Market analysis and trade recommendations by FBS

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Technical analysis

Technical analysis (TA) is a method of predicting the future performance of an asset’s price (in our case, the price of a currency pair) on the basis of its historical performance.

In other words, technical analysts study financial charts in order to determine what will happen with the price next.

In contrast to fundamental analysis which is regarding the “value” of the asset, technical analysis is only interested in price, volume and other market information. Some traders use either technical or fundamental analysis, while others combine these two methods to make trading decisions..

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5 INSPIRING STORIES ABOUT MONEY

New Year is a great time to set new goals, create plans and recharge your inspiration. And what can be more inspirational, than a story of success? Forex is a place where everything is possible for everyone. Here are 5 impressive stories of famous traders, who started with very different backgrounds, but have one thing in common – success...

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LESSON 7. Quotes: pips and big figures

On Forex market, the value of a currency is given in pips.
Pip is an acronym of “Percentage in Point”. It represents the smallest change an exchange rate can make.
Most currencies are quoted to four numbers after the point, so one pip equals to 1/100 of a percent (0.0001)
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Top events this week will bring us

More at: http://bit.ly/2sij5SM

08.01.2019

5 important event to follow this week!

1. Canadian Trade Balance data (January 8, 15:30 MT time (13:30 GMT)). Trade balance data is important for the Canadian economy and the CAD. That’s why the release may strongly affect the direction of the Canadian dollar.

2. BOC Rate Statement – (January 9, 17:00 MT time (15:00 GMT)). The Bank of Canada is one of the most unpredictable central banks in its decisions. But as usual, the hawkish mood of the BOC will boost the CAD. In the case of the cautious tone, the loonie will decline.

3. BOE Governor Carney Speaks (January 9, 17:30 MT time (15:0 GMT)). Comments by members of central banks are always highly important, especially when they are from heads of the CBs. The UK has been coming to the end of the Brexit saga or not? Encouraging speech of Mr. Carney will support the GBP while dovish mood will pull the GBP down.

4. FOMC Meeting Minutes (January 9, 21:00 MT time (19:00 GMT)). The Fed raised the interest rate in December 2018, however, it didn’t boost the market sentiment. Traders worry about the slowdown in the rate hikes’ pace. If the release is more positive than anticipated, the USD will rise.

5. US CPI figures (January 11, 15:30 MT time (13:30 GMT)). CPI is one of the crucial economic data that is followed by traders all around the world. CPI and Core CPI figures will affect the direction of the US dollar. Everything is simple: if the actual data outperform the forecasts, the USD will rise. Vice versa, the US dollar will depreciate.

Hot topics:

The Parliament vote for the final Brexit deal was postponed from January 11 to January 15. Further postpones? MAY BE.

Theresa May is going to chair a new cabinet committee (the EU exit and trade (preparedness) committee) that has been set up to take charge of the Brexit planning. Among other issues, it will cover planning for a no-deal Brexit.

 

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Trade on the comments by the BOC

More at: http://bit.ly/2CYQxUt

09.01.2019

The Bank of Canada (BOC) will present its monetary policy report and make the rate statement on January 9 at 17:00 MT time.

The market expectations of the rate hike are low, however, the comments by the bank of Canada governor Stephen Poloz may support the Canadian dollar. Last comments by the BOC governor Mr. Poloz were not very certain due to the fall in the oil prices and the trade war between the US and China. As the output cut by the OPEC+ has started since the beginning of the year, the central bank of Canada may sound more confident this time.

• If the BOC is hawkish, the CAD will rise;

• If the BOC is dovish, the CAD will fall.

 

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Japan’s wages calculation in GDP will be revised

More at: http://bit.ly/2CdYT9e

11.01.2019

On Friday, Japan's cabinet told it’s on the verge of amending the calculation of employees’ compensation in the country’s GDP. Moreover, the Japanese government will most likely have its draft budget revised having understated wages data for over a decade because of faulty polling techniques.

The revisions aren’t anticipated to change the tempo of economic surge in Japan. Simultaneously, that’s an embarrassment for Prime Minister Shinzo Abe due to the fact that his cabinet has enacted a number of policies to avert the risk of deflation by simply stimulating wages to go up.

In fact, inaccurate wage data makes it difficult to evaluate whether Abe's policies are really working and could raise questions regarding the credibility of other data, thus leaving Japanese policy makers blind-sided in their attempts to speed up sustainable economic surge.

As some financial analysts pointed out, escaping deflation turns out to be Abe's number one economic objective, and if you’re unable to trust the data you are unable to make rational policy decisions. Last year the Japanese cabinet altered the sampling method for the purpose of improving wages data, and now they’re telling they had the data understated, which is incredible.

On Friday, the Cabinet Office that compiles GDP told that it’s going to uncover revisions for wages in 2016-2017 at the end of January. In February, the Cabinet Office is going to disclose revisions to wages data from 2015 and also earlier.

On Friday, the country’s Finance Minister Taro Aso told that the cabinet won’t probably have its budget draft revised for the next fiscal year to pay for a shortfall of employment insurance benefits provoked by mistakes in Japan’s wage data.

Such a rare move as this probable budget revision would follow the revelation that the labor ministry wrongly calculated employees’ average wages for years.

 

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5 important things this week will bring us

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14.01.2019

Parliament Brexit Vote - (Tue, tentative) – Theresa May postponed the vote, which was scheduled for December, due to the high probability of rejection by the Parliament. However, that delay did not help the prime minister to raise confidence in the current Brexit deal. If Theresa May loses, there are high risks of the Brexit delay as well as the forced government election and the second referendum. In addition, the possibility of a chaotic no-deal Brexit still exists. A negative outcome will pull the British pound down. Today it is recommended to keep an eye on Theresa May’s speech at 17:30 MT time, where she will comment on the current situation and express her opinion on the parliament vote. Her comments will make the British pound volatile.

US PPI and core PPI m/m – (Tue, 15:30 MT (13:30 GMT) time) – The level of producer price index is expected to decline by 0.1 %, while core PPI will likely advance by 0.2%. Higher-than-expected data will support the USD.

British CPI – (Wed, 11:30 MT (9:30 GMT) time) – The inflation of Great Britain is going down due to the energy prices. According to analysts, the December level will show a decline to 2.1%. If the actual figures are higher, the GBP will rise.

Speech by the Bank of Japan governor – (Thu, 5:20 MT (3:30 GMT) time) – The governor of the most dovish bank Haruhiko Kuroda will make his comments on the monetary policy of the Bank of Japan and the economic conditions of Japan. Any unexpected announcements by Mr. Kuroda will bring excitement to the JPY traders.

Canadian CPI (Fri, 15:30 MT (13:30 GMT) time) – According to experts, the level of consumer price index in Canada will fall by 0.3%. Let’s see if the actual data brings a positive momentum to the Canadian dollar.

Hot topics:

The G20 meeting for finance ministers and central bankers on January 17-18 will be in focus. It will be interesting to hear comments on the current situation in the financial markets.

The slump of Chinese export and import in December added pressure for reaching a deal with the US. According to the recent news, Chinese Vice-premier Liu He plans to travel to the US for the further talks on the trade deal at the end of the month.

 

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Trade the British pound on the inflation data

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15.01.2019

The level of British consumer price index (CPI) will be released on January 16 at 11:30 MT time.

This indicator accounts for a majority of overall inflation. The data is very important, as the bank of England uses it to measure the inflation level. Last month the index remained at the same level of 2.3%, as it was forecast by analysts. Higher-than-expected data will bring a positive momentum to the British currency.

• If CPI is higher than expected, the GBP will rise;

• IF CPI is lower, than expected, the GBP will fall.

 

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UK pound strengthens on Brexit vote defeat

More at: http://bit.ly/2HiuhZQ

16.01.2019

On Wednesday, the UK currency managed to strengthen after a dive overnight when the British main legislative body overwhelmingly voted down the country’s Prime Minister Theresa May's Brexit agreement, thus contributing to uncertainties surrounding Great Britain’s withdrawal from the EU.

As a matter of fact, the currency pair GBP/USD hit 1.2862 having tumbled to 1.2667 late on Tuesday.

On Tuesday, the UK parliament voted 432-202 against her deal, which appears to be the worst parliamentary defeat for the country’s cabinet in recent UK history.

The UK pound had gone down over 1% versus the evergreen buck in the wake of the vote, before bouncing off because the sizable defeat for the country’s Prime Minister was making the United Kingdom pursue different options.

However, there’re also fears that the given result may provoke political upheaval, which could result in a disorderly Brexit.

As some financial analysts explained, while the margin of Prime Minister’s loss appeared to be a surprise, but the defeat itself was something financial markets had been pricing in for a long time. As a result, traders covered their short positions in the UK currency following the vote.

March 29 turns out to be the deadline for Brexit, although with the clock rapidly ticking down an extension of the deadline currently seems more probable.

The UK pound was nearly intact versus the common currency. The currency pair EUR/GBP demonstrated a reading of 0.8874.

The euro stood still versus the greenback. The currency pair EUR/USD showed 1.1419.

As for the Japanese yen, it surged a bit versus the evergreen buck. The currency pair USD/JPY went down by nearly 0.12% being worth 108.53.

Gauging the evergreen buck’s actual purchasing power against its main peers the USD index tumbled by about 0.18% being worth 95.50.

 

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Dow concludes up

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16.01.2019

On Wednesday, the Dow concluded up for a second consecutive day, led by a leap in financials because positive quarterly outcomes from Wall Street financial institutions backed investor optimism on gains.

As a matter of fact, the Dow Jones Industrial Average headed north by 0.59%. The S&P 500 ascended by 0.19%, the Nasdaq Composite surged by 0.15%.

Bank of America along with Goldman Sachs delivered fourth quarter outcomes that beat on both the top as well as bottom lines, pushing their stocks up by respectively 7.2% and 9.6%.

Financials were also backed by an ascend in BlackRock Inc notwithstanding earning, which fell short of forecasts.

As for financials, they tacked on by 2.20% because the sector keeps clawback losses of 15% for the last year.

Additionally, United Continental's better-than anticipated profits, posted on Tuesday after markets were unavailable, pushed its equities more than 6% up. As for American Airlines Group as well as Southwest Airlines, they also concluded the trading session up.

The dismal backdrop for retailers kept affecting performance, with stocks of Nordstrom heading south by 4.7% after it posted soft same-store sales surge on full price merchandise, backing a downgrade from buy to neutral for Goldman Sachs.

Goldman Sachs told that Nordstrom's pre-announced holiday sales actually confirmed a marked slowdown in the full-price business, referring to dismal store traffic as a concern, as it showed up in a period where the consumer is enough strong and where news from other mall-based retailers on traffic has appeared to be more mixed.

The mostly bullish earnings as well as stable guidance have helped the broader market to extend profits, although a Fed's Beige Book disclosed that businesses are starting to perceive the pressure of soaring input costs that could compress margin.

Bank of America, United Continental, and Goldman Sachs appeared to be among the top S&P 500 performers for the trading session.

 

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Weekly Cryptonews

More: http://bit.ly/2AROgc5

18.01.2019

Jeremy Gardner, founder of Ausum Ventures: “The point is to get people to think about bitcoin, not spend it. I don’t think it’s good for that. It’s not meant to be used like cash.”

Bitcoin has stuck again: the digital currency has been trading sideways since the last Friday between $3,566 and $3,790 levels. The highly anticipated Ethereum’s update Constantinople failed to create additional volatility to the crypto market due to its postponement. The reason for that delay was a potential security vulnerability in the Ethereum’s chain.

For now, the grandfather of cryptocurrencies has been trading below the 50 MA on the H4 chart. If bulls manage to push bitcoin up, the price will retest the resistance at $3,720. If it’s broken, the next resistance is placed at $3,746. In case of a bearish pressure, bitcoin will fall to the support at $3,685. The next support is at $3,660.

In other news:

The popular New Zealand crypto trading platform Cryptopia was hacked on Tuesday. According to news, the platform suffered significant losses.

The president of Venezuela Nicolás Maduro raised the price of the national crypto El Petro from 9 to 36 thousand bolivars. In addition, he gave orders to sell 15% of the exported oil for El Petro. It’s uncertain, which countries it will be sold to, though.

Chevron and Total oil companies joined Vakt blockchain platform to trade energy resources.

R3 blockchain-consortium launched its own platform named Corda

Vlad Zamfir, an Ethereum developer and one of the main creators of the Casper protocol will cooperate with the Casper Labs start-up, which develops a separate blockchain using this protocol.

Blocksteam presented the API beta-version of its own project Satellite. It will help to send bitcoins to any part of the world through satellites.

Malaysian government officials are still undecided on whether or not they will legalize cryptocurrency. The matter is still under consideration, which is frustrating those looking to seize the moment to help the Malaysian cryptocurrency industry grow.

Bitcoin $3,735

Ethereum $125.21

Litecoin $32.30

DASH: $74.43

 

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5 important things this week will bring us!

More at: http://bit.ly/2WfwuZA

21.01.2019

Great Britain’s average earnings index 3m/y – (Tue, 11:30 MT (9:30 GMT) time) – Despite the Brexit headlines, economic data for Great Britain may also affect the GBP. We anticipate the level to increase by 3.3% in November. If the indicator outperforms the expectations, the GBP will rise.

BOJ monetary policy statement and monetary policy statement – (Wed, tentative) – the Japanese central bank will keep its interest rate unchanged, but the Japanese governor Haruhiko Kuroda could announce lower forecasts for inflation due to the economic slowdown.

Canada’s retail sales and core retail sales – (Wed, 15:30 MT (13:30 GMT) time) – The level of headline retail sales declined by 0.3%, while the level of core retail sales remained at the same level. The expected figures are going to be announced prior to the date. If the actual data is higher than them, the CAD will get positive momentum.

Australia’s employment change and unemployment rate (Thu, 02:30 MT (0:30 GMT) time) – Australia’s jobs level is forecast to increase by 18.1 thousand people. Higher levels will

ECB press conference – (Thu, 15:30 MT (13:30 GMT) time) – According to analysts, the first rate hike will be no earlier than in September and might be pushed back due to the signs of economic slowdown. However, the comments by the European central bank president Mario Draghi may shake the euro. His hawkish tone will push the currency up. On the other hand, if he is cautious, the euro will go down.

Hot topics:

The trade negotiations between the US and China have stuck for now, as the sides made little progress on the intellectual property rights issue. The further talks are scheduled to continue at the end of January in the US.

Donald Trump and senior Democrats took their first steps toward a compromise deal on immigration and border security. However, it is still unclear if the sides come to an agreement, as Democrats want the government to open first. It’s worth to mention that Trump offered 3 years of deportation relief for some immigrants in return for $5.7 billion for border walls on Saturday. Democrats rejected this offer before the speech by the US president. We will keep you the further progress of the deal.

More on Brexit: Theresa May returns to Parliament to explain her next steps. Earlier, she told the Cabinet she’ll try to get her deal through Parliament with votes of Conservatives and her Northern Ireland allies. In addition, the German Chancellor Angela Merkel said she would support the British prime minister.

 

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Yen slips in Asia

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23.01.2019

On Wednesday, the Japanese yen headed south versus its major peers because investor risk appetite improved during Asia trade, although worries over decelerating global surge and US-China trade clashes will probably cap gains in risky assets.

As a matter of fact, the Japanese yen dived by 0.25% against the US currency ending up with a reading of 109.62. Versus the Australian currency, it slipped by 0.5%.

As anticipated, the Bank of Japan kept monetary policy intact and reduced its inflation estimate, with a greater-than-anticipated dive in December export data earlier in the day giving an emphasis to the necessity for continued support for the Japanese trade-reliant economy.

Moreover, the Australian dollar headed north by 0.2% against the evergreen buck reaching $0.7137.

For recent week the foreign exchange market has been whipsawed because investors attempted to come to terms with an array of issues from Brexit to decelerating global surge and the outlook for key major financial institutions.

Nervousness around global surge as well as trade clashes - these are the factors powering the financial markets now, as some analysts explained.

The International Monetary Fund had its 2019 and also 2020 global surge estimates trimmed, explaining that move by a greater-than-forecast deceleration in the Eurozone and China. The organization also stressed that the inability to resolve trade clashes could further impact a decelerating global economy.

The previous year’s surge in China turned out to be the slowest since 1990. What’s more, it’s braced for weakening further in 2019 before stimulus measures start kicking in.

Market participants are hoping for a significant progress in US-China trade negotiations, with the tariff conflict between the world's leading economies already affecting financial markets as well as global demand.

A report by the Financial Times that America had rejected the Asian country’s proposal for preparatory trade negotiations impacted risk sentiment overnight. However, later it was debunked by a White House adviser.

 

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RSI (Relative Strength Index)〽

RSI also helps to determine the overbought/oversold state of the market to buy low and sell high. The readings of the indicator fluctuate between 0 and 100. If RSI rises above 70 bound, it means that the pair is overbought. If RSI falls below the 30 line – the currency pair is oversold. Moreover, as with MACD, a divergence between RSI and price may warn of the market's reversal..

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Weekly Cryptonews

Read more: http://bit.ly/2FMoH0g

25.01.2019

Martin Weiss, the founder of Weiss Ratings: “Like gold, Bitcoin and other cryptocurrencies could become a haven for investors who flee from fiat currency devaluations. In fact, in one key aspect, it may be even better than gold: It cannot be confiscated by any government.”

Tuesday happened to be the most volatile day for Bitcoin this week, as the cryptocurrency fell below the $3,500 level, but managed to rebound quickly to the levels near $3,600. On the H4 chart, we can see that the grandfather of cryptocurrencies has been trading within the $3,586-3,642 range for the last three days. The rebounds from these levels may be used to open positions. For now, Bitcoin has already tested the ground below the support at $3,586. If this level is broken, the next support lies at $3,563. In case bulls get stronger, they may push its price above the resistance at $3,642. The next resistance is placed at $3,658. However, the overall picture of the market and the trend are still bearish. That is why we may expect further falls.

Other news:

Chicago exchange CBOE has canceled its request to approve VanEck and SolidX Bitcoin ETF (exchange-traded funds) due to the current government shutdown. It plans to ask for the approval again when the Security exchange commission starts to work.

Cryptocurrency bank Galaxy Digital plans to invest $250 million to issue credits to blockchain companies, which struggle with the bear market.

The candidate for the US president post, a huge supporter of crypto and the founder of the famous antivirus software John McAfee left the country after he was indicted on charges of tax fraud.

The market anticipates the presentation of the TON blockchain network and GRAM token by Pavel Durov during the World Economic Forum this week. This is a highly important event, which may affect the market positively. According to the news, TON will be launched in March.

The “World Economic and Social Survey 2018” report by the United Nations said cryptocurrencies and blockchain allow to switch their confidence from banks and governments to program codes.

Regulations:


Japanese Regulators Approve Startup’s Bitcoin Sidechain Trial for Exchanges

Chili and Romania plan to apply taxes on crypto operations’ income.

The United Arab Emirates and Saudi Arabia develop a cryptocurrency for payments between banks or governments.

Bitcoin $3,656.5

Ethereum $118.45

Litecoin $33.31

DASH: $76.00

 

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LESSON 10. Calculating value of a pip

In order to calculate the value of one pip in a currency pair, you have to multiply the amount of your trade in lots by one pip in a decimal form (0.0001 or 0.01), and then divide it by the current exchange rate of the quote currency to the US Dollar.

Lot is given in units of our base currency.

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The Fed’s comments may move the USD higher

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29.01.2019

The Federal Reserve and the FOMC will make the monetary policy statement and announce the official rate on January 30 at 21:00 MT time.

There is no chance that the Fed will raise its current 2.5% interest rate. In addition, the recent dovish comments by the FOMC members and the Fed Chair Jerome Powell signaled the pause in rate hikes if the US economy weakened. In case the monetary policy statement contains some positive data, the USD will get positive momentum.

• If the FOMC statement is hawkish, the USD will rise.

• If the FOMC statement is dovish, the USD will fall.

Check the economic calendar

 

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Budget Management Tips. ‍

A lack of money management skills can cost you everything you have on your trading account – even if you are good in everything else. What can you do to enter, stay, and profit on the market through money management? Read on and see.
We analyzed the most popular money management strategies and picked the most valid tips for those who want to maximize their investment effort.

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Average True Range
Average True Range (ATR) is an indicator of market’s volatility. In other words, it helps to determine the average size of the daily trading range. ATR rises when trading is more volatile (price bars are long) and falls during periods of low volatility (price bars are short). Use ATR to determine the best position for Stop orders.

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Trading strategy with a dead cat bounce

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Imagine that you trade your favorite currency pair in the long-lasted bear market. Suddenly, the price has started to go up. However, don’t get confused too quickly. There is a possibility that you faced with a so-called dead cat bounce. Wait, don’t be scared, FBS carries about animals and the environment! This is just the name of the short-term retracements. But they may actually be “deadly” for you, especially if you do not know how to trade during this situation and how to divide such bounce from the actual reversal. In the article, we provide you the explanation of the dead cat bounce and the trading strategy, which may be used to trade during this kind of reversal.

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