InvestMacro

By GrowthAces.com

EUR/USD: Fed will remove accommodation patiently and gradually

Macroeconomic overview: Fed Governor Jerome Powell said the impact of the new Trump administration’s effect on the economy remains too uncertain for the U.S. Federal Reserve to react or begin recasting its outlook.

Asked about the collapse of the healthcare bill last week, Powell said that uncertainty about “the scope, the timing and the contents” of President Donald Trump’s policies were making it difficult for Fed policymakers to assess what they might mean.

Powell added: “It is appropriate we stay on this path to gradually raise interest rates. March was a good time… There will be scope for more.”

Kansas City Federal Reserve President Esther George said she needs to see more details on the Trump administration’s fiscal proposals before factoring them into her economic forecasts.

U.S. Federal Reserve Vice Chair Stanley Fischer that two more rate hikes this year seemed about right.

Dallas Federal Reserve Bank President Robert Kaplan said the Fed should be careful not to jolt the economy with aggressive rates hikes. He added: “I think it would be healthy to remove accommodation… patiently and gradually.”

The Conference Board said U.S. consumer confidence index hit 125.6 in March, surpassing expectations for a reading of 114, and much higher than 116.1 in February. The March level marked the highest since December 2000. The data pushed up U.S. Treasury yields and supported the USD.

European Central Bank Governing Council member Jan Smets said that hawkish views are reflecting a “minority position”. This is an important comment given the comments from other ECB members of late especially those from Mersch and Nowotny. In February ECB Executive Board member Mersch indicated a desire for the ECB to adjust its forward guidance on rates in its communication. Then, earlier this month, ECB’s Nowotny said that the ECB will only decide later whether to raise rates before or after QE stops. These comments from Mersch and Nowotny cast doubt and helped fuel an expectation that the ECB could announce a change in forward guidance. The ECB’s current forward guidance is that rates will remain “at present or lower levels” for an “extended period of time” and “well past the horizon” of net asset purchases. Our own expectation is for the ECB to drop the reference to “or lower” in its forward guidance in June and to announce a tapering of QE at the October ECB meeting.

Smets comment does little to help clear the uncertainty over the speed at which the ECB wants to move toward the exit. Core inflation has yet to rebound strongly and is likely to play an important role. Progress is still needed on Draghi’s criteria that an improvement in inflation should be over the medium term, any rise should be durable, self-sustainable, and for the whole of Eurozone. It is likely that Draghi will at the next meeting on April 27 provide greater clarity and the position of the ECB majority.

It is likely that Draghi will leave sufficient wiggle room for a change in forward guidance while sticking to the current script that current policy will remain in place until the end of the year, as well as reiterate current forward guidance. However, following the March meeting there was a dilution of the forward guidance language from Draghi who said that the “present or lower level” is an expectation, and that the probability of this expectation has gone down.

It is likely that at the June meeting the probability of an expectation that rates will remain at “present or lower levels” will have adjusted sufficiently to promote an adjustment in communication. This should help please the hawks and not displease the doves as the latter will still find comfort in that current policy will remain in play until end-2017. The debate over an ECB exit is likely to help support EUR/USD.

Technical analysis: In line with our expectations, we see some corrective moves on the EUR/USD. We think that the rate is likely to fall near 14-day exponential moving average, currently at 1.0753. Long-term charts remains bullish.

Short-term signal: We think that the reaction to stronger U.S. consumer confidence data could be a good opportunity to buy EUR/USD, as medium-term outlook has not changed. We have opened EUR/USD long at 1.0780 for 1.0960.

Long-term outlook: We stay long for 1.1125.

USD/CAD: Loonie supported by oil prices rise

Macroeconomic overview: The CAD hung in with a broadly stronger USD, helped by rising prices for oil, a major Canadian export, as the Bank of Canada stuck to its cautious tone.

Oil prices on Wednesday extended gains from the previous session, lifted by supply disruptions in Libya and expectations that an OPEC-led output reduction will be extended into the second half of the year.

Oil production from the western Libyan fields of Sharara and Wafa has been blocked by armed protesters, reducing output by 252k barrels per day.

Iranian Oil Minister Bijan Zanganeh said that a global oil cuts deal is likely to be extended, but that time is needed to discuss the subject thoroughly first. Asked whether Iran would be ready to cut its own output under the possible extension, Zanganeh said: “I think it is necessary that all members comply with their commitments.” The OPEC, along with some other producers including Russia, have agreed to cut production by almost 1.8 million bpd during the first half of the year in order to rein in a global fuel supply overhang and prop up prices.

Bank of Canada Governor Stephen Poloz said Canada’s economy has a lot more room to grow, with higher unemployment and more excess capacity than the United States, and if interest rates were raised today Canada would tip into recession. Poloz defended the bank’s dovish outlook – which contrasts with the U.S. Federal Reserve’s hike earlier this month and plan for more – in the face of recent stronger-than-expected growth in jobs, GDP and retail sales. Canada is due to report GDP data for January on Friday.

Technical analysis: The USD/CAD has not managed to close above the 23.6% fibo of January-March rise. The technical analysis does not provide a clear signal, but a recovery in oil prices suggest that downward move is more likely now.

Short-term signal: We have opened a short position at 1.3370. Our target is at 1.3260

Long-term outlook: Long-term target of our short position is 1.3100.

GBP/USD: We closed all GBP positions in the run up to Brexit

Macroeconomic overview: The GBP/USD is under pressure as investors braced for British Prime Minister Theresa May’s move later on Wednesday to formally file paperwork to leave the European Union.

Investors were also assessing news that Scotland’s parliament had backed a vote for independence even though the British government said it would not enter independence negotiations with Scotland.

Further weighing on the pound, Bank of England interest rate-setter Ian McCafferty highlighted a weak outlook for the economy on Tuesday, and said he did not know if he would vote to increase borrowing costs at the next BoE meeting in May.

Technical analysis: The GBP/USD continues to pullback in the daily cloud, the base is at 1.2356. 50% fibo support of the March rise at 1.2361 is just ahead. Technical analysis suggests further GBP/USD fall, but these suggestions will be overshadowed by Brexit news.

Short-term signal: We have closed all our GBP positions today due to high uncertainty in the run up to Brexit . The GBP/USD long hit the stop-loss at 1.2400. We closed EUR/GBP long at 0.8690 with a smaller profit than initially planned.

Long-term outlook: We stay sideways on all GBP pairs.

TRADING STRATEGIES SUMMARY:

FOREX – MAJOR PAIRS:

FOREX – MAJOR CROSSES:

PRECIOUS METALS:

It is usually reasonable to divide your portfolio into two parts: the core investment part and the satellite speculative part. The core part is the one you would want to make profit with in the long term thanks to the long-term trend in price changes. Such an approach is a clear investment as you are bound to keep your position opened for a considerable amount of time in order to realize the profit. The speculative part is quite the contrary. You would open a speculative position with short-term gains in your mind and with the awareness that even though potentially more profitable than investments, speculation is also way more risky. In typical circumstances investments should account for 60-90% of your portfolio, the rest being speculative positions. This way, you may enjoy a possibly higher rate of return than in the case of putting all of your money into investment positions and at the same time you may not have to be afraid of severe losses in the short-term.

How to read these tables?

1. Support/Resistance – three closest important support/resistance levels
2. Position/Trading Idea:
BUY/SELL – It means we are looking to open LONG/SHORT position at the Entry Price. If the order is filled we will set the suggested Target and Stop-loss level.
LONG/SHORT – It means we have already taken this position at the Entry Price and expect the rate to go up/down to the Target level.
3. Stop-Loss/Profit Locked In – Sometimes we move the stop-loss level above (in case of LONG) or below (in case of SHORT) the Entry price. This means that we have locked in profit on this position.
4. Risk Factor – green “*” means high level of confidence (low level of uncertainty), grey “**” means medium level of confidence, red “***” means low level of confidence (high level of uncertainty)
5. Position Size (forex)– position size suggested for a USD 10,000 trading account in mini lots. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size). You should always round the result down. For example, if the result was 2.671, your position size should be 2 mini lots. This would be a great tool for your risk management!
Position size (precious metals) – position size suggested for a USD 10,000 trading account in units. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size).
6. Profit/Loss on recently closed position (forex) – is the amount of pips we have earned/lost on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
Profit/Loss on recently closed position (precious metals) – is profit/loss we have earned/lost per unit on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
About the Author:

By GrowthAces.com – Daily Forex Trading Strategies

By Peter Epstein, CFA, MBA    [email protected]    Epstein Research

By OilPrice.com

International news services now report that Japan’s Toshiba Corporation (9502.T) is preparing to make a chapter 11 bankruptcy filing for its Westinghouse Electric subsidiary as soon as this Monday, March 27. For most of our readers this news evokes little surprise. This is merely another chapter of a slow moving financial and accounting train wreck involving nuclear design and construction firm Westinghouse and its troubled Japanese parent, Toshiba. But like an old, leaky garbage scow there is much to clean up in its wake.

The two U.S. utilities with the most at risk are Southern Company and SCANA Corp. Westinghouse is presently constructing two unit, AP 1000 nuclear power stations for each utility. These projects are over-budget and behind schedule. It appears that Westinghouse offered both utilities a fixed price contract for these new nuclear plants. Our best guess is that this fixed price construction guarantee has doomed Westinghouse and prevented other potentially willing buyers from stepping in. No one it seems is willing to take on this seemingly open-ended nuclear construction liability.

What does this mean for the two domestic utilities embroiled in this international financial quagmire?

First, we expect that they will complete both nuclear construction projects. The bulk of heavy capital expenditures for both utilities seem to be in the 2017-2019 period.

Second, it is in all interest of all potential litigants to see these plants completed. Westinghouse/Toshiba, for one, would at least get to showcase the AP 1000 design and its successor entity could advocate for additional sales of this reactor design. A working design has value. (What happens in the UK is another matter where Toshiba hoped to build several plants). The utilities, which need new power stations, get large, rate based, non-fossil base load power generating resources for the next 40-60 years.

The worst case scenario for utility investors would be if the utilities had to cancel the projects and take big write offs. But we assign a very low probability to this scenario.

Perhaps, more likely, a Westinghouse bankruptcy means abrogation of the fixed price contracts signed with Southern and SCANA. News reports this week indicated that both utilities had hired bankruptcy counsel.

As these plants are brought on line, presumably in the 2020-2021 time frame, the matter will go before the state utility commissions of Georgia and South Carolina. Both commissions approved these nuclear projects. It’s just that the plants will cost more than expected.

Unfortunately for investors, they will have to live with uncertainty until the regulators make their decisions. There are no clear precedents for the decisions, other than that commissions typically allocate or split unexpected financial burdens like these between shareholders and consumers. And that the amounts at risk won’t be modest given the size of the projects.

Link to original article: http://oilprice.com/Latest-Energy-News/World-News/What-A-Westinghouse-Bankruptcy-Could-Mean-For-US-Utilities5507.html

By Leonard Hyman and Bill Tilles for Oilprice.com

Article By RoboForex.com

EUR USD, “Euro vs. US Dollar”

At the H4 chart of EUR USD, bearish Dark Cloud pattern indicates a descending correction. A new Window remains open. Three Line Break chart shows a bullish direction; Heiken Ashi candlesticks confirm the descending correction.

At the H1 chart of EUR USD, bearish Harami pattern indicated a descending correction. The upside Window is a support level. Three Line Break chart and Heiken Ashi candlesticks confirm a bearish direction.

USD JPY, “US Dollar vs. Japanese Yen”

At the H4 chart of USD JPY, Engulfing Bullish pattern indicates an ascending correction. Three Line Break chart shows a bearish direction; Heiken Ashi candlesticks confirm an ascending movement.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By GrowthAces.com

Macroeconomic overview: Dallas Federal Reserve Bank President Robert Kaplan said on Monday that he would support further interest rate hikes if the U.S. economy takes more steps toward reaching the Fed’s goals of full employment and 2% inflation. Kaplan, who votes this year on Fed policy, repeated his view that the economy will likely grow about 2.25% this year, but could grow faster, or more slowly, depending in part on the policies the new administration implements. With government debt rising, reform of entitlement programs such as Medicare and Social Security must be on the table, he said.

Chicago Fed President Charles Evans said that the case for four interest rate hikes in the United States this year is not yet solid and would require a stronger lift in inflation. Evans said he saw three rate hikes in 2017 as “plausible”, but added that two or four increases were also a possibility. In his opinion long-term inflation expectations may still be running below the U.S. Federal Reserve’s target of 2%, though in the shorter term prices are rising towards that figure. Evans said he did not expect core inflation, which strips out volatile elements like energy prices, would reach the 2% target until 2019.

The dollar steadied on Tuesday after its worst week since U.S. President Donald Trump’s election in November, promises of more rises in Federal Reserve interest rates this year helping it recover from multi-month lows in still shaky global markets.

Technical analysis: The EUR/USD managed to close above 1.0825 (38.2% retrace of May-January fall), which means that 1.0976 (50%) is unmasked. Tenkan line is pointing north, indicative of positive momentum. The 7-day exponential moving average is positively aligned.

Short-term signal: We are looking to buy EUR at 1.0780. Our next short-term target will be 1.0960, just below 50% fibo of May-January drop.

Long-term outlook: Long-term target is 1.1125.

USD/CAD: Near-term outlook is unclear, all eyes on Poloz today

Macroeconomic overview: The Canadian dollar was little changed on Monday against its U.S. counterpart as lower oil prices offset broadbased losses for the greenback. Investors are focused on a today’s speech by Bank of Canada Governor Stephen Poloz. He is likely to be asked about the recent better-than-expected economic performance in Canada.

Canada’s annual inflation hit the central bank’s 2.0% target in February for the second month in a row, but closely watched core measures remained tame, indicating little pressure for a rate hike. The market had expected inflation to remain at 2.1%.

Earlier this month, the Bank of Canada said it was looking past what it called the temporary impact of higher energy prices, noting that muted underlying inflation continued to point to material excess capacity. Of the three new core inflation measures, CPI common, which the central bank says is the best gauge of the economy’s underperformance, was furthest away from target, remaining at 1.3%. CPI median, which shows the median inflation rate across CPI components, remained at 1.9%, while CPI trim, which excludes upside and downside outliers, slipped to 1.6% from 1.7%.

We expect the next move of the Bank of Canada will be a hike in the second quarter of 2018

Technical analysis: The USD/CAD did not manage to break below support at 38.2% fibo of January-March rise and is testing the resistance at 23.6% fibo of that move now. The technical analysis does not provide a clear signal for now, but a close above 1.3399 will support USD/CAD bulls.

Short-term signal: Small profit taken on USD/CAD short after the rate hit the lowered stop-loss level at 1.3410. We stay sideways now.

Long-term outlook: In our opinion long-term outlook is slightly bearish, given improving fundamentals of Canadian economy. But there is still a risk of upward move in the near term.

TRADING STRATEGIES SUMMARY:

FOREX – MAJOR PAIRS:

FOREX – MAJOR CROSSES:

PRECIOUS METALS:

It is usually reasonable to divide your portfolio into two parts: the core investment part and the satellite speculative part. The core part is the one you would want to make profit with in the long term thanks to the long-term trend in price changes. Such an approach is a clear investment as you are bound to keep your position opened for a considerable amount of time in order to realize the profit. The speculative part is quite the contrary. You would open a speculative position with short-term gains in your mind and with the awareness that even though potentially more profitable than investments, speculation is also way more risky. In typical circumstances investments should account for 60-90% of your portfolio, the rest being speculative positions. This way, you may enjoy a possibly higher rate of return than in the case of putting all of your money into investment positions and at the same time you may not have to be afraid of severe losses in the short-term.

How to read these tables?

1. Support/Resistance – three closest important support/resistance levels
2. Position/Trading Idea:
BUY/SELL – It means we are looking to open LONG/SHORT position at the Entry Price. If the order is filled we will set the suggested Target and Stop-loss level.
LONG/SHORT – It means we have already taken this position at the Entry Price and expect the rate to go up/down to the Target level.
3. Stop-Loss/Profit Locked In – Sometimes we move the stop-loss level above (in case of LONG) or below (in case of SHORT) the Entry price. This means that we have locked in profit on this position.
4. Risk Factor – green “*” means high level of confidence (low level of uncertainty), grey “**” means medium level of confidence, red “***” means low level of confidence (high level of uncertainty)
5. Position Size (forex)– position size suggested for a USD 10,000 trading account in mini lots. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size). You should always round the result down. For example, if the result was 2.671, your position size should be 2 mini lots. This would be a great tool for your risk management!
Position size (precious metals) – position size suggested for a USD 10,000 trading account in units. You can calculate your position size as follows: (your account size in USD / USD 10,000) * (our position size).
6. Profit/Loss on recently closed position (forex) – is the amount of pips we have earned/lost on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
Profit/Loss on recently closed position (precious metals) – is profit/loss we have earned/lost per unit on recently closed position. The amount in USD is calculated on the assumption of suggested position size for USD 10,000 trading account.
About the Author:

By GrowthAces.com – Daily Forex Trading Strategies

Article By RoboForex.com

EUR USD, “Euro vs US Dollar”

The EUR/USD pair is growing towards 1.0914. Possibly, the price may be corrected to test 1.0836 from above and then continue moving upwards with the target at 1.0914. Later, in our opinion, the market may form another correction to reach 1.0836 and then continue its growth towards 1.0954. This growth is considered only as an alternative scenario.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair is growing to reach 1.2654. Possibly, today the price may be corrected towards 1.2537 and then start growing to reach the local target. After that, the instrument may fall with the target at 1.2537.

USD CHF, “US Dollar vs Swiss Franc”

The USD/CHF pair is moving downwards. Possibly, today the price may be corrected towards 0.9885. Later, in our opinion, the market may reach 0.9775 and then resume moving upwards with the target at 0.9885.

USD JPY, “US Dollar vs Japanese Yen”

The USD/JPY pair is falling; it has formed the ascending impulse, but it’s not strong enough to continue. Possibly, today the price may reach 110.00 and then grow towards 110.74. After that, the instrument may fall with the target at 109.90.

AUD USD, “Australian Dollar vs US Dollar”

The AUD/USD pair is forming the forming the fifth descending wave with the target at 0.7541. Possibly, today the price may fall towards 0.7595 and then start consolidating. After breaking this range to the downside, the market may reach 0.7550.

USD RUB, “US Dollar vs Russian Ruble”

Being under pressure, the USD/RUB pair is falling. Possibly, today the price may move to reach 57.45. After that, the instrument may continue falling with the target at 55.50.

XAU USD, “Gold vs US Dollar”

Being under pressure, Gold is trading to the upside. Possibly, today the price may complete the correction at 1251.60. Later, in our opinion, the market may grow towards 1262.60 and then continue falling with the target at 1230.00.

BRENT

Being under pressure, Brent is trading to break 51.15 downwards. The price is expected to continue moving upwards with the local target at 52.50. After that, the instrument may fall to reach 51.20 and then grow with the first target at 52.80.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.

By Gabriel Ojimadu, Alpari

By Admiral Markets

Admiral Markets announced that Adam Narczewski, a highly experienced industry professional, has accepted the post of Country Manager for Admiral Markets Poland, effective as of March 2017.

Mr. Narczewski has a vast experience in helping companies become industry leaders. Prior to joining Admiral Markets Poland, he served as Deputy Regional Director at X-Trade Brokers DM, where he was responsible for the growth of the largest region in the XTB group.

From an academic perspective, Mr. Narczewski earned a Bachelor’s Degree of Science (Finance) from Winthrop University, USA and is certified as a Chartered Financial Analyst, Professional Risk Manager and Investment Advisor.

A brief interview with Mr. Narczewski reveals more details about his future plans as Country Manager at Admiral Markets Poland, as well as a piece of advice for anyone interested in personal development.

1. How excited are you to be moving into the new Country Manager role at Admiral Markets Poland? What in particular are you most excited about?

I’m very excited to be joining a top international Forex & CFDs Broker. The values and goals of Admiral Markets, such as excellence, integrity, innovation  and continuous growth,  complement my own beliefs and make it a perfect place for me to grow with. I have been in the industry for many years, but I am always looking for new challenges. The Polish Forex & CFDs market has experienced enormous growth, but also changes in the last 10 years. There is still place to grow and I am really excited that I will be able to that along with the Admiral Markets team.

2. As the new Country Manager for Admiral Markets Poland, what are your plans for the coming year?

Poland has become a very competitive Forex and CFDs market. Many brokers, local and foreign, are offering their services to Polish clients. Admiral Markets has been present on the market for many years, working very hard to achieve a strong reputation among traders. We have certain unique features that distinguish our offer from the others. My goal is to exploit  this competitive advantage, by focusing on the optimisation of our education offer. My plan for Admiral Markets is to be listed among the top 3 forex brokers in Poland within the next 2 years.

3. Tell us about your leadership style and why you think it will help you be successful in this new position?

I believe in the potential of my team. I think people achieve their best when the goals are clear and everyone is looking in the same direction, but at the same time they have the independence to be creative. I’m here to support them and help them grow. Basically, I want to focus on empowering people to achieve their highest potential.

4. You’re a fan of active sports and also find time for reading, working and even managing your own personal blog. How do you juggle so many different activities?

I have been an active person since I can remember. I played tennis when I was younger and I went to college in the U.S to play in the NCAA. Nowadays, I try to stay fit by playing football and jogging. As you need to practice your muscles or strokes to become better at sports, you also need to exercise your brain to stay mentally fit. That is why I enjoy reading books and during my free time, I manage my own blog. My advice? You just need to manage your time wisely and avoid wasting it on browsing the internet or watching useless tv shows.

About Admiral Markets:

Admiral Markets is a leading online trading provider specialising in Forex and CFDs on stocks, indices, precious metals and energy. In addition to a wide range of financial instruments, Admiral Markets offers free educational materials, including analytics, webinars and seminars. For more information, please contact [email protected] or visit Admiral Markets’ website.

By Adinah Brown

On January 15th, 2015, when the SNB suddenly decoupled the Euro from the Swiss Franc, perhaps unbeknownst to the SNB at the time, they released a torrential avalanche, where traders all over the world lost millions of dollars in a matter of moments. The EUR/CHF crash forced numerous forex brokers into insolvency in their inability to cover their client’s positions and stop losses were unable to catch the momentous fall causing devastating slippage. Within minutes trillions of dollars were wiped out of the financial markets, with little resources for the traders to call on, once the proverbial shit hit the global-market-fan. With incidents like these at the forefront of our mind, we consider a range of risk management techniques that would be effective at times of high volatility such as the infamous Black Swan event.

One of the most common techniques is the application of modern portfolio theory (MPT) where diversification is used to create groups of assets that are able to withstand volatility. This technique applies statistical measures to determine an efficient frontier for an expected amount of return in relation to a defined level of risk. Applying this theory involves examining the correlations between different assets and determining the volatility of those assets in order to create an optimum and well balanced portfolio. In the Black Swan event, financial institutions such as Alpari UK, were not applying the MPT theory to sufficiently manage their risk, undoubtedly causing their insolvency as a result of the plummeting value of the EUR/CHF.

Options are another valuable tool to manage risk during volatile periods. An investor who wishes to hedge a particular stock with reasonable liquidity can buy a put option to protect themselves against the risk of a downward movement. The option gains value as the price of the underlying security drops. However, the drawback to using an option is that its price will often go at a premium. Furthermore, an option is also subject to time decay as it loses value as time encroaches upon its expiry date. This strategy although effective, will only protect the individual stock that it’s being hedged against, an investor with diversified holdings will not be able to afford covering each of his positions with an option put.

Investors who want to hedge a larger portfolio of stocks should use index options. These broad based indexes track larger stock indexes such as the S&P 500 and Nasdaq which cut across many sectors and therefore their movements represent a good reflection of the overall economy. Historic charts have shown that stocks tend to be correlated, meaning that they generally move in the same direction, especially during periods of high volatility. By using index options an investor can hedge a diversified portfolio of stocks and hedge indexes with put options to minimize risk. Although doing this in a dooming period of volatility can also be expensive, at least this strategy provides protection across an entire portfolio.

Lastly, there is also the possibility to hedge using the volatility index indicator (VIX). This strategy measures the implied volatility of “at the money calls” and puts that are currently on the S&P500 index. Otherwise known as “the fear gauge”, it rises during periods where there is a lot of volatility. As a guide, a level below 20, indicates that the market is in low volatility, while a level above 30 indicates a highly volatile market. Investors also make use of exchange traded funds (ETFs) to track the VIX, ETF shares or options can go long on the VIX explicitly for the purpose of being used as a volatility specific hedge.

About the Author:

Adinah Brown is a professional writer who has worked in a wide range of industry settings, including corporate industry, government and non-government organizations. Within many of these positions, Adinah has provided skilled marketing and advertising services and is currently the Content Manager at Leverate.

Article By RoboForex.com

EUR USD, “Euro vs US Dollar”

It’s highly likely that the EUR/USD pair is about to complete the wave 2 in the form of the double zigzag. Right now, the price is finishing the zigzag in the wave [y]. As a result, in the nearest future the market may form the bullish impulse in the wave v of (c) of [y].

More detailed structure is shown on the H1 chart. The pair completed the extended wave iii along with the correctional wave iv. Consequently, on Friday the market may break the high. To confirm a new decline, the price has to form the bearish impulse in the wave i.

GBP USD, “Great Britain Pound vs US Dollar”

The GBP/USD pair is about to complete the horizontal triangle in the wave (iv). In the nearest future, the market may finish the wave e. If the price rebounds from the pattern’s upside border, it may start falling in the wave i.

At the H1 chart, the pair is forming the zigzag in the wave e of (iv). Possibly, the wave [C] of e is taking the form of the diagonal triangle. If the market rebounds from the triangle’s upside border, bears may try to reverse the pair to the downside.

USD JPY, “US Dollar vs Japanese Yen”

After finishing the double zigzag in the wave [x], the USD/JPY pair started falling in the wave (a). As a result, in the nearest future the market may be corrected in the wave (b), which may later be followed by a new decline in the wave (c) of [y].

More detailed structure of the descending impulse (a) is shown on the H1 chart. Possibly, the pair is finishing the fifth wave in the extended wave iii. Consequently, after breaking the local low, the market may start a local ascending correction.

AUD USD, “Australian Dollar vs US Dollar”

After completing the wave [e] of the horizontal triangle 4, the AUD/USD pair resumed falling.  Consequently, to confirm a new decline, the market has to form the descending impulse in the wave (i) during the next several days.

As we can see at the H1 chart, the pair is about to complete the third wave of the wave (i). As a result, in the nearest future the market may be corrected in the iv, which may be later followed by a new descending movement.

RoboForex Analytical Department

Article By RoboForex.com

Attention!
Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.