Thursday, 30 June 2016

Risk appetites increase after Brexit

The headlines are full of comments about the fact that, despite the outcome of the referendum, there will not be a real Brexit, and the events in Brussels are taking a serious turn. The resigning Prime Minister David Cameron said that there is no turning back, and German Chancellor Angela Merkel emphasized, that now is not the right time to indulge in wishful thinking, but to become more aware of the reality.
The market behaved not quite adequately: S&P 500 futures rushed up to the first line of the Fibonacci correction - an impressive movement of more than 50 points from the lows, which, however, was preceded by a drop of more than 130 points.
It should be noted that the dynamics of the currencies and especially the securities with fixed income was much more restrained. In Asia is talking about incentives, the head of the European Central Bank Mario Draghi yesterday announced a new approach to monetary easing.
The more of these expectations - and what is more important, the faith in them - the stronger is the upward pressure on the dollar. The more markets are worried about how the world will be going after Brexit and worried about the effectiveness of policy-making, the stronger the dollar would be.

Wednesday, 29 June 2016

Macroeconomic review for June 29

For last 24 hours oil contracts increased by 1.7%, embedding above $49 per barrel for Brent on the news of the fall of US crude stocks. According to the American Petroleum Institute, last week crude oil inventories in the US fell by 3.9 mln. barrels, which was significantly higher than market expectations. Bloomberg predicts that the US Department of Energy will report today a decline in crude oil reserves by 2.5 million barrels. Oil prices may continue their recovery, if today Energy Information Administration would report ongoing reduction of the volume of daily production in the United States.
European equity indices are growing the second consecutive day on expectations that on today's EU summit will be announced measures to support the EU economy in the event of deterioration in GDP growth due to Brexit. Today the work of the EU summit continue, but without the participation of the United Kingdom. Yesterday the head of the European Commission Jean-Claude Juncker said that the representatives of the United Kingdom are for the last time in this room. In general, it is expected that in September, when will be the new UK government elections, will launched a program for exit of the UK from the EU structure. Also, support for the European stock indices gave the positive macroeconomic statistics in Germany. Consumer sentiment index rose to 10.1 points, which was better than market expectations.

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Monday, 27 June 2016

What after Brexit? (Part 3)

The next round of races will begin in July

The next week will probably be "just the dust settler". Scattered brains will be collected in a heap. There will be a series of meetings, consultations including the EU summit.
A place of speculation will find the petition for review of the results of the referendum, but as Cameron, count him already resigned, is not "the leader of the remainers", petition's fate is uncertain.
Next week will be full of twists. It is necessary to look further to the liquidity and volatility.
Friday will be important, with the coming of July 1 - Manufacturing PMI data will come from Britain and the United States, non-farms will follow soon after.
July will be no less "hot" - to all other will join quarterly reports for the second quarter of 2016.

How Brexit differs from the Black Wednesday?

On the eve of Brexit, George Soros warned that the exit of the UK from the EU can turn into bigger losses for the pound, than in "Black Wednesday" in '92. The investor seems to be earned well, as the last time.

So, how Brexit differs from the Black Wednesday?

Most of all, by the volume of the impact.
Probably we'll observe the effect of the snowball for months or even years and nobody's capable to forecast the actual damages for the world economy.

What after Brexit? (Part 2)

The consequences for the fundament

In Moody's said that Brexit will reduce US GDP by 0.1%.
The probability of increasing the interest rates by the Fed significantly reduced: 0% in July, 25% in December. It is worth noting such subtlety - Janet Yellen on Tuesday, June 21, was very careful in her speech before Congress, which gives reason to believe - after Brexit Fed altogether may refuse further rate hikes this year.
The probability of reducing Australia's interest rate is 50%.
The Bank of England will probably go on and should further with softening of the economy: lower rates, the increase in the money supply.
Political News will dazzle, as begins the long process of negotiations between EU and Britain, which likely will start only after replacing Cameron (in October, he will be out of duty). EU zone will be under constant pressure of political and economic uncertainty in the next couple of months.
The Swiss bank will continue to intervene in the currency market.
UK labor market will fall. Key global banks have already announced a smooth transfer of the headquarters to other European countries (talking about J.P.Morgan, HSBC, Deutsche Bank).
Scotland said that their destiny is tied up with the EU for which they voted (62% of the stay in the EU) - and they threaten to prepare a new referendum on the exit from the UK. With the same mood stays also the Northern Ireland.

What does Brexit mean to for the news trade?

Reaction of the central banks will follow, which opens up additional prospects - to the trade on the news actively will connect two indicators: the interest rates and quantitative easing program.

Sunday, 26 June 2016

What after Brexit? (Part 1)

Brexit is a fact, you could already read tons of analyticss about the future, as a rule, "gloomy". I see prospects for trade on the news, that the UK opened for us, and they are countless... For breakfast let's see if Brexit looks cooler than "Black Wednesday" 92-th...

Briefly about Brexit

Results of the referendum: "Leave" - 51.9%;
Cameron, the Prime Minister resigns in October, on its own initiative.
GBP/USD dropped to 10%.
London stock market fell 8%.
FTSE 100 fell more than 500 points.
The cost of shares of the largest British bank Barclays fell 30%.
Fitch and Moody's believe: the referendum results are negative for all sectors of the British economy.
There were interventions by the Swiss Bank to weaken the franc.

Post factum

Some Britons are concerned about the lack of a clear advantage for such a serious decision and a petition for a second referendum gained more than 2,900 mln. signatures:

This number of votes, according to the legislation, requires a response not only from the government but also from the parliament, as the thresholds of 10 thousand and 100 thousand signatures respectively were instantly overcome. An interesting fact is that the majority of MPs want to see Britain in the EU. The results are not be able to return, but to find loopholes that could significantly alleviate the process is quite possible.

On June 28 will be held an extraordinary EU summit regarding the results of the referendum.

Moody's lowered the credit rating of the UK from "stable" to "negative", while the level of Aa1 remained unchanged.
Who else can get out of the EU as well as the press says about the domino effect: the Netherlands, France, Finland - are the first candidates. We can remember about Spain, Italy, the list goes on. According to polls, held in Germany, 30% of the citizens also want a referendum.

Let me remind, that a similar referendum was held last year in Greece, the vote also confirmed Grexit, but the government has ignored this fact.

The ECB suggests the presence of "hundreds of millions of euros to cover the lack of liquidity." Yes, in general all the key banks are prepared to increase liquidity injections. In turn Lagarde (IMF) confirmed the ECB and the Bank of England's readiness to support the banking system.

Wednesday, 22 June 2016

Dollar falls due to the uncertainty before the vote in Britain

On Wednesday, the dollar showed a decline against its major rivals as investors remain cautious after the publication of recent polls showing that the fight for votes is still going on in a day before the vote in the UK.
GBP/USD rose by 0.20% to 1.4684, keeping the Monday's six-month high at 1.4782.
An opinion poll showed that the campaign for the preservation of the UK's membership in the European Union has lost some support before the referendum on Thursday.
The latest survey, held by Survation showed that 45% of UK citizens prefer to stay in the EU, 44% choose go out, and 11% were undecided.
In the previous survey showed 45% of EU supporters against 42% of opponents.
Two opinion polls published on Monday, pointed to the growing number of opponents of the British exit from the EU.
The dollar lost gains obtained after Tuesday's Federal Reserve Janet Yellen said during her speech in Congress that the rates will probably be necessary to increase gradually.
She added that the Fed "is closely monitoring global economic and financial developments", adopting a cautious approach to raising interest rates.
Yellen also warned that the vote in the UK for exit the EU could have serious economic consequences.

The Big Short (2015)

While waiting for Brexit storm to pass, without having any opened positions, I've seen a spectacular movie and I want to share my impressions about it.

"The Big Short" is a wonderful semi-documentary tragicomedy about the causes of the financial crisis of 2007 and the people who cashed in on this crisis.

In 2005, the eccentric hedge fund manager Michael Berry (Christian Bale) is eyeing the US real estate market and discovers that he is on the verge of an unprecedented collapse. Since no one else notices, Barry realizes that this is a chance to earn huge money. So he invested almost all his fund money in bonds, which will be paid in the event of a market collapse. The news of this deal flies in New York, and while the majority of market participants to twist a finger at a temple, a few businessmen decide to conduct their own investigation and find out whether they also play on short.

The global crisis of 2007-2008 has brought to life an entire industry to explain what happened then in the American and world economy. Since the crisis was closely associated with the use of complex financial instruments, it could not explain the essence of few words, and the Internet and the media were filled with materials whose authors tried to explain on fingers puzzling acronyms like CDO. Someone did it better, and someone - worse, but by the time when the main wave of the crisis has subsided, all those who wanted to understand what had happened, did it.

«The Big Short» worth seeing. Not for predictable plot turns or for the sake of financial clarification, which can be found online for free, but for the sake of a powerful charge of emotion that the film authors have invested in «The Big Short». While their predecessors basically just tried to understand what had happened and put the crisis on the shelves, the creators of «The Big Short» seething resentment against all those who failed the world economy, and do not hesitate to express this rage. The film is literally bursting with righteous anger, and this anger is contagious, because it is played by bright actors (Christian Bale, Steve Carell, Brad Pitt, Ryan Gosling), filed vigorously and lucidly and convincingly justified.

I strongly recommend!

Monday, 20 June 2016

In case of Brexit - intervention by the Bank of Japan and the Bank of England

There is a high probability of intervention by the Bank of Japan and the Bank of England in case of Brexit.
Alan Ruskin - currency strategist at Deutsche Bank (DE: DBKGn), considered: "If the British referendum will lead to a drop in the dollar/yen below 100.00, the most likely scenario reaction of the Japanese financial authorities will be currency intervention. Japan will intervene under the guise of Brexit, having received in this case compelling arguments in the form of emergency and dramatic tightening of conditions which reflect the international volatility, not the internal situation. The Bank of England is also unlikely to be "waiting" if the pound against the dollar will fall below 1.30 and will continue to decline, the Bank of England will have a reason for the currency intervention and the ECB and the Fed is likely in a sign of solidarity may accede to it."
The probability of ECB intervention is low, because the eurozone is unlikely in the case of Brexit become the epicenter of the movement of assets.
And the Fed could to intervene only in the event of a significant tightening of financial conditions in the United States, which is also not expected.

Review of European financial markets for 17/06/2016

Following the trading session on Friday the major indexes in Europe showed the following results:
FTSE 100 - 6021.09, 70.61, 1.19%, DAX - 9631.36, 80.89, 0.85%, CAC 40 - 4193.83, 40.82, 0.98%.

Key stock indexes in Europe have shown plus at the end of trading session on Friday, thereby reducing the third consecutive weekly decline. Fears that the UK would go out of the EU, and the growth of the energy sector shares (after oil) were the main drivers of the day.

Stoxx Europe 600 (composite index of the largest companies in the region) has increased by 1.4%, after the election campaign for the exit of the Britain from the EU has been suspended due to the MP Joe Cox murder (Labour Party of Great Britain).

Overview of the stock. Europe
Volkswagen AG and BMW AG (DE: BMWG) have increased by about 2% and 1%, respectively, after the rise of the stock market as a whole.

Ericsson AB (a Swedish company) - capitalization has shrunk by 1.5% after it was said in Ericsson that the company have received a request from the US authorities concerning its activities. Previously, it was known that the authorities hold an investigation on suspicion of corruption.

Randgold Resources Ltd. (The company is engaged in gold mining) - shares were down 4.6%. After strong growth in the beginning of the week quotations of gold, which was an asset of refuge for a few days, started a regular correction (fixation of profits).

Friday, 17 June 2016

At a crossroads

In the middle of a profitable deal, you are ask yourself: "Do I take the profits now or leave the position to gain more profit?". Maybe there were cases when taking profits earlier was a better solution. But I'm sure there were also cases where you hit on the head that you closed the deal too early.
Why traders limit their profit prematurely? Here are two options.
The first is that simply because traders do not have a clear target for a profit. There is nothing wrong to define profit target, it helps you complete the position easier without wondering close it now or later.
The second is: traders are afraid to risk and so take less profit. Some traders would rather seize them a sense of security and take the profit earlier than risking part of unrealized profit for another win.

Thursday, 16 June 2016

Common mistakes of the new traders

Before you open a real account, it is important to be aware of the most common major mistakes that new traders do. You probably you'll do them anyway, but at least you will know that you do them, and that will help you easier to fix them.
Overconfidence. Making a living from forex trading can be both a dream and a nightmare. If you believe Trading is easy, then you are finished before you started. Trading is not easy and it's not for everyone. It's really difficult. It is hard to be constantly concentrated and disciplined. Know this before venturing and this will increase your chances of success.

Wednesday, 15 June 2016

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Monday, 13 June 2016

Forex forecast for 13 - 17 June 2016.


- The medium-term outlook - a decrease during the month to a level of 1.1000. As for its behavior in the coming week, the graphical analysis on H4 and indicators on the D1, talking about side movement with a predominance of the bearish trend and support in the area of ​​1.1210. An alternative view draws graphic analysis D1. And although it also predicts horizontal trend, the couple must first climb to a height of 1.4440, and only then drop to the 1.1210 support and then lower - to the level of 1.1135.


- With regard to GBP/USD, the graphical analysis as if aware of the upcoming referendum on the withdrawal of Great Britain from the EU. At the very least, it refuses to make any predictions on H1 and H4, D1. But the views of indicators sent the pair down, altho it's possible pair to go back to Pivot Point 1.4500. At the same time at least for initial target I point a rise to resistance 1.4400.


- The pair will continue to move along the Pivot Point 107.00. The first support at 106.50, the second - 105.50 resistance is in areas of 107.50, 107.90 and 108.70.


- The local bottom is the level 0.9600-0.9550. In the upwards the pair could reach the area of ​​0.9700 - 0.9750. As for the monthly forecast: A upward movement would lead the pair to the resistance 0.9750, then the pair again will rush down - to the lows of the beginning of May in the area of ​​0.9445.

5 main events for the next week

Next week market participants will focus attention on the outcomes of the meeting for determining the monetary policy of the Federal Reserve System, which will be held on Wednesday, amid uncertainty over the timing of the next rate hike.
Traders also expect meetings of the central banks of Japan, Switzerland and the UK, scheduled for Thursday.

1. The June Fed meeting
On Wednesday, the Fed will release a statement on monetary policy on the basis of the two-day meeting of the Committee on Open Market Operations.
As expected, the US central bank will keep interest rates unchanged, as the report on the number of people employed in May showed the smallest increase in the number of jobs since September 2010.
The Fed was also to publish its latest economic forecasts, and Fed Chairman Janet Yellen will deliver a speech at the press conference.

2. Data on inflation in the US
On Thursday at 08:30 ET The Labor Department is to publish a report on inflation in May.
The consumer price index is forecast to be up by 0.3% last month, after rising 0.4% in April, which was the largest increase in more than three years.

3. The meetings of the world's central banks
The Bank of Japan is to announce a decision on monetary policy at the end of the meeting on Thursday. In April, the Bank of Japan kept monetary policy unchanged despite the expectations of many investors who had expected the expansion incentives.
Investors do not expect any changes from the Swiss National Bank and the Bank of England, whose meetings will also be held on Thursday.

4. A report on employment in the UK
On Wednesday, the Office for National Statistics will publish its latest report on employment in the UK.
Last month, the data showed that in the three months to March the number of unemployed people decreased by 2000 while the unemployment rate remained at 5.1%.
Investors will keep track of how the uncertainty about the outcome of the referendum on Britain's membership in the European Union affect the labor market.

5. Data on inflation in the UK
On Tuesday, the Office for National Statistics will release data on consumer price inflation in May.
In April in the UK consumer prices fell 0.3%, marking the first decline in seven months, mainly due to falling prices for flights after the Easter holidays.
Last month, the Bank of England said it expects inflation to accelerate in the second half of this year.

Thursday, 9 June 2016

Dollar rises against world currencies on upbeat US data

On Thursday, the dollar rose against major currencies, rebounding from a five-week low, following the release of upbeat report on the number of applications for benefits in the US unemployment, which have raised optimism about the US economy.
Pair USD/JPY fell 0.50% to 106.45.
The US Labor Department reported that the number of people who applied for unemployment benefits for the week ending 4 June declined by a seasonally adjusted 4,000 to 264,000 from 268,000 the previous week, which was revised to 267,000.
Analysts expected an increase of 3,000 to 270,000.
The dollar weakened earlier this week, as markets revised expectations for timing of the next rate hike by the US central bank after on Friday data showed that the US economy has created just 38,000 jobs last month, which was the lowest growth in the number of employed from September 2010.
On Monday, Federal Reserve Chairman Janet Yellen said, that the US central bank does not intend to raise interest rates, while the uncertainty of the economic outlook in the United States remains.
Yellen also expects, that the US recovery will continue, but did not specify the possible timing of the next rate hike.
In December, the Fed raised interest rates for the first time in nearly ten years.
The EUR/USD fell by 0.72% to 1.1313.

Wednesday, 8 June 2016

The Australian dollar rose after the central bank meeting

The Australian dollar rose after the meeting of the Australian central bank, which left interest rates unchanged. The institution did not take changes in monetary policy, leaving the base rate unchanged at a record low of 1.75%. The Australian dollar was among the best performing currencies after hitting 0.7458 - the highest level since May 6. The Australian currency rose one percent against the euro and the yen.
The British pound managed to recover after reaching earlier 3-week low against the dollar. The reason for the good performance were two polls that give priority to the supporters to remain in the UK in the EU. This is in contrast with the results of Monday when the majority of respondents supported the country's exit from the EU. The British pound rose one percent against the dollar, reaching 1.4574. Investors and politicians warned that the eventual exit of Britain from the EU could hit the global economy and financial markets.
The dollar teetered about its direction around the 4-week low as investors speculated about when will be the next increase in interest rates.
The dollar index, showing the performance of the greenback dropped to 93.874, holding near 4-week low at 93.745.

The discipline in forex

As everywhere, the discipline plays an important role in forex trading. Successful forex traders have iron self discipline. They plan each of their deals and then simply trade their plans. If you do not develop a clear plan for trade and follow it consistently, you will find difficulties in continuing earning money as a trader.

Doing random profitable deal, even throw away any plan can deliver short pleasure, but making occasional deals can affect negative on the ability to maintain discipline in the long run. When you stop following your plan, but although you're rewarded, you may have believed that pursuing the plan is not a big deal. Unjustified profits increase the tendency to follow any plan in the future. Positive results from this are short and a lack of discipline always ends with a loss. So keep constant your discipline.

Tuesday, 7 June 2016

Which events are significant in forex?

Central bank policies are a result of all economic data. Think of the economic data as clues which give speculators the ability to predict what the next move of the central banks will be. Most central bankers disclose their policy on a certain date. Therefore, it makes no sense to ignore information that forms their policy.

Fundamental analysis in forex should always begin with Studying the policies of central banks. I am sure that a trader can be successful only if traded an important speech and statements about the interest rates. If you understand given policy, you can see goers data in this context, which will make the image clearer and you can forecast a change in policy before it occurred.

Monday, 6 June 2016

False expectations among traders

Having expectations can be very useful for traders. They are tests, that help us to determine the failure or success, they also gives us goals to follow.

On one hand, expectations are great, but we must be careful with them. If they are too high or unrealistic, we'll probably be disappointed. One of the most common expectations that lead to disappointment among traders is that more transactions equals to faster learning process. It is true that more transactions lead to more experience, but that does not mean that we will learn much more quickly if we make more transactions. This is a dangerous attitude and so can only undergo emotional risk.

The key to faster learning process is to concentrate on the quality of your transactions than on quantity. Instead of doing much deals, our priority should be preparing to enter the deal and making reasonable decisions.

Friday, 3 June 2016

How to recover your trading motivation?

The first step is to look at the delicate details of your trade, but also to keep in mind the big picture. Do you trade the right way?

Return to your trader diary and see your recent transactions. If you do not have one, I advise you to make one. Ask yourself the following questions:
- Is there something you've changed or do anything different from usual trading plan?
- Do you explicitly follow your trading plan?
- Are you doing something wrong?
- Do you miss something ?
When you find your mistakes, it will remove the lack of motivation.

Thursday, 2 June 2016

Undeniable truths in forex

Expect the unexpected. Accept it. No matter how much you try in you analyzes, you will not have 100% accurate idea which way the market goes. There is always a chance that surprise waiting around the corner, perhaps in the form of undeclared currency interventions or shocking comments from central banks. In fact, these unforeseen events can not to be caused by the economic scene, but take the form of natural disasters or sudden declared war. Even if you stare at the chart constantly, keep track of forex calendar, listen to the news every day, you probably will not be able to predict such events. Unless you're Nostradamus ...

Wednesday, 1 June 2016

How to trade Brexit - free online webinar

ActivTrades - a leading award-winning broker, presents its free online webinar "London BREXIT Update: One month to Referendum".
It will be held on 02/Jun, Thursday, 7pm-8pm.
Guest speaker: Malte Kaub, Managing Director at the Traders' Leadership Council in London. He will discuss what is the most likely scenario after the Referendum, according to the leading traders in London.

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