements. The 400k barrels per day increase for November was part of the organizations continued “gradual” increases agreed back in July. This is likely to remain in place, despite some pressure from within for greater production increases.
Interest Rate Decision, MPC & Report & Votes & APF Report (GBP, GMT 11:00 & 11:30) – Markets have factored in prevailing BoE tightening expectations, which has led to the Pound losing upside momentum this week. Market participants will also be cognisant of higher interest rates at a time when the UK economic recovery is experiencing pronounced delivery/supply chain issues alongside near record energy prices. The consensus is for the BoE to hike its repo rate by 15bp to 0.25% in Q1 2022, although there seems to be an outside risk of such a move coming as soon as this meeting after the new BoE Chief Economist Pill affirmed that the meeting will be a “live” one, signalling that a move is a possibility, although unlikely. The Governor Bailey press conference will follow 30-minutes after the announcement.

Friday – 05 November 2021

Non-Farm Payrolls (USD, GMT 12:30) – Expectations are for a 380,000 October nonfarm payroll increase, after gains of 194,000 in September, 366,000 in August, and 1.091m in July. Expectations are for the jobless rate to hold steady at 4.8% for a second month, down from 5.2% in August. Hours-worked are assumed to rise 0.2%, after the 0.8% September increase, while the workweek ticks down to 34.7 from 34.8 in September. Average hourly earnings are assumed to rise 0.3% after gains of 0.6% in September and 0.4% in August, while the y/y wage gain should accelerate to 4.8% from 4.6%.
Labour Market Data (CAD, GMT 12:30) – The Canada employment change disappointed last month at 65,000 in August, missing expectations, after the 157,100 surge the previous month, following the robust surprise of 231,000 back in June. The unemployment rate is expected to hold steady this month at 6.9% continuing the decline from 9.4% at the start of the year.

Click here to access our Economic Calendar

Stuart Cowell

Head Market Analyst

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.

from HF Analysis /282979/
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CADJPY – Central Bank meetings still can’t set a new direction

CADJPY, H4

This is another pair that enters the base adjustment mode before entering the new month. After moving up continuously since late September the Canadian Dollar was driven by oil prices and energy shortages, while the movement of the central banks of both countries this week has not yet set a new direction for this pair. At its meeting this week, the BoC kept its interest rate unchanged at 0.25%, but surprised by ending its QE program to enter a new investment phase. The country’s economic growth forecast has been revised down to 5.1% from the 6% forecast in July amid warnings of rising inflation from energy prices and continued supply chain bottlenecks.

Like the BoJ yesterday, the BoC kept its interest rate unchanged at -0.1%, but cut its GDP forecast for this year to 3.4% from the 3.8% forecast in July. It cited sluggish consumption and slowing exports due to supply chain issues.

Key economic numbers to end the week are Canada’s Q3 GDP reading, after a sharp fall in Q2 of -1.1%, below the 2.5% expected by the market and down from the 5.5% seen in the previous quarter.

From a technical point of view the pair has been in correction mode since last week, having made a nearly six-year high at 93.00. On H4, a bullish flag is seen forming with declining momentum. MACD is moving in a narrow range near the 0 line. The RSI is hovering around the 50 level with the first support at 91.70. If it breaks down there will be a next support at the week low at 91.20 and could lead to a short-term downtrend. On the contrary, if the price is able to break through the original high of 93.00 this will confirm the bullish flag pattern and the uptrend will continue.

Click here to access our Economic Calendar

Chayut Vachirathanakit
Market Analyst – HF Educational Office – Thailand

from HF Analysis /282990/
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Key USD Bearish Threshold Remains Intact

Eurozone inflation was materially higher than the consensus forecastin October, making it slightly difficult for the ECB to maintain a huge stimulusbias in the monetary policy. The data on Friday showed that the broad rise inprices in October amounted to 4.1% (forecast 3.7%). At the same time, coreinflation, which doesn’t include fuel and other goods with volatile prices,also beat the forecast - 2.1% versus the expected 1.7%: At a meeting on Thursday, the ECB gave a signal thatofficials are closely monitoring inflation, but still expect it to decay soonerthan markets fear. Some officials, though, see a second round of inflationaryeffects, primarily caused by wage inflation, so they do not exclude that consumerinflation will remain above the target level of the ECB in 2023. In general, wecan say that the European Central Bank signaled a reduction in asset purchasesin December, which caused widening spreads between sovereign bonds of Eurozonecountries and a positive reaction from the euro. The spread between the 10-yearbonds of Italy and Germany jumped by 7 bp on Thursday as market participants becamemore confident that the ECB's artificial support for "second tier" EUsovereign bonds will soon begin to decline. Today this spread has added another10 bp:In addition to the factor of December tapering, Eurozone sovereign bonds are declining in price due to the risks of an early start of the ECB tightening cycle. Although Lagarde said it was important not to overreact to temporary supply shocks, the effects of which would soon wear off, market participants shifted their expectations of the ECB's first rate hike to October 2022, i.e. even earlier than previously expected. It is clear that the opinion of market participants regarding persistence of inflation is now very different from the opinion of the ECB, and if inflation risks do not materialize, battered bond prices may quickly recover, since the inflation premium will ultimately unwind. The euro will definitely benefit from this trend.Today, the data is due on US inflation and consumer sentiment from U. Michigan for October, key for the Fed's policy. A higher-than-expected rate of inflation, measured in terms of percentage growth of consumer spending, could mean a more aggressive pace of phasing out the Fed's asset purchases, which it is likely to announce in November. Next week, market participants will focus on the October Non-Farm Payrolls report, which will additionally help to improve expectations about the Fed’s policy move in the near future. Risks for the dollar are biased towards further growth next week as this week's correction appears to have been run out of steam. If DXY manages to close above 93.50 mark, this should be another strong technical signal for recovery next week, since a key bullish trendline will remain intact:

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/key-usd-bearish-threshold-remains-intact"
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China’s Mega Banks Extend Profit Gains on Easing Bad Loans

from Forex News https://www.investing.com/news/forex-news/chinas-mega-banks-extend-profit-gains-on-easing-bad-loans-2660494
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How to profit from sterling right now

Sterling has displayed a repeated cycle with the US dollar. Dominic Frisby looks at what that is and how investors can play that trend.

from Moneyweek RSS Feed https://moneyweek.com/currencies/604035/how-to-profit-from-sterling-right-now
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Dollar Edges Higher; Euro Gains After ECB Meeting

from Forex News https://www.investing.com/news/forex-news/dollar-edges-higher-euro-gains-after-ecb-meeting-2660347
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Daily Market Outlook, October 29, 2021

Daily Market Outlook, October 29, 2021 Overnight Headlines Evergrande Makes Another Payment, Avoiding Default For Second Time Japan's Factory Output Drops Steeply As Nation Heads To Polls ANZ Expects RBA To Scrap April-2024 Yield Target Next Week NAB Sees RBA Scrapping Yield Target at Tuesday's Meeting Dollar Wallows Near One-Month Low As Strong Euro, Stock Rally Weigh Oil Prices Set For First Weekly Drop Since Aug As Supply Concerns Ease Bad Bets Trigger Waves Of Tumult In Short-Term Bond Markets Ether Rises To Record High, Renewing Alt-Season Expectations Asian Shares, U.S. Futures Slip After Earnings Disappointment Apple And Amazon Stock Dives Set To Erase $200 Billion In Value Coca-Cola Nears $8Bln Deal For Controlling Stake In BodyArmor The Day Ahead Asian equity markets are mixed this morning as market moods continue to fluctuate. Yesterday saw equities rise on Wall Street and in some European markets but futures prices point to falls today. Australian retail sales rose by a faster than expected 1.3% in September. In France, Q3 GDP rose by 3.0% up from a 1.3% gain in Q2. That is the first of several Eurozone GDP reports this morning. Eurozone inflation is forecast to have continued to accelerate in October. Already released data for some of the largest countries in the region point to a rise and we look for annual headline inflation to print 3.6% (from 3.4% in September), while the consensus expectation is for an even bigger rise. That is well above the European Central Bank’s 2.0% target. At yesterday’s ECB policy update President Lagarde, while admitting that the rise inflation was greater than expected, still asserted it was likely to be temporary. We do expect ‘core’ inflation to be unchanged at 1.9%, which might provide some solace to the ECB. Nevertheless, with inflation possibly set to rise further before its next policy meeting in mid-December the Governing Council’s unity in maintaining a ‘dovish’ policy stance seems set to be tested. The first estimate for Q3 GDP growth in the Eurozone is expected to show quarterly growth of 2.0%, which would be little different to the rate seen in Q2. That would mean that the Eurozone grew more quickly than the US last quarter. Nevertheless, recent reports suggest that supply issues are also constraining output in the Eurozone, so the outlook for growth is uncertain. In the UK, Bank of England money supply and credit data for September may provide some insight into recent spending trends. Mortgage approvals and lending data may show whether housing market activity has slowed as the temporary cut in stamp duty has been removed. The September US consumer spending numbers that will be released today were included in yesterday’s GDP report. Expenditure clearly slowed in Q3 compared to the first half of the year but there seem to be some tentative signs that it was picking up again to the end of the quarter. The report will also contain the consumer expenditure deflator, which is the Federal Reserve’s preferred inflation measure. It is likely to show a further rise in inflation in September. Government bond markets remain volatile. Shorter-dated yields in many markets continue to firm as markets price in the possibility of tighter monetary policy. Longer-dated yields have retraced some of the falls seen earlier in the week but are generally still below their levels of last Friday. In currency markets both the euro and sterling rose against the US dollar yesterday. The euro moved up in afternoon trading despite comments from ECB President Lagarde that seemed intended to reassure that Eurozone monetary policy would remain very stimulative.G10 FX Options Expiries for 10AM New York Cut(Hedging effect can often draw spot toward strikes pre expiry if nearby (P) Puts (C) Calls )USDJPY - 115.00 730m. 114.60/70 1.46bn (C). 113.90/114.00 1.02bn (922m C). 113.70/80 816m. 113.00 688m. 112.50 590m. 111.00 851m.- EURUSD - 1.1820/30 434m. 1.1690/1.1700 803m. 1.1670/80 503m. 1.1650/60 1.53bn (758m P). 1.1630/40 922m. 1.1610/20 737m. 1.1590/1.1600 1.50bn (1.35bn P). 1.1570/80 435m. 1.1500/10 756m.- NZDUSD - 0.7210 707m.- USDCAD - 1.2450 684m. 1.2400/10 708m. 1.2370/80 677m. 1.2300/10 1.33bn (P). 1.2270/80 882m.- EURGBP - 0.8500 446m.- EURCHF - 1.0700 930m.- EURNOK - 10.02 420m. 40.00 420m. 9.88 423m.- USDCNH - 6.47 412m.Technical & Trade ViewsEURUSD Bias: Bearish below 1.17 Bullish above EUR/USD backs off after trade to 1.1692 o/n EUR/USD backs off some from 1.1692 high yesterday, Asia 1.1674-90 EBS Trading quiet with whatever action in EUR focused on EUR/JPY EUR/JPY better bid but choppy, Asia 132.46-89... EUR/USD on hold below descending 55-DMA just above at 1.1700 Option expiries today provide some resistance, 1.1690-1.1700 E803 mln More below today though, total E3.7 bln from 1.1680 to 1.1600 strikes ECB Lagarde admitting inflation high trumping ECB easy policy stance? Minimal action in other EUR crosses, EUR/GBP 0.8466-70, EUR/CHF 1.0642-52 Some option expiries today - EUR/GBP 0.8500 E445 mln, /CHF 1.0700 E930 mlnGBPUSD Bias: Bearish below 1.37 Bullish above. Technicals support, but news needed to break 1.3835 Touch softer at the base of a 1.3789-1.3803 with steady flow Sterling is often volatile on late month end rebalancing flows Charts; 5, 10 & 21 day moving averages and daily momentum studies climb, 21 day Bolli bands contract - neutral setup has turned net positive 1.3695 21 DMA then 1.3672 38.2% of the September-October rise key supports Well tested 1.3831, 50% of the 2021 fall and range top major resistance 1.3670-1.3835 range should hold into next week unless the USD trends London 1.3731 low and 1.3815 NY high are initial support and resistanceUSDJPY Bias: Bullish above 112.50 Bearish below USD/JPY off o/n lows, JPY crosses better bid at month end JPY sales dominate Tokyo action at month-end, USD/JPY up some, crosses bid USD/JPY bounces from 113.26 spike low yesterday, Asia 113.40 to 113.71 EBS Japanese importers good buyers into Tokyo fix, action choppy since Resistance/offers from @113.75, $1.8 bln option expiries today 113.75-114.00 Expiries today below too but smaller - 113.00 $674 mln, 113.50 $387 mln US yields steady above recent lows, Treasury 10s @1.579%, NY low Wed 1.519% Risk move mixed in Asia, Nikkei choppy, up after weak start, -0.1% @28,792 EUR/JPY buoyant in choppy trade, better bid, Asia 132.46-89 GBP/JPY and AUD/JPY better bid too, 156.32-95 and 85.29-77AUDUSD Bias: Bearish below 0.75 Bullish above Resistance vulnerable as yields surge; RBA roils bonds AUD/USD poised to break 0.7557-59 resistance on early RBA rate hike bets Supported by surging bond yields on lack of RBA yield curve control Bond yield surges to 0.75% vs 0.1% target as traders capitulate... All eyes on Nov.3 RBA policy meeting as speculation grows YCC may be dropped Australia Sept retail sales rebound 1.3% as lockdowns ease... Daily close above 0.7557-59 opens 0.7599 July high; spt 0.7525-30, 0.7500-05

from Tickmill Expert Blog - Forex Traders Blog https://www.tickmill.com/blog/daily-market-outlook-october-29-2021"
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