Another "exotic" of the international currency market is the US Dollar vs Polish Zloty pair. The instrument does not stand out with any special advantages, therefore it will mainly be attractive to Polish traders and investors, while for the majority of other Forex participants, USD/PLN is not of particular interest, since it does not stand out either with a higher yield or a lower spread value.In addition, Poland's intention to completely switch to the euro does not favor the popularization of this instrument.USD PLN forecast for todayAs for most other exotic pairs with a small trading volume in general, USD/PLN is characterized by such features as: unpredictability, difficulty in making a forecast, high volatility and large spreads due to low liquidity. Zloty is a specific currency and is not widespread in the foreign exchange market.To analyze the exchange rate, it is necessary to pay attention not only to the actions of the Polish leadership, but also to monitor pan-European events (of course, we are talking about long-term dynamics on timeframes from H1 and more).Due to its specifics, the pair is more exposed to fundamental factors, which must be taken into account when compiling analytics, and there will be a lot to analyze, since this tool is very rare, and it is not worth hoping for a sufficient amount of high-quality analytics from brokers and freely available on the network.The way out of this situation can be thematic forums where ordinary traders constantly publish their thoughts on the further movement of currency pairs, although relevant and useful information can be found in Polish and English.Read more: GBP/USD exchange rate (Online Chart), forecast for todayUSD/PLN exchange rate chart (online) on the stock exchange with indicatorsLooking at the chart of the Zloty-Dollar pair, it is clearly visible that, like most other exotic currency pairs, this one is highly volatile and can pass hundreds of points in both directions per day.General characteristicsThe display of the US Dollar to the Polish Zloty in most trading platforms and on websites with streaming charts is carried out up to four characters after the separator, for example, at the moment it is 4.0799. Some terminals (Meta Trader5) output a value of up to five characters after the separator (4.07943).USD/PLN is a direct quoted currency pair, considered exotic.It is most active during the European trading session, when local exchanges are open in Poland.In terms of volatility on the days of the week, there are no special differences from other "exotics": Monday is traditionally the quietest trading day, but by the next day the pair is swinging at full strength and, practically, does not slow down its activity.Although the USDPLN currency pair is exotic, this does not mean that it will be more difficult to earn on it or the profit will be less.Read more: GBP/PLN: quotes, signals and forecasts for today, chartFactors influencing USD/PLN and what the exchange rate depends onPoland is a former socialist state of the Eastern Bloc, which joined the EU after democratic reforms in 2004 and is still a member of it. The country's economy has undergone major changes over the past decades. Today , its structure by sector is as follows:Services and trade – 64.3% (hotel and restaurant business, insurance, legal services);Mining and manufacturing industry, as well as industrial production – 31.2% (metallurgical, chemical, coal, light);Agriculture – 4.5% (pig farming, fruit gardening, crop production).Poland's main trading partners are other EU countries (Germany, Great Britain, etc.). The main export goods are machine-building, shipbuilding, chemical products, textiles, agricultural products.Although Poland has been a member of the European Union for more than 10 years, it cannot fully switch to the euro yet due to non-compliance with some economic requirements for joining the pan-European currency system (too large budget deficit and instability of the Zloty).However, Poland is doing everything to completely abandon the national currency as soon as possible and switch to the euro, in which case the USD PLN pair will simply cease to exist.The American economy, as much more developed in comparison with the Polish one, is characterized by a significantly greater shift of the vector towards the service sector, which is about 80%. The share of industry accounts for almost half as much of GDP as in Poland (about 19.2%). Agriculture in the United States provides only 1.5% of income.Read more: USD/DKK: exchange rate, online chart, signals & forecasts for todayToday, the exchange rate of the Polish zloty to the dollar is very strongly correlated withUSD/NOK – 97.6%,USD/CHF – 97.1%, USD/SEK – 94.8%, USD/SGD – 94.6%, USD/JPY – 93.8%, USD/THB – 93.2%, USD/CZK – 92.4%,USD/HUF – 91.6%. The inverse correlation of -95.7% for the pair with NZD/USD, as well as EUR/USD – -92.3%, AUD/USD – -91.2%, XPT/USD – -91%. Quite high is the inverse correspondence with the chart of the price of gold (XAU/USD) – up to -89.6% and silver (XAG/USD) – about -85.5%.All the data given relate to the D1 timeframe (that is, to the daily one), on smaller segments the correlation of this pair with others begins to fall and already on H4 USD/PLN does not correspond to any of them by more than 77-78%, and with a decrease in the interval this figure falls even more (on H1 it already falls short of 70%). The Dollar-Zloty pair has a strong correlation at the level of 80-70% with a huge number of different instruments, lists and graphs of which can be easily found on the Internet.For a clear and correct analysis of the pair with the Polish zloty, you need to take into account many factors from various sources, mainly:economic indicators (Poland, EU, USA);trade balances (of both countries and the EU);the situation on the market of brown coal, ferrous and non-ferrous (lead, copper) metals and world commodity markets in general;central Bank rates of both countries;labor market (USA, Poland and EU in general);business activity in industry (Manufacturing PMI index).Due to not only economic, but also its national specifics, Poland practically did not suffer from the pan-European migration crisis, which has a positive effect on tourism, but the agricultural sector was hit hard by the sanctions war with Russia. This has a negative impact not only on the dynamics of agricultural exports, but also on the labor market, increasing the unemployment rate.Read more: USD/CNH - description, characteristics, forecasts and feautures of pairFeatures of the currency pairThe complete abandonment of zloty and the transition to the euro in Poland should have happened a long time ago, but for one economic reason or another it is constantly being delayed. And, despite the fact that they kept saying that the refusal "will happen within the next 2-3 years," it never came to fruition either in 2010, 2014, or 2020, and it still continues to this ...
FOREX Fundamental analysis for EUR/USD on May 3, 2024The fight against inflation turned out to be less difficult than expected, even taking into account the OECD estimates. The organization raised its global GDP forecast for 2024 from 2.9% to 3.1% and expressed confidence in a further slowdown in inflation, which will enable Central Banks to begin a gradual easing of monetary policy. The OECD highlighted the strength of the American economy, which is ahead of the European one. Nevertheless, the EURUSD is strengthening ahead of an important report on the US labor marketAccording to the OECD comments, "less hard" means fewer job losses. Interestingly, Jerome Powell also drew attention to the labor market. In his opinion, the Fed will lower the federal funds rate if the unemployment rate starts to rise rapidly. Bloomberg forecasts show that the unemployment rate in April will be 3.8%, but can the Fed know something that others don't? Could the EURUSD rally before an important event be the result of a new wave of rumors?The euro was supported not only by an increase in the forecast of global GDP from the OECD, which is good news for pro-cyclical currencies, but also by neutral comments from members of the ECB Governing Council. One of the main "pigeons", the chairman of the Bank of Greece, Yannis Stournaras, now assumes that the ECB will cut the interest rate in 2024 not four, but three times. Chief Economist Philip Lane talks about a leisurely approach, about making decisions based on observing and analyzing the dynamics of inflation. However, in his opinion, a reduction in rates is still necessary, since prolonged inactivity can negatively affect the Eurozone economy.From Philip Lane's point of view, although the Fed's actions may have an impact on the ECB's decisions, the main focus of the European Central Bank is on internal factors.Markets expect the European Central Bank to act sooner than the Fed. This will allow the US dollar to strengthen its position in forex currency trading in the next three months. However, then, according to analysts' forecasts, by the end of July, the EURUSD will rise to the area of 1.07, and by the end of October to the level of 1.08.Thus, differences in economic growth between the US and the Eurozone, as well as differences in the timing and speed of monetary expansion of the Fed and the ECB, continue to work on the side of the EURUSD bears. However, alarming signals have already been received about the slowdown in the American economy in the first quarter. Now, dollar supporters are anxiously awaiting the April report on the US labor market.In the previous few months, the employment rate looked too strong. Forecasts by Bloomberg economists suggest a decrease in new jobs from +303 thousand to +242 thousand in April, but even this figure will remain significantly higher than the average before the pandemic. If the actual data turns out to be within the forecasts or slightly better, this may be a reason to sell EURUSD in the direction of 1.064 and 1.06. On the contrary, disappointing statistics will be a strong argument in favor of buying a ...
FOREX Fundamental analysis for EUR/USD on May 2, 2024Jerome Powell failed to create panic in forex currency trading. And it is unlikely that he aspired to it. For the S&P 500 and EURUSD, the Fed chairman's speech was a positive factor, as it did not present any surprises. However, the bad thing is that the bar for lowering the federal funds rate remains high, although not as high as for raising it. The Federal Reserve intends to act based on new data, which forces investors to pay great attention to the April statistics on the American labor market.Market participants breathed a sigh of relief when Jerome Powell stated that he saw no reason to resume the cycle of monetary restriction. The S&P 500 and EURUSD immediately went up, and US Treasury yields declined. This is good news for risky assets, but not for the dollar. Raising rates requires convincing evidence that current policies are failing to contain inflation.The American economy is not particularly stressed by high rates yet. However, financial conditions depend quite heavily on inflation data, which is of concern to the Fed. According to Jerome Powell, the Central Bank has not finished its work yet, but high PCE figures are already in the past.Initially, the reaction of the markets to the results of the FOMC meeting was a relief. The market expected the Fed to take a tougher stance. However, Jerome Powell seems to think that the current acceleration in inflation is temporary. He cannot say exactly when the federal funds rate will be lowered, although in the futures market the probability of the beginning of a cycle of monetary expansion in September exceeded 50%. This gave additional support to EURUSD.The Fed, backed by a strong economy, can keep rates at a high plateau for a long time, while other Central banks are ready to reduce them. Of the 56 Bloomberg regulators monitored, 5 cut rates in April. The ECB is planning a reduction in June, and later the Bank of England. This creates a solid foundation for the US dollar. However, the future fate of the greenback will depend on macroeconomic data.In this context, the statistics on employment in the United States will give an important clue. Forecasts by Bloomberg experts suggest that employment will grow by 243 thousand in April, which is a very good indicator. Unemployment is likely to remain at 3.8%. Interestingly, according to Jerome Powell, the Fed is ready to cut rates with a significant increase in unemployment. This underscores the importance of labor market statistics for the Fed, as they help determine the prospects for inflation and the economy.Upcoming statistics on the US labor market may cause the EURUSD to slow down in the range of 1.07-1.072. We do not practice forex trading based on news and will remain outside the market.EUR/USD Technical analysis for EUR/USDOn Wednesday, EUR/USD adjusted upwards and reached resistance 1.0741 - 1.0733. Nevertheless, the pair maintains a short-term downtrend. Near zone, we will consider entering short positions with a target at yesterday's minimum. If the pair consolidates below the extreme, then we expect the downward trend to fall towards the 1.0561 - 1.0544 zone.The trend boundary is the 1.0750 level. If EUR/USD breaks through this level and gains a foothold higher, then in the short term, the trend direction will change to an upward one. In this case, we will look for an entry into purchases with a target at the upper boundary of the 1.0878 - 1.0853 ...
EUR/USD: eurozone reported an increase in GDP for Q1In early trading, the EUR/USD exchange rate is experiencing an adjustment, being at the level of 1.0655, although economic statistics from the European Union show positive trends.On the eve of the meeting, many EU states presented results on gross domestic product (GDP) for the first quarter. France showed an improvement of 0.2%, reaching 1.1% year-on-year, which is higher than the previous 0.8%. Spain recorded a 0.7% quarterly GDP growth and an increase from 2.1% to 2.4% per annum, while in Italy the quarterly growth was 0.3%, although the annual rate decreased from 0.7% to 0.6%. The German economy grew by 0.2% compared to the previous 0.5% decline, but the annual rate remained negative at -0.2%. As a result, eurozone GDP improved from -0.1% to 0.3% quarterly and from 0.1% to 0.4% per annum. These data may contribute to the decision of the European Central Bank to lower interest rates. In this context, the head of the Dutch Central Bank, Claes Noth, stressed the continuation of the disinflation process, making the upcoming rate cut in June likely, but called for caution in the further steps of the regulator.Resistance levels: 1.0710, 1.0810.Support levels: 1.0620, 1.0500.GBP/USD: UK Mortgage Loan record in 18 monthsThe GBP/USD exchange rate is at 1.2470 and continues to decline amid unfavorable economic data from the UK.April figures from Nationwide Building Society showed a decrease in the housing price index by 0.4% for the month, which is worse than the predicted 0.2% and the previous value of -0.2%. The annual index also fell to 0.6%, against the expected 1.2% and the previous 1.6%. This trend contributes to an overall slowdown in inflation, which now stands at 3.2% compared to the previous figure of 3.4%. This gives the Bank of England the opportunity to reduce interest rates more actively, ahead of market expectations. In addition, in March, the number of approved mortgage loans reached 61.33 thousand, updating an 18-month record. The growth in consumer lending amounted to 1.577 million pounds compared with 1.429 million pounds a month earlier, and net borrowing by individuals increased to 1,800 million pounds against the projected 1,700 million.Resistance levels: 1.2525, 1.2697, 1.2875.Support levels: 1.2322, 1.2058.USD/JPY: exchange rate forms a global wave of appreciationThe USD/JPY pair fluctuates horizontally near the 157.82 mark, while the yen continues its decline, reaching a new peak of 160.00 on Monday, followed by a sharp rise in the currency. A significant correction followed after Japanese Prime Minister Fumio Kishida avoided answering questions about potential currency interventions at a press conference. Despite this, taking into account trading volumes, it can be assumed that the Bank of Japan took measures to influence the market, which should be confirmed by the report on the current balance of operations of the regulator, which will be published next week.The yen has been under pressure for a long time, not finding support in macroeconomic data: retail sales growth slowed from 4.7% to 1.2% in March, falling short of the projected 2.5%, which was the result of the increasing impact of inflation on household finances. According to a report by the Bank of Japan, prices for services continue to rise, but a significant increase in wages offered by companies may increase citizens' incomes this year and help stabilize the consumer price index at the target 2.0%. It should be noted that April showed an improvement in the index of business activity in the manufacturing sector to 49.6 points from 48.2 points, but this did not bring significant support to the yen.Support levels: 157.00, 154.50.Resistance levels: 158.30, 160.20.Oil market analysisBrent crude oil prices have stabilized at $85 per barrel.Economic data from China are supporting oil prices: in the first quarter, the country increased oil imports by 0.7% compared to the same period last year, reaching 137.36 million tons. At the same time, oil production in China increased by 2.3% to 53.48 million tons, refuting assumptions about a significant reduction in energy demand from the Chinese economy at the beginning of the year, which had a positive impact on market prices.However, the current local trend is under pressure due to the growth of strategic hydrocarbon reserves in the United States. According to information from the American Petroleum Institute (API), oil reserves increased by 4,906 million barrels over the past week, which contradicts analysts' expectations of a reduction of 1,500 million barrels. A new report from the US Energy Information Administration (EIA) is expected, where analysts predict an adjustment of -2.300 million barrels after the previous drop of -6.368 million, raising questions against the background of API data.Resistance levels: 86.50, 89.50.Support levels: 84.70, ...
FOREX Fundamental analysis for EUR/USD on May 1, 2024An ancient Chinese proverb says: "Don't do anything, and everything will be done." This principle also applies to the Fed, which is ready to keep the federal funds rate unchanged for the sixth time in a row. However, forex currency trading requires a revival. Options show that investors are expecting the strongest S&P 500 move since May 2023. If so, then EURUSD will not remain indifferent to the decision of the Federal Reserve.The point is to change the position of the FOMC. In December, the Fed made a sharp turn, opening the door for 6-7 acts of monetary expansion. Jerome Powell prepared markets for a possible rate cut throughout the first quarter, despite the strengthening economy. However, in April, his rhetoric changed. He said that the latest data did not confirm a decrease in inflation to the target level of 2%, and the fight against it would take longer than the regulator expected.Most likely, at a press conference on May 1, the chairman of the Federal Reserve will confirm his opinion. But why are the markets so tense? It's all about changing the Fed's views. Investors are not sure whether the Central Bank will stick to the previous mantra of reducing inflation or change its mind and signal that the PCE is approaching 3%. In the first case, there is hope for a reduction in federal funds rates at 1-2 FOMC meetings in 2024, which will help EURUSD. In the second case, we can expect rates to remain at 5.5% with risks of resuming the cycle of monetary restriction. Such a scenario would be "bearish" for both the S&P 500 and EURUSD.After an unexpected acceleration in labor costs from 0.9% to 1.2% in the first quarter, the stock market was under pressure, which was reflected in EURUSD through currency correlation. The S&P 500 closed April with a 4.2% drop, supporting the US dollar.Even despite higher economic growth in the Eurozone and a not particularly rapid slowdown in core inflation, the euro is not receiving support. According to the president of the Bank of France, Francois Villaroy de Galo, the data increased the probability of a price decline to the target level of 2% and increased the chances of a June reduction in deposit rates.In short, even the Fed's inaction can scare the markets. The Fed has probably realized its mistakes, and now it can switch to hawkish rhetoric. Against this background, the risks of EURUSD decline in the direction of 1.06 and 1.05 are increasing. Therefore, we leave the previously formed shorts and prepare to increase short positions with each rise.Technical analysis for EUR/USDEUR/USD is still in a short-term downtrend. The sellers' target is the minimum from April 16. When updating this extreme, the next target is the area 2 1.0561 - 1.0544. We continue to hold short positions opened from the resistance area of 1.0739 - 1.0685.For purchases, you should wait for signs of a trend change. To do this, EUR/USD will need to break through and gain a foothold above the 1.0739 level. In this case, the upper limit of the range 1.0878 - 1.0853 will be the ...
EUR/USD: negative factors support the downtrendThe EUR/USD currency pair follows a descending channel: the middle of the month showed that the price reached the minimum level of the channel at 1.0600, followed by a correction to the middle line of the Bollinger bands at 1.0725, where the quotes are now located.A corrective increase does not change the overall fundamental mood of the development of events, contributing to the support of a long-term downward trend. The market anticipates a difference in the approaches of the European Central Bank (ECB) and the US Federal Reserve (FRS) to monetary policy, which strengthens the dollar's position against the euro. The ECB is expected to begin lowering interest rates as early as June, while the Fed will postpone these measures until at least September. Recent economic reports confirm the ECB's intentions to ease policy: the consumer price index for April maintained the level of 2.4% per annum, core inflation fell to 2.7%, falling short of the projected 2.6%. Eurozone GDP in the first quarter also showed better results than expected, confirming the economic recovery and a decrease in inflationary pressure, which may lead to a reduction in interest rates soon.Resistance levels: 1.0742, 1.0864, 1.0945.Support levels: 1.0645, 1.0559, 1.0498.GBP/USD: monetary policy strengthens the US dollarOver the past two months, the GBP/USD pair has been in a downward trend: last week was marked by the achievement of the minimum value of this channel, followed by an upward correction to the level of 1.2550. The current rise in the value of the pound is seen as only a short-term phenomenon and is unlikely to change the general vector of movement of the currency pair, as monetary policy continues to strengthen the US dollar. Experts expect that the Bank of England may begin lowering interest rates as early as June or August, despite the unexpected increase in inflation in March to 3.2%, against the projected 3.1%. At the same time, the US Federal Reserve may postpone easing its policy until the autumn. In the worst-case scenario, given the rise in inflation, the American financial regulator may not even reduce the cost of borrowing this year or decide to raise rates.In March, 61.33 thousand mortgages were approved in the UK, which was a record for the last 18 months. The volume of consumer lending increased to 1,577 million pounds compared with 1,429 million pounds a month earlier, and net borrowing by individuals increased to 1,800 million pounds, exceeding forecasts by 100,000 pounds. Despite these data confirming the recovery of the construction sector, the British currency did not receive support due to the cautious position of traders before the upcoming meeting of the US Federal Reserve. It is expected that if the US regulator keeps interest rates unchanged, confirming the postponement of monetary policy adjustments until the autumn, the GBP/USD pair may experience additional pressure.Resistance levels: 1.2573, 1.2695, 1.2817.Support levels: 1.2451, 1.2329, 1.2207, 1.2085.USD/CHF: decline of important Swiss economic indicators in AprilThe USD/CHF currency pair is hovering around 0.9126, intending to test resistance at 0.9142 due to the weakening of the Swiss franc against the background of disappointing economic data.Today's report by the Swiss Economic Institute KOF, covering 12 key indicators, including consumer confidence, manufacturing, new orders and the real estate market, pointed to the economic outlook for the next six months. The indicator value for April was 101.8, being lower than the expected 102.1 points, while the previous estimate was adjusted from 101.5 to 101.4 points. Despite this, the nominal wages index increased by 1.7% in 2023, reaching 102.4 points compared to last year. In the context of 2.1% inflation, real wages decreased by 0.4%, and the salary index fell to 96.9 points, which is below the stability threshold of 100 points. In June, the regulator is expected to keep the interest rate at 1.50%, which in the long term may weaken the national currency.Resistance levels: 0.9142, 0.9230, 0.9330.Support levels: 0.9015, 0.8878.NZD/USD: the exchange rate falls to 0.5928 following negative data from New ZealandFollowing disappointing economic indicators from New Zealand, the NZD/USD exchange rate is showing a decline, aiming for a reference point at 0.5928.The April business confidence index, prepared by the ANZ group from Australia and New Zealand, showed a value of 14.9 points, which is significantly lower than the expected 24.0 points and the previous result of 22.9 points. This indicates that business conditions in the country are deteriorating, causing increased sales of the New Zealand dollar and supporting the trend towards its depreciation. Despite the ongoing downward trend, the recent foreign trade report provided temporary support to the exchange rate: March exports increased to NZ$6.50 billion compared to NZ$5.79 billion a month earlier, while import growth stopped at NZ$5.91 billion. This made it possible to achieve a trade surplus again, which amounted to NZ$ 588.0 million.Resistance levels: 0.5981, 0.6005, 0.6069.Support levels: 0.5928, ...
FOREX Fundamental analysis for EUR/USD on April 30, 2024Anyone who knows about a possible threat can take timely measures to protect themselves. The rise in inflation in the United States in the first quarter was a kind of warning for other Central Banks. Although the United States economy seemed much stronger than all the others, this does not mean that high prices cannot return to other regions, including the Eurozone with its weak economy. This fact makes the ECB cautious, especially ahead of the publication of data on the European consumer price Index (CPI), which leads to a lull in EURUSD trading.ECB Vice President Luis de Guindos talks about two-way risks. On the one hand, the strengthening of the labor market creates pressure on wages, which, with rising energy prices, can cause an inflationary jump. On the other hand, high interest rates can negatively affect demand, especially if the global economy encounters unexpected obstacles.Recent Eurozone consumer price data only strengthens the case for the ECB's unhurried action. For example, in Spain, the CPI index accelerated for the second month in a row, and in Germany, the index rose from 2.3% to 2.4% in April. Inflation in the Euroblock is projected to remain around 2.4%, although core inflation will decrease from 2.9% to 2.7%.However, if in Europe the interest rate cut in June is already a done deal, then in the United States the situation is different. According to Citi, if you ignore the rhetoric of the Fed members, and judge only by the data, then the federal funds rate should not be reduced, but increased. The probability of such a scenario in early 2025 is estimated by derivatives at 22%. The probability of maintaining the interest rate at 5.5% in 2024 has increased from 20% to 31%.FOMC forecasts of three acts of monetary expansion have sunk into the past. Investors are now counting on two declines. Fed Chairman Jerome Powell is expected to repeat recent rhetoric about the need to keep rates at a high plateau for a longer time.At the same time, despite the fluctuation of market opinions regarding the monetary policy of the Federal Reserve, stocks continue to grow, which helps to keep the EURUSD from falling significantly. There have even been thoughts on Forex that if the Central Bank had cut rates 6-7 times, as expected at the beginning of the year, the economy would have been in recession. But thanks to this, everything goes on as usual, and the S&P 500 continues to grow.Market participants are eagerly awaiting statistics on European inflation, the Fed meeting and the report on the US labor market. Although the acceleration of the consumer price index in the Eurozone to 2.5% and above may be a catalyst for the growth of EURUSD, I would advise you to be careful with purchases. The ECB needs more time and information to change its policy course. Therefore, my forex trading strategy remains unchanged: selling euros when rising to $1.08 or when falling below $1.07.Technical analysis for EUR/USDEUR/USD retreats from the resistance 1.0739 - 1.0727. If the decline continues, the pair will be able to break through and gain a foothold below the 1.0685 level. In this case, the asset is likely to continue to decline with a target at the minimum level of April 16. When updating the extremum, the next target becomes target zone 2 in the range 1.0561 - 1.0544.For purchases, a change in the trend direction is necessary, the first sign of which will be a breakthrough and consolidation of the pair above the resistance of 1.0739. In this case, the upper limit of the 1.0878 - 1.0853 area becomes the target of ...
FOREX Fundamental analysis for EUR/USD on April 29, 2024No matter how much external factors drown the euro, the single currency still pops to the surface like a float. Logically, the quarterly PCE data in the GDP report and the March personal consumption expenditure index should have moderated the strength of EURUSD buyers. However, both times they revived after a seemingly decisive collapse. Yes, the US stock indexes helped the euro through currency correlation, but the main positive is the idea that the ECB may be less aggressive than previously assumed. If this is the case, then data on European inflation may stir up forex currency trading more than the Fed meeting or employment statistics in the United States.Inflation in the United States and the Eurozone are different phenomena, and their growth should be dealt with in different ways. As Christine Lagarde rightly noted, the ECB is independent of the Federal Reserve, and the approaches of Central Banks to solving the same issue may differ. Indeed, price dynamics in the New and Old World have their own characteristics. In the United States, this is a story of massive fiscal stimulus and bloated budget deficits. In the Eurozone, the exchange rate suffered from a sharp rise in energy prices after Russia's invasion of Ukraine. Unsurprisingly, the euro is sensitive to oil prices, and rumors of a possible truce between Israel and Hamas, as well as falling Brent prices, allowed EURUSD to partially recover from the blow caused by the release of PCE in the United States.And although the members of the ECB's Governing Council talk about the regulator's own mission, the markets overestimate the trajectory of the deposit rate, focusing on the United States. If earlier they predicted a decrease in the cost of loans in 2024 by 88 basis points, by the end of April this figure had decreased to 70 basis points. At the beginning of the year, it was 163 basis points. Inflation in the Eurozone, unlike in the United States, continues to slow down. Interestingly, derivatives also reduced the forecast for the Bank of England from 56 basis points to 44 bp, which confirms the dependence of other regulators on the Fed.Despite the fact that Bloomberg expects Eurozone consumer prices to rise by the same 2.4% year-on-year in April as in March, inflation may actually accelerate. According to the World Bank, the commodity market index will decrease by 3% in 2024 and by 4% in 2025, but will remain 38% above the average level of 2015-2019. This will keep inflation high and prevent central banks from cutting rates as quickly as they would like. everything will suffer from this.Support from US stock indexes, a decrease in escalation in the Middle East and the prerequisites for a slower easing of the ECB's monetary policy do not allow the euro to sink. EURUSD is expecting an extremely volatile week, but we still prefer selling when the pair rises towards 1.08 or forming short positions when the price returns below the support of 1.07.Technical analysis for EUR/USDEUR/USD is testing the resistance area of 1.0739 - 1.0685. In the short term, the trend remains "bearish", so we are looking for entry into short positions with the main goal in the area of the minimum for April 16. To start selling, you should wait for the formation of the appropriate signals.If, nevertheless, the resistance of 1.0739 is broken by buyers, and the American session closes higher, then the trend direction will change to an upward one. In this case, starting from Tuesday, we will look for an entry into purchases with a target within 1.0878 - ...
EUR/USD: American business did not meet analysts' expectationsIn the current trading session, the EUR/USD pair is showing growth, moving to the level of 1.0700 and updating the highs since April 12 thanks to the released macroeconomic statistics.The values of the indices of business activity in the manufacturing sector in France and Germany for April showed 44.9 and 42.2 points, having stabilized relative to the previous month. In the service sector in France, the index increased from 47.7 to 50.5 points, and in Germany — from 50.1 to 53.3 points. The entire region showed a decrease in manufacturing activity from 46.1 to 45.6 points, while in the services sector the index rose from 51.5 to 52.9 points, which contributed to the growth of the composite index from 50.3 to 51.4 points. Today will bring a speech by the President of the German Federal Bank, Joachim Nagel, in which the forecasts of economic development and inflation are expected to be clarified.Resistance levels: 1.0730, 1.0800.Support levels: 1.0670, 1.0600.NZD/USD: currency pair shows a short-term uptrendThe NZD/USD pair is seeing a slight upward momentum, aiming to exceed the recent peaks of mid-April: the exchange rate is approaching 0.5950, reflecting an increase when traders analyze the latest New Zealand trade data. March reports showed an increase in exports from 5.79 billion to 6.5 billion dollars and a decrease in imports from 6.1 billion to 5.91 billion, reducing the trade deficit from 12.06 billion to 9.87 billion dollars, and allowing the trade balance to reach a surplus of 0.588 billion on a monthly basis.At the same time, the US currency came under pressure after the publication of business activity indices for April: the S&P Global manufacturing index fell from 51.9 to 49.9 points, which is worse than expectations for growth to 52.0, and the services index fell from 51.7 to 50.9 points, against the forecast of 52.0 points.Resistance levels: 0.5950, 0.5975, 0.6000, 0.6030.Support levels: 0.5920, 0.5885, 0.5858, 0.5830.Analysis for GoldThe price of gold showed an uptrend, reaching the level of 2325.0, but now it is experiencing a correction, indicating a decline in the activity of traders focusing on short-term operations.Recent statistics from the United States, presented this week, may delay the start of the interest rate cut cycle until the fall, given that the main indicators for the Federal Reserve remain the real estate and labor market sectors. The March report showed a decrease in the number of building permits to 1.467 million, which is the lowest level since last fall and indicates the untimely reduction of interest rates in the near future. According to the CME FedWatch Tool, the probability of monetary policy easing at the Fed meeting on May 1 is only 5.2%, and at the meetings on June 12 and July 31 — 14.8% and 37.9%, respectively. In this situation, investors who expected to profit from the strengthening of gold came to the conclusion that at the moment a correction is more likely than a further strengthening of prices.Resistance levels: 2350.0, 2410.0.Support levels: 2290.0, 2220.0.Oil market analysisIn the Asian trading session, the prices of WTI Crude Oil demonstrate stability, holding near the level of 83.30 dollars per barrel. This is happening against the background of the publication of April data on business activity in key sectors of the US economy, which turned out to be below analysts' expectations: the index in the manufacturing sector from S&P Global fell to 49.9 points, and in services fell to 50.9 points.It is expected that later today, at 14:30 GMT, new data on orders for durable goods in the United States for March will be announced, which may affect investment sentiment. It is predicted that the indicator for capital goods will decrease to 0.3%, while the total volume of orders excluding the defense sector, on the contrary, will increase to 2.5%. In addition, at 16:30, data from the US Energy Information Administration on oil reserves for the past week will be published, which are tentatively estimated to decrease by 1.7 million barrels.Attention should also be paid to the recent report of the US Commodity Futures Trading Commission, which showed a decrease in net speculative positions on WTI oil to 290.5 thousand. The reporting data indicate the restructuring of investors' portfolios, which may signal the anticipation of changes in the market. Thus, the balance of positions among producers and traders showed an active movement both to buy and to sell, which foreshadows possible fluctuations in oil prices in the near future.Resistance levels: 84.00, 84.75, 85.50, 86.00.Support levels: 83.00, 82.00, 81.00, ...
ECB Council member Pablo Hernandez de Cos believes that the EU economy will not reach the pre-pandemic level until the end of the second half of 2023.The governor of the Spanish central bank has joined the chorus of ECB policymakers calling for the first rate hike in more than a decade to curb the highest inflation rate since the creation of the euro and prevent price increases from taking hold.The ECB is lagging behind global competitors in raising borrowing costs and is even still pouring money into the financial system through its asset purchase program, a legacy of a decade of fighting too low inflation.Inflation in the eurozone reached a record 7.5% in April, and was well above the ECB's 2% target. Now the ECB's key rate is 0%, 0.25% on margin loans, and minus 0.5% on deposits.The official also believes that a gradual increase in rates should be expected, especially if the medium-term inflation forecast remains at the current target level.According to de Cos, the completion of the bond purchase program should be completed at the beginning of the 3rd quarter, and soon after that the first interest rate increase will follow. The gradual abolition of extraordinary monetary incentives is adequate in the current ...
The year 2022 on world markets will largely be determined by the tightening of monetary policy in the United States, and the first week of the new year confirmed this. The minutes of the Fed's December meeting published last week showed a significant tightening of the position of the regulator's representatives – Fed members believe that the rate can be raised as early as March, and also see a faster reduction in the balance sheet as appropriate. Representatives of the regulator believe that the current economic conditions are already in many ways conducive to tightening the labor market, some even noted the recovery of the labor market already sufficient for such actions, although the majority still expects further improvement in the labor situation. Against this background, it is worth noting the publication of December labor data in the United States, which came out ambiguous. On the one hand, employment in December increased by only 200 thousand. The Bloomberg consensus forecast assumed an employment growth of 450 thousand, and the actual growth rate of the indicator was the lowest since the beginning of 2021. Nevertheless, in many respects such weak employment growth is explained by seasonal adjustment, and the unemployment rate in December fell more than expected. Thus, the indicator has updated the next lows since the beginning of the pandemic, dropping to 3.90% against the expected 4.10%. The unemployment rate continues to approach a historic low of 3.40%, and labor statistics have further increased fears in the market of an imminent tightening of the PREP in the United States. As a result, on Friday, the yields of ten-year US treasuries at the moment exceeded 1.80% per annum - the maximum since the beginning of the pandemic. Today they have returned to these levels again.This week, the dynamics in the market will continue to be determined by expectations for the actions of regulators - investors will follow the statements of representatives of the Fed and the ECB, as well as the publication of price data in the United States for December. Statistics published last week showed an increase in inflation in the EU to 5.00% YoY. As a result, the topics of price growth in December updated the historical maximum, while analysts expected a slight slowdown in price growth. The situation on the supply side also has high inflation in the United States. The December business activity indices indicated a slight easing of logistical problems, however, the further deterioration of the epidemiological situation again intensified disruptions in logistics chains, which does not lead to a significant slowdown in price growth. The FAO World Food Price index fell in December for the first time since July, but food inflation remains at elevated levels. Against this background, US inflation data is likely to continue to bring the Fed rate hike closer, intensifying the negative in the markets.The main event for the oil market in early 2022 was the OPEC+ meeting. However, as expected, it was decided to stick to the current plan to increase production. Nevertheless, the cartel lowered its forecasts for a surplus in the oil market, which allowed Brent crude futures to exceed the level of $80/bbl. Moreover, against the background of interruptions in the supply of black gold from Kazakhstan and Libya, quotations were close to $83/bbl. However, at the end of the week they declined from these levels, today Brent futures are growing by 0.35% and are trading around $82.05/bbl. The main negative for oil this week may be related to the potential strengthening of the dollar amid expectations of a tightening of the PREP in the United States. However, in the absence of a significant strengthening of the dollar, Brent futures may still exceed the levels of $83/bbl– - the quotes may be supported by another weekly decline in oil ...
Recently, I see that more and more traders are starting to switch from Forex to binary options. This is understandable, because it is easier to trade binary options, and profitability, of course, is also higher. In general, I myself gave up Forex in favor of binary options 6 years ago. But since the topic is so relevant now, let's figure out which is better – Forex or binary options, comparing the pros and cons of both types of earnings.Forex and binary options: a brief comparisonGet and sign up: profitabilitySo, let's start our comparison with such an important point as profitability. When trading binary options, the profit ranges from 75 to 95% of the invested investments. In Forex, the profit is unlimited. However, in order to get a high percentage of earnings on Forex, you will have to correctly predict large price fluctuations, whereas only 1 point is enough on binary options. I think there is no need to explain that binary options trading is more profitable in the long run.Read more: What are binary options?Is risk a noble cause? What is the difference between Forex and binary options?The next difference between binary options and forex is the risks themselves. Forex trading involves constant manual work with risks due to the correct placement of orders for opening and closing transactions (stop losses and take profits). On the one hand, this is convenient, since it is always possible to rearrange orders and wait for the very moment when it will be possible to make a profit or breakeven… But on the other hand, as a rule, a Forex trader needs to have an impressive deposit in order to withstand long drawdowns. In addition, the trader is constantly experiencing psychological pressure (whether he closed the deal on time, whether he placed orders correctly, etc.). It is also important to say that traders who do not have large deposits are forced to use the broker's leverage, which multiplies not only the profits received, but also, of course, losses.Binary options brokers relieve traders of psychological responsibility for placing orders. It is enough for a trader to decide on:the size of the bet (as a rule, its size ranges from $5 to $25),the end time of the transaction.Thus, all work with risks consists in trading with a minimum percentage of the deposit. So, in fact, Forex differs from binary options only by a risk management system. It is not enough for a forex trader to open a deal in the right direction, he also needs to calculate how many points the chart will pass and where to put a stop loss / take profit correctly.Read more: What is Forex in simple wordsAnalysis is the mainThe same tools are used for analysis and forecasting in both types of trading: indicators, news, volumes, price patterns, etc. It turns out that, other things being equal, it is easier to do analysis for binary options, since it is enough to correctly predict only the direction of the price. In Forex, in addition to the direction, as I wrote above, you need to determine the approximate number of points in order to correctly place orders to close transactions.Time is moneyThis point can be interpreted in two ways. For someone, it is important how much time trading takes in total, for someone this moment is not fundamental. In any case, it is clear that Forex takes much more time than binary options. After all, you need to constantly work with orders to influence the outcome of the transaction.Number of assetsThe most popular assets on binary options and Forex are currency pairs and precious metals (in particular, EUR/USD and Gold). However, if the choice is limited for a Forex trader, then a binary options trader has alternative options. This:stocks,indexes,futures,the so-called "pairs" (the ratio of shares of one company to shares of another, for example: google/apple).Thus, a larger number of potentially profitable trades will be available to you on binary options.Read more: What is a spread in trading Forex and stocksOnce again about money: commissions and spreadsActually, the difference between Forex and binary options is also the trading conditions themselves. Forex traders must necessarily pay the broker the spread from each open transaction. What is a spread? The spread is the difference between the purchase price of an asset (bid) and the sale price of an asset (ask) (roughly speaking, the same difference can be seen at any currency exchange point). At the same time, traders do not pay any commissions to the binary options broker, either from investments or profits.Lend a shoulder to a friend: leverageA very important point, in my opinion. Applies only to Forex, but nevertheless it is important to pronounce it. The minimum lot (financial contract) on Forex is $100,000. Naturally, an ordinary person cannot start trading with such amounts. In this regard, the Forex broker is ready to provide its clients with leverage. For example, with a deposit of $1,000, the broker is ready to "add" $99,000 to the trader so that he can enter the market. However, the broker will not risk his money, instead he will limit the maximum amount of losses on the account to 1% (the same $ 1000). What does this lead to? To the fact that traders often start trading large lots and quickly lose money.What to choose, forex or binary options?So, binary options or still Forex? My answer to this question will not be objective, because I made my choice a long time ago. For those who have not yet decided, I can give one piece of advice – decide for yourself which type of trading is most suitable for you. It is difficult to predict in advance which method or strategy will bring the greatest profit, but one thing I can say for sure - binary options today provide the lowest entry barriers to the world of trading, making it simple and accessible to everyone. And a large number of binary options brokers allows everyone to find the most convenient platform for themselves. By the way, some brokers have forex simulators built into the platform.Well, I suggest that all novice traders read the article about the main mistakes that beginners make in trading.Read more: Forex or Binary Options? The difference between Binary Options and ...
The foreign exchange market is better known as Forex or FX. Trading in this market has become very popular in recent years. However, this is not the case - Forex trading raises a number of questions. For example: what is the foreign exchange market? Which currency pairs are best to trade? Is currency trading risky? Some of the answers to these questions will be found in this article.What is the Forex market?The foreign exchange market is also called the Forex market or the English foreign exchange market. It is simply a market where currencies are exchanged. According to the Bank for International Settlements (BIS), the foreign exchange market is the largest market in terms of total volume, with up to USD 5 trillion traded daily. It is not a physical place, but rather an electronic network where institutions or individuals trade with each other.The left-hand currency is called the base currency and the right-hand currency is called the quote currency. The second currency indicates the value relative to 1 unit of the base currency. For instance, the formula EUR/USD = 1.4000 implies that EUR/USD trades at 1.4000, i.e., 1 Euro has a value of $1.40. The first currency is always expressed in the second currency. USD/JPY at 110.50 means that one USD is worth JPY 110.50. EUR/USDWhat are the best currency pairs to trade?The best currency pairs to trade effectively depend on your trading style. If you have a short term strategy, for example, if you like to scalp, then the major currency pairs will be most profitable for you because of the low spreads.On the other hand, for a fundamental trader, smaller currency pairs will be of interest based on long-term analysis. The most profitable currency pairs may be those involving the Australian dollar, Japanese yen or Canadian dollar.The best forex currency pairs:EUR/USD: this pair has the lowest spread and is not very volatile.GBP/USD: this pair is interesting in terms of spreads and possible gaps, but it is quite volatile.USD/JPY: this pair has low spreads and offers some interesting possibilities. GBP/USDHow to get started trading currencies online?To start trading currencies online, follow these steps:- Choose a regulated and reputable broker- Choose a broker by the quality of execution of trading instructions- Decide on the trading style that suits you best (scalping, intraday trading, swing trading - you keep your position open for several days)- Determine the appropriate leverage effect in the stock market according to your strategy and experience.- Do not invest more than you can afford to lose.- Choose an intuitive, simple and secure trading platform such as MetaTrader 4.- Try all the above steps on a demo account, before trading live.Read more: Features of intraday trading on the Forex marketGoldIs online currency trading dangerous?Like any financial investment, currency trading online is subject to risks. However, there are different methods to control these risks:- Determine the price of the currency pair at which you want to close a position if developments are unfavourable (for example, if you buy and the price falls, or if you sell and the price rises),- Determine the size of the trade so that your potential loss should not exceed 2-3% of your capital per trade,- Estimate your risk/return ratio (loss/profit) before you open the trade. By default you should have a greater potential for profit than loss, e.g. risk 50 pips, but try to make a profit of e.g. 100 pips.For proper money management and risk reduction it is advisable to start trading on a demo account and try things out on the dirt first. Such an account will allow you to trade in real market conditions, but with fictitious capital, so that you have a complete understanding of the foreign exchange market without any risk.Read more: Forex broker: how to choose a good ...
Making money from price movements is the fastest way to make a profit. You can double or triple your investment in just a few minutes. This is what many people, tired of overwork or unemployment, would like to do. And so most of these people began to wonder how to become a trader from scratch, what it takes and how promising this kind of activity is. The answers to these questions are covered in the following overview.Who is a trader?To begin with, we must try to understand who a trader is. Essentially, he is a common speculator, who buys cheaper and sells dearer. To do this, he needs to have a stock of money - in today's world, this is electronic money. Also, he needs access to the quotes and assets to be traded, all these conditions are provided by numerous brokers.The trader earns money on the difference between the buy and sell price. And it does not matter whether the price is falling or rising. Anyway, with accurate analysis, he will always be in the black.Professional skills and knowledge of the traderTo have such prospects let's consider what you need to become a trader:Firstly, one needs to have a trading terminal or access to one online;Secondly, you need to understand how to evaluate the possible rise or fall of quotes. And for this you need to have your own trading strategy;Thirdly, you need to know how to manage your money. This science is called money management;Fourthly, to become a trader from scratch you have to manage your emotions and control your behavior when analyzing or opening a deal;Fifthly, you need to choose fundamental or technical analysis.Read more: The main components of a Trading StrategyBut these are not all the conditions. Although they are easy to follow, you will have to develop or strengthen your existing skills and personal qualities. A trader must be stress-resistant, ready to process huge amounts of information, and make numerous calculations. They must also:Know how to use his calculations;be able to stop and rest on time;be disciplined in their analyses, keep notes, and not disregard trivialities.At the same time, a future trader should not be complacent. This work is constant professional growth. Experienced traders never stop at their achievements. They have to improve their trading systems and find brokers with more favorable conditions. And in recent years, such traders have to master automated trading, where trading experts, expert advisors, systems, and robots are used.What else a true expert in trading should possess is the ability to choose assets for trading. There are hundreds of currency pairs available for those who want to become a Forex trader.The cryptocurrency market is gaining particular interest, especially among young traders. There are already hundreds of trading instruments with different volatility and yields.There are about the same number of commodities, stocks, options, and futures. This direction will be of interest to those who wish to become a trader in the stock market.Read more: Volatility: types, how to track and how to useClassification of tradersProfitability and speed of making profit are the main criteria in classifying traders. There are such types of currency, stock, and cryptocurrency speculators:Scalper - trades in time intervals of no more than 5-15 minutes. They can open dozens of deals during a day and always have a lot of false signals, so they take as little profit as possible from each deal;Intraday trader (intraday) - works with timeframes from 15-30 minutes to 1 hour chart. He closes all his orders before the end of the trading day;Mid-term - trades for several days. As a rule, it is executed until the next weekend. Leaves deals with positions rollover to other days; analysis is conducted on H1-H4 timeframe;A trader with a long-term outlook - opens positions only on daily, weekly, and monthly charts. Its transactions can be active from 2-3 weeks to a year.You may become a trader in any of these categories, the main thing is to follow the sequence described below.Read more: What timeframe is the best to trade onThe 6 steps of becoming a traderThere are only a few steps to become a trader - some of them are very simple, others will take some time. So - how to become a trader, step by step:Get training - on the basis of the chosen broker, on books of famous speculators, on third-party resources, professional webinars.To choose the broker with the necessary set of instruments, official registration, financial license, and obligatory registration at the international regulator.Develop your own trading strategy.Open a demo account, which you can use to test the broker's conditions, service quality, and testing your trading system.Open and deposit an objective real account.Make a trading plan.That's basically it. Now become a professional trader, start earning and take pride in your new profession. Having passed all these stages, in the near future you will see whether it is worth becoming a trader or not. The fact is that you can earn by investing in trading. But it is a separate topic for discussion.Read more: Forex broker: how to choose a good brokerAmount of profit and tips for beginnersProfit depends on the size of the trading deposit, the number of opened orders, and the number of profitable deals. The trading lot size, the amount of leverage, broker's fees - all this affects the final sum of the profit. In practice, you will have to learn how to calculate all these things.Traders with experience advise not to make mistakes. For example - do not rush headlong into trading, leaving your main work. There is no need to borrow money to replenish your deposit - only use your own, even if it is small.Do not treat this activity as a game, an extra income - it is a job like any other.And now that you know everything you need to know about this job, take the first steps in mastering the profession and become a successful trader, and earn as much as you need for full financial well-being!Read more: What is a Leverage in ...
Acquaintance with the financial market begins with the identification of participants and the exact clarification of their functions. The market assumes the presence of the main actors on it – traders. That is, a trader is a person who directly trades, the main market participant. This term can be applied to all types of markets. If we talk specifically about the financial market, then the trader here operates with assets, earning on their sale and purchase.Categories of tradersThe entire trading corps can be divided into two groups – professional traders and private traders (amateurs). Professionals are part of the staff of various funds, banks and other financial organizations. Accordingly, in the market they act on behalf of these organizations, making transactions with their assets. Simply put, these are certified financiers who go to auctions as if for work. The category of professionals also includes traders who work exclusively for themselves and operate with their own funds. Since they have no other profession, they can also be classified as professionals.The most numerous category is private amateur traders. Trading is not their main profession, and in the financial market they are engaged exclusively in additional earnings. Such traders do not have a specialized education, and they have to study independently. The financial market is attractive for the possibility of good earnings. That is why the number of amateurs exploring the market is constantly growing. The contingent of amateur traders is very mobile: someone, having failed and disappointed, leaves the market, counting on easy earnings also do not stay for a long time, but new, active and ambitious traders are constantly arriving.Trading in the financial marketIn order to make a deal on the financial market, a trader needs to give an order to a broker about the desire to sell or buy an asset. Of course, the result of such operations should be profit. In order for trading to be profitable, you need to deeply know the market processes and patterns of movement of the value of assets. Not everyone can boast of fundamental knowledge, so success does not accompany everyone. But perseverance and hard work are usually rewarded.Forex is not easy for a beginner, but the financial market has never been easy. If a trader from our days could be transferred to the stock exchange a century ago, he would also hardly be able to work right away. Firstly, he would be deprived of electronic devices and the Internet, from which you can draw the necessary information for trading, while maintaining contact with the broker. Secondly, he would be very limited in the possibilities of technical analysis. The theory of technical analysis itself did not exist at that time, and traders used separate provisions of Charles Dow, which were later systematized into a single theory.Today, the trader has all the tools to make the right decision. Prices are presented in graphic images of more than a dozen types, clearly demonstrating current and future fluctuations. The latest developments in the markets are published by many media outlets, including such reputable ones as Bloomberg or Reuters. Current currency quotes are transmitted online.The revolution in trading in financial markets has taken place in just a hundred years. Previously, a small circle of people had the opportunity to become a trader, but today the market is open to almost everyone.Read more: Five stages of becoming a traderFinancial market trading instrumentsFinancial market traders use technical and fundamental types of forecasting in their work. The technical one is presented graphically, and the fundamental one is based on economic data. By tracking the information on the terminal, based on the learned patterns, the trader predicts future quotes.The terminal is the most important tool of a trader, which is a platform for communication with a broker and an analytical tool. Modern terminals provide information on prices, various indicators and graphical tools.Modern trading is also impossible without automated trading systems, which are called robots or Expert Advisors in the professional slang of traders. Such systems trade autonomously according to the initial parameters. Such a parameter, for example, can be the volume of transactions. There is a lot of talk about the feasibility of using robots, but, in any case, no machine can be more effective than a competent trader.Another serious tool can be considered an economic calendar with announcements of economic events: speeches by economists and heads of banks, politicians, publications on economic topics, etc. So, a modern trader trades on the Internet using Internet trading platforms.Before the appearance of platforms on the Forex market, only large financial organizations participated in trading – banks, funds, etc. With the advent of the Internet, exchange trading has become accessible to ordinary users – knowledge and only a few hundred dollars are required.Trading strategyTraders have different views on the market situation – it is they who determine the trading strategy. One of the important characteristics of the strategy is the duration of transactions. According to this characteristic , several types of investors can be distinguished:long-term, making long-term transactions for several years. The analysis is based on global characteristics and indicators;short-term, making several trading transactions during the year;positional, working on a long-term strategy. Transactions last for several days with profit taking during periods of reduced activity (holidays, vacations, etc.);a day trader who makes transactions during the day (one trading session). As a rule, such traders have a small trading capital, and trading positions are realized quickly;a scalper who makes trades in a very short period (from a few seconds to 10 minutes). With a large number of operations, profitability is not ensured for every transaction. Traders working on this strategy are forced to constantly stay at the monitor and monitor suitable transactions.Read more: The main components of a Trading StrategyWhat does a currency player doFirstly, he trades various currencies. The principle of successful trading is simple – it is cheaper to buy and more expensive to sell. The trader operates with currency pairs consisting of two currencies. The most popular currency pair is EUR/USD. When buying such a pair, a trader buys euros for US dollars.The main advantage of the Forex market for traders is its liquidity. There is a constant supply and demand in Forex, and trading is conducted without interruptions five days a week. The choice of currency pairs for trading is wide: you can trade "majors" (the so-called pairs that are traded through the dollar) or "crosses" (without using the dollar).A trader should be ready to trade not only theoretically. No less important is the right psychological attitude, which is often ignored by beginners. Having familiarized themselves with a couple of strategies, they rush headlong into trading, risking losing all their money and forgetting about the two main enemies of the trader – fear and greed. Greed often kills capital, and fear does not allow it to increase.Many newcomers seek to get rich instantly by opening deals and not thinking about money management. Most often, such traders simply lose all their money. Trying to quickly increase the capital from $100 to $1,000, the trader opens transactions with a large volume, increasing the psychological burden. Mistakes appear, and money goes away. Risk management is very important for a trader. When opening a trade, a trader must accurately imagine the possible volume of not only profits, but also losses. Minimizing risks is the main task that a trader should be able to solve.Read more: How to become a trader from scratchFrom amateurs to professionalsA successful amateur of stock trading can become a professional. Professional trading has clear advantages: the trader now works only for himself, he does not need to go to work in the office, he plans his own working hours. But the main thing now is that the trader is the owner of his own capital, and only his well–being depends on his work.A professional stock market player lives by certain interests - news related to stock markets, currencies, economics, stock statistics, commodity prices. Plunging into this atmosphere, after a while the trader begins to understand this, makes decisions based on independent analysis. For a professional, there is no limit to the accumulation of information and knowledge. He is constantly improving – only this is the key to his success in the ...
According to the general opinion, the origin and functioning of monetary systems are among the most difficult to understand issues of economic theory. In this situation, it is important at the initial stage to give clear and functional definitions of the basic concepts.Types of moneyMoney is considered to be assets that perform the functions of a means of circulation, account units and savings funds. Depending on the method of issue, three types of money can be distinguished:commodity moneycredit moneyfiat money.Commodity moneyCommodity money has been known since ancient times. Their value was determined by the value of the material from which they were made. Commodity money played an important role in metal monetary systems.Credit moneyCredit money (inside money) appeared with the emergence of the first banks. They were debt obligations of banks – banknotes or deposits. Their value was secured by the assets of the issuing bank. Credit money was important in countries where there was no state monopoly on the issue of money.According to the alternative history of money, the first money is often considered to be debts on commodity loans – they were used as a unit of account. After a while, the temples (as organizations that enjoyed unconditional trust) began to recognize these debts, and they became a means of circulation. Subsequently, with the emergence of large-scale production, for the organization and launch of which large-scale investments were required, money-debts turned into a full-fledged means of accumulation.Thus, according to representatives of the alternative concept, metal coins, traditionally considered "universal equivalent" and "real money", appeared later than debts and were derivatives in relation to them. An alternative history of money can provide another explanation for the development of the monetary sphere in the past, as well as its features in the present. According to this version, banks are not "money warehouses", but buyers of debts. Recognizing debts, modern banks, like temples in ancient times, turn them into money accepted by everyone. To do this, they do not need to accumulate goods (precious metals) or other types of means of payment.The basis of the value of a loan is the creditworthiness of its counterparty, that is, the confidence that the counterparty will repay its debt on time. This confidence was provided by organizations that, thanks to their reputation, massively accepted (bought) debts: in ancient times – temples, later – banks. The value of the accepted debts was ultimately given by the state:in the law, these funds were declared a national monetary unit, they were guaranteed state support;they were taken into account for the payment of taxes;citizens were obliged to repay their debts to each other with them.Fiat moneyFiat money or fiat currencies (outside money, from Lat. fiat - decree, instruction) were issued by the state in the form of treasury notes. Their value was based on trust in the state. With the emergence of the state monopoly on the issue of credit money created by banks, they were equalized in rights with fiat money. Therefore, all modern money can be considered fiat.Their value is based on trust in the monetary system as a whole. The state, represented by the central bank, not only issues cash, but also maintains confidence in non-cash money that banks create. In the future, we will use the term "fiat money" in relation to all modern money that is not provided with goods or other material values.Modern fiat money can be cash or non-cash. Cash and non-cash money can be exchanged in a ratio of 1:1. With the development of financial technologies, the popularity of cash is decreasing. The basis of the money supply in modern fiat money systems is non-cash money.From time to time, the attention of researchers and the general public is attracted by assets that can perform certain functions of money. Since the mid-2010s, cryptocurrencies issued by the private sector have been claiming this. Cryptocurrencies have separate properties of commodity and credit money.Digital currencies of central banks (central bank digital currencies) is one of the widely discussed projects in the field of monetary circulation in the early 2020s. If they fully perform the functions of money, by their nature they will belong to fiat money.Issue of fiat moneyIn metal monetary systems, the size of the issue is limited by bank reserves (liquid assets of banks). In fiat systems, such restrictions disappear. But it does not follow from this that the issue of fiat money is not limited by anything.Today, the credit activity of commercial banks is influenced by:interest rate policy of central banks;regulatory standards and measures aimed at achieving financial stability;strict limitations of modern banking risk management.Why did states switch to fiat moneyThe gold standard once played a certain positive role, contributing to the development of world trade and industry. At the same time, he had serious shortcomings:the flow of gold between countries, accelerated by higher rates, led to periodic crises;the more countries switched to the gold standard, the more gold was lacking;under the conditions of the gold standard, the central bank could not adequately perform the functions of a lender of last resort.The emergence of fiat money systems solved the problem of the lack of "money metal". But from the very beginning there were risks:for price stability - historically, the state has a reputation for "living beyond its means";for financial stability, fiat emission can lead to bubbles, and due to the growing interdependence of national economies, crises are becoming more "contagious".Maintaining financial stability for 2021 is still an unresolved ...
Scalping or scalping is a strategy that makes many demands on traders. Perhaps the most serious of them is to accept that everything you think you know about Forex trading will be wrong in this context.Forget about it. Scalping is an opportunity to quickly make money on price changes when transactions last 5-10 minutes.Avoid "political" currenciesDo you want to make money by trading a large amount of money in anticipation of some serious movement? No, scalping is earning money on small price movements. And, what is even more likely in relation to the Forex market, it is worth forgetting about searching for highly volatile pairs in the hope of getting a big profit. George Soros managed to do this in 1992, and you can try to repeat it on a smaller scale, but this will be an example of ordinary trading, not scalping.Successful scalping is based on the use of relatively insignificant price movements. And it depends on a good and thorough analysis of the relevant currencies.First, which currency pairs to choose for scalpingHighly "political" or inflation-prone currencies are not suitable in this context, because they are likely to be very volatile, and high volatility should be avoided.Read more: Volatility: types, how to track and how to useLanguage barriersIt is much better to find a currency pair that is relatively stable, so that its movement can be analyzed and predicted.The obvious candidate would be the EUR/USD exchange rate. This is the most popular currency pair in the world, for which the most transactions are made, and it has many functions that we need.But it has drawbacks.First, it may seem at first glance that these two currencies are, by and large, equivalent. Both are equally popular, issued by developed democratic states, controlled by independent central banks, but in fact they are not comparable.Read more: Causes of inflation and scientific approaches to their studyThe dollar is the currency of a successful political union, it is supported by the federal government and the national treasury, and the central bank, the Federal Reserve System, enjoys broad public support. The euro, the currency of 19 national states, is not supported by the federal government, is prone to crises, as can be seen from what happened to Greece after the 2008 financial crisis, and its management is often criticized.The second drawback is the complexity of the analysis of the European Central Bank, unlike the Fed. There are many, many variables; the position of individual members of the board of directors, the demands of the" southern", poorer countries, the position of the European Commission, which is responsible for economic affairs, and the wishes of Germany, a powerful economy of the European Union.This is compounded by various language barriers that need to be overcome when studying the statements of those who determine the behavior of the ECB.Finally, the ECB is much more autonomous than the Fed.Perhaps the USD/JPY pair may be a more suitable option? The Japanese currency, like the dollar, is the currency of a single state, and the two economies conduct extensive trade with each other. But the language barrier is even more pronounced, and the Bank of Japan is not independent, which means that it is potentially open to political interference.Read more: The European Central Bank (ECB)Communication across the AtlanticThe best candidate for scalping may be USD/GBP. The Fed and the Bank of England are independent but accountable central banks, there is no language barrier, and the legal systems of the two countries are very close.The recent dynamics of the pound against the dollar was quite high, which gives scalpers the opportunity for significant profits. The reasons for this movement include the signing of a trade agreement with the European Union and hopes for the recovery of the UK economy.To predict strong movements in the short term, traders need a thorough and constant analysis of the factors that affect the movement of currencies: economic expectations, fiscal policy and, of course, interest rates. Scalpers will be helped by the fact that both countries have the same attitude to economic management, giving priority to a strong private sector, competitive tax rates and high growth rates.Plus, the US and the UK have a long history of bilateral inter-Atlantic trade.Transactions with GBP/USD may lack the attractiveness of exotic currency pairs, but scalping is not an adventure in the Forex market, but a way to make a profit.Read more: Rich history of the Bank of ...