InvestMacro

By Orbex

The simple answer is no, not by a long shot. But given the media coverage, it can certainly feel like it.

There are a lot of factors conspiring to make this outbreak seem especially bad. For one, it has been quite some time since the world has experienced a major outbreak.

Prior to 1900, it was relatively difficult for diseases to spread as broadly and quickly as they do today.

However, thanks to modern transportation, global pandemics can now develop relatively quickly.

We also have to consider that there are personal, political and monetary interests behind making the COVID-19 outbreak as scary as possible.

The media, vying for views, is apt to present a more worrying narrative. Politicians, on the other hand, see it as an opportunity to increase spending. And, people, in general, can get a lot of attention by sharing the scariest posts on social media.

It’s a Concern, Not the End of the World

The reality is that this is not an exceptionally deadly virus outbreak. In fact, it isn’t even the first coronavirus outbreak, nor the deadliest of the coronavirus outbreaks.

However, precisely because it’s less deadly, it might be more dangerous and harder to control.

The official designation for the current outbreak is COVID-19, but the virus itself is SARS-Cov-2. Sound familiar?

Yep, this is another strain of the SARS (Sudden Acute Respiratory Syndrome) outbreak from 2002-03. That outbreak had a mortality rate of nearly 10% and was contained relatively quickly, with just over 8K people being infected.

Historic Cases

Many have drawn parallels between this outbreak and prior viral pandemics. One that is often referenced is the 1918 “Spanish flu” which ravaged the world at the conclusion of WWI.

About a quarter of the world’s population was infected, with around 50 million deaths.

The Spanish flu actually originated in China, but it’s a completely different virus than the current pandemic: influenza.

Influenza is a seasonal infection that kills around 250,000 people around the world each year. The 1918 pandemic wasn’t an especially deadly virus. However, the lack of hygiene, malnourishment, and the spread of bacteria all contributed to so many people dying.

Wash Your Hands

That last point is one of the leading reasons that we haven’t had a major pandemic in a relatively long time.

Regular hygiene helps prevent the spread of deadly viruses and secondary bacterial infections which might come later.

When thinking of pandemics, some could have the “black” or bubonic plague in mind. However, the cause of the plague was bacterial, not viral. There was also cholera, which has claimed more lives than most viral outbreaks. However, that too is bacterial.

The Worst of the Worst

The viral outbreak that many people don’t think of as one of the worst in history is the smallpox outbreak in the Americas following contact with Europeans.

Estimates range to up to 90% of the population succumbing to the disease and killing well over 100 million people.

Despite the lethality of smallpox, it has been virtually eradicated from the world thanks to vaccination.

This brings us to how we hope to deal with the current pandemic. The idea is to try and contain the spread long enough for a vaccine to be developed.

There are over 100 institutions in the world currently trying to develop a vaccine. When one is finally proven to be effective, that likely will be the definitive end to coronavirus fears.

By Orbex

By Orbex – FX traders that can’t identify candle formations or candlestick patterns, fail to understand price action.

Of course, there are many candles formations and patterns to learn. However, there are only a few that carry as high an accuracy rate as the Cup & Handle pattern does.

The Cup and Handle Pattern is one of the rarest patterns traders can spot. It is also one of the highest probability patterns, and forex traders shouldn’t ignore it!

Once spotted, due to its very rare occurrence, it provides one of the best FX trading opportunities.

What Are The Characteristics Of A C&H Pattern

Just like the name suggests, a completed pattern looks like a cup, with a handle. It is a trend continuation pattern and its formation starts when prices register a fresh high.

The characteristic of its formation and visibility are as follows.

The Cup

Swing high: After price finds a temporary top, it starts to fall sharply in a short amount of time.

Retracement low: The price then retraces lower and forms a fresh bottom, where it’s expected to somewhat stabilize.

Revisiting swing high: After consolidating in a tight range, the price starts to trend back higher. This rally up north more or less mirrors the pace and proportion of the initial decline. However, it’s not necessarily forming a double top. The price ends up reaching at or around the initial peak high prior to the decline.

This whole price movement depicts an easily spotted cup on the charts.

The Handle marking top: After marking the second swing high, price starts to fall to the downside. However, in the handle formation, the range and duration of the drop are limited when compared to the Cup. While falling, it puts in a pattern that resembles the bull flag pattern.

Sloping decline: The downward biased price action should not weaken lower than a third of the Cup’s range. The quicker the bull flag formation is done, the stronger the breakout is likely to be on the upside. In case of price action weakening more than 50% of the Cup’s range, then the accuracy of the C&H pattern wears off.

Ways To Trade The Cup & Handle

There are 2 key ways to trade the Cup & Handle Pattern; aggressively or conservatively.

Aggressive FX traders take positions following an immediate handle breakout, or when the bull flag becomes vividly visible.

There is, of course, a downfall when trading aggressively. Usually, these turn out to be false breaks, so the impending breakout turns out to be just a triple top; a failed attempt to move beyond the top of the C&H pattern.

Conservative forex traders, on the other hand, wait for a valid breakout before entering into a trade. This means the trade should be taken at least following a successful candle close. Of course, there are more conservative traders who would not only wait for a successful candle close but also wait for a retest.

Tips You Should Not Ignore

The largest time frames like the daily or the weekly work best for the C&H pattern. This, of course, is valid for all assets, patterns or formations.

Larger time frames are more fruitful when trading C&H pattern in particular because when identified, the trend can continue for long periods of time. However, this will also depend on the signs of strength the initial breakout registered.

Now, when adding that market observers suggest that the majority of the C&H patterns are formed in the stock markets, you have to allocate a good amount of time ahead in order to look at your charts.

By Orbex

By Orbex

The current USDCNH wave structure suggests that we are at the beginning of a new bullish trend. This is likely to be a 5-wave impulse move consisting of primary waves ①-②-③-④-⑤.

With waves ① and ②completed, we can now expect the intermediate wave (1) to form a new high.

Intermediate wave (1) consists of five minor sub-waves. All minor waves, apart wave 4 and 5, have been completed.

When PA forms minor wave 4, we could then see minor 5 breaking new highs above 7.057. That is, above the previous high formed by primary wave ①.

An alternative view suggests that the bearish primary wave ② isn’t completed yet. The bearish pattern reminds a zigzag that consists of intermediate sub-waves (А)-(В)-(С).

In the scenario this structure is correctly identified, we can expect to see a decline in wave (C) towards the 6.905 region.

By Orbex

By Orbex

Gold

The yellow metal has reversed sharply from new highs this week, initially benefiting from the deeper collapse in risk appetite. This has seen equities and commodities prices cratering lower.

However, as the global response to the coronavirus crisis intensifies, and with cross-market assets plunging, gold was unable to escape the pervading sense of doom gripping traders this week. On Thursday, we saw gold experiencing its largest one-day drop since April 15^th, 2013.

The central bank reaction function has kicked swiftly into place with many in the G10 bloc cutting rates. However, with the ECB opting to expand its asset purchases program along with reducing rates on credit funding to banks, there was an air of disappointment. This also reflected in the gold price reaction on Thursday.

For now, the situation remains incredibly volatile. As the UK and US both highlight plans for severe lock-downs, along with major cultural events around the world being canceled due to the virus, it is likely that we continue to see wild swings across the metals complex.

Technical Perspective

The reversal in gold prices this week has seen the market collapsing from above the 1689.33 level to touch the 1555.38 level. This level has, so far, found demand, keeping gold prices underpinned for now. While price holds above here, some consolidation and correction are likely. However, the outlook remains difficult and a further drop cannot be ruled out.

Silver

Matching the moves seen in gold this week, silver prices were heavily lower. Fears over the extent of the slowdown in China, which accounts for a large portion of silver’s industrial demand, are keeping the near term outlook tilted heavily lower.

As equities prices continue to plunge, the drop in industrial indexes is also weighing heavily on silver due to that same loss of demand globally. Traders will now have to wait and see if recent central bank action starts to provide any relief. Looking ahead, though, the weekend provides heavy gap risk once again for the Sunday open.

Technical Perspective

Silver prices have now dropped firmly below the 16.5288 level support and have traded as low as just below the 15.5528 level. However, as of writing, price has reclaimed the level and is now sitting back up above.

While we hold here, consolidation is likely as the market digests the last plunge lower. A further break, however, will put the focus on a test of the rising trend line next.

By Orbex

By Admiral Markets

Source: Economic Events March 13, 2020 – Admiral Markets’ Forex Calendar

Given the massive volatility in US yields, and knowing the high positive correlation between US yields and the USD/JPY, high volatility in the currency pair over the last few days does not come as a big surprise.

In fact, we expect volatility to stay very high, especially if we get to see sharper moves in US yields, potentially driven by surprising US economic data sets.

According to the Fed Watch Tool, market participants expect the Fed to cut rates by another 75 basis points by next Wednesday, and the impact of today’s Michigan Consumer Sentiment seems limited on US yields and thus also the USD/JPY.

But a print below 95 points could add further fuel to current US recession fears, push US yields lower, and drive the USD/JPY lower, too.

On the other hand, forex traders should keep an close eye on the BoJ and any comments which may make it over the news ticker: any verbal intervention from the BoJ e.g. openly expressing concerns over instability in Japanese financial sector and economy, warning between the lines that an intervention from the BoJ might be on its way, could see a sharper push higher in the USD/JPY above 105.00 and probably as high as 106.50.

Still and overall, we remain bearish towards the currency pair, and see with a next wave of risk off hitting the markets and a push lower in US yields, at least a re-test of the recent lows around 101.50 as a serious option:

Source: Admiral Markets MT5 with MT5-SE Add-on USD/JPY Daily chart (between 03 January 2019 to 12 March 2020). Accessed: 12 March 2020 at 10:00 PM GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.

In 2015, the value of the USD/JPY increased by 0.5%, in 2016, it fell by 2.8%, in 2017, it fell by 3.6%, in 2018, it fell by 2.7%, in 2019, it fell by 0.85%, meaning that after five years, it was down by 9.2%.

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By Admiral Markets

By Orbex

Euro Slips as ECB Fails to Deliver – Is the Uptrend Over?

The euro fell as much as 1.78% intraday on Thursday. This follows the ECB meeting where interest rates were left unchanged. However, the ECB did announce stimulus measures.

Investors were clearly disappointed pushing the euro to retrace nearly half its gains from earlier. Price is currently testing the major trend line. We expect a modest rebound which may keep prices limited to the 1.1200 handle for the moment.

Sterling Slips to a 5-Month Low to the Dollar

The pound sterling gave up the gains and fell sharply on Thursday. This coincides as neighboring Ireland and Scotland announced new measures to tackle the COVID-19 pandemic.

GBPUSD is down over 2.18% and is more pronounced compared to the BoE decision on Wednesday. Price is trading at 1.2585 and is threatening to break down lower. A break of this floor could open the way for a drop to 1.2200.

WTI Crude Oil Stuck in a Range Amid Uncertainty

Crude oil prices are steadily declining after the recent rally to the 35.00 handle. Price action is in a steady short term decline. However, the momentum to the downside is starting to slow.

Going by the Stochastics oscillator, we could expect a possible attempt for a retest of the 35.00 handle. While to the downside, the previously established floor at 28.00 remains within reach. Given the market conditions, it would be a bit too early to call the direction in WTI crude oil prices.

XAUUSD Back at Familiar Support – But Will it Hold?

Gold prices fell sharply on Thursday, down over 3%. This comes after price broke below the initial support level at 1631.90. There was a brief momentum when gold was poised to pullback. However, the failure at 1631 saw prices dropping down to 1594 and lower.

Currently, gold prices are testing the previous support at 1572 – 1568 region. So far, this level looks to be holding out. But a break down from here could put 1500 within reach.

By Orbex

Article By RoboForex.com

EURUSD, “Euro vs US Dollar”

After reaching the first downside target at 1.1060 without forming any corrections, EURUSD has formed the ascending impulse; right now, it is consolidating around 1.1176. Possibly, the pair may break the range to the upside and continue the correction towards 1.1298.

GBPUSD, “Great Britain Pound vs US Dollar”

After breaking 1.2766, GBPUSD has reached 1.2556; right now, it is consolidating around the latter level. Possibly, today the pair may expand the range down to 1.2455 and then start another correction to return to 1.2766. Later, the market may resume falling with the target at 1.2246.

USDCHF, “US Dollar vs Swiss Franc”

USDCHF has finished the first descending wave at 0.9550; right now, it is correcting towards 0.9375. Later, the market may start a new growth with the target at 0.9600.

USDJPY, “US Dollar vs Japanese Yen”

USDJPY is growing with the short-term target at 108.60. Today, the pair may break 105.90 to the upside and then reach 107.07. After that, the instrument may form a new descending structure towards 106.00 and then resume trading upwards to reach the above-mentioned target.

AUDUSD, “Australian Dollar vs US Dollar”

After completing another descending wave at 0.6222, AUDUSD is forming the first impulse to the upside. Possibly, the pair may reach 0.6385 and then fall towards 0.6300, After that, the instrument may resume trading upwards with the target at 0.6500.

USDRUB, “US Dollar vs Russian Ruble”

USDRUB has finished another ascending structure to reach 75.45; right now, it is falling towards 72.60. Later, the market may start another growth to reach 74.04 and then form a new descending structure with the short-term target at 70.60.

USDCAD, “US Dollar vs Canadian Dollar”

After completing the correction at 1.3700, USDCAD has broken the high at 1.3832; right now, it is still growing. Today, the pair may test the broken high from above and then form one more ascending structure with the short-term target at 1.4040.

XAUUSD, “Gold vs US Dollar”

After forming a downside continuation pattern around 1638.98 and broken it downwards, Gold has completed the descending wave at 1555.55. Possibly, today the pair may form one more ascending structure to reach 1594.22. In fact, the instrument is expected to start a new rising wave with the target at 1768.50.

BRENT

Brent continues falling; right now, it is consolidating below 32.00. According to the main scenario, the price is expected to break the range to the upside and grow to reach 35.60. Later, the market may break this level as well and then continue trading upwards with the first target at 39.44. .

BTCUSD, “Bitcoin vs US Dollar”

Earlier, BTCUSD broke 7300.00 and fell towards 5900.00. Today, after forming the consolidation range around this level and expanding it down to 3900.00, the price has finished the ascending impulse towards 5600.00 along with the correction at 4800.00. The main scenario implies that the instrument may form the second ascending impulse to reach 6600.00 and then start a new correction towards 5700.00. After that, the pair may resume trading upwards with the first target at 7600.00.

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 JustForex

The US dollar is recovering against a basket of major currencies. The dollar index (#DX) closed in the green zone (+1.01%). The US currency was supported by the fact that yesterday the US Federal Reserve tried to stop the market collapse by offering short-term loans $1.5 trillion worth. Also, the regulator gave a signal about the so-called start of a new wave of quantitative easing. In turn, investors also expect another reduction in the Fed interest rate.

The ECB has approved fresh stimulus measures and temporarily reduced capital requirements for banks to help the Eurozone cope with the crisis. The central bank increased its quantitative easing program by €120 billion by the end of the year. Also yesterday, the ECB decided on the interest rate. As experts forecasted, the regulator left interest rates unchanged.

The “black gold” prices are recovering after a significant collapse at the beginning of the week. Currently, futures for the WTI crude oil are testing the $33.10 mark per barrel. At 19:00 (GMT+2:00), Baker Hughes US rig count will be published.

Market indicators

Yesterday, there were aggressive sales in the US stock market: #SPY (-9.57%), #DIA (-10.06%), #QQQ (-9.17%).

The 10-year US government bonds yield rose slightly. At the moment, the indicator is at the level of 0.85-0.86%.

• – Michigan consumer sentiment and expectations at 16:00 (GMT+2:00).

by JustForex

Article By RoboForex.com

BTCUSD, “Bitcoin vs US Dollar”

As we can see in the daily chart, Bitcoin is totally dominated by bears; the pair has completed such a strong descending impulse that it has reached all important downside targets along with the post-correctional extension area between 138.2% and 161.8% fibo at 4890.00 and 3925.00 respectively. At the moment, the instrument may start a pullback, but the next downside target may be the long-term fractal low at 3121.90.

In the H4 chart, the pair is correcting after reaching the post-correctional extension area between 138.2% and 161.8% fibo at 4890.00 and 3925.00 respectively. The price is growing towards 23.6% fibo at 5171.00 and may later reach 38.2% and 50.0% fibo at 5945.00 and 6568.00 respectively.

ETHUSD, “Ethereum vs. US Dollar”

As we can see in the daily chart, the descending wave has tested the psychologically important support at 100.00. In the nearest future, ETHUSD may correct. However, after the correction, the pair may continue falling towards the long-term low at 80.86, as well as the post-correctional extension area between 138.2% and 161.8% fibo at 50.30 and 9.80 respectively.

In the H4 chart, the pair is correcting after reaching 89.98. The price is getting close to 23.6% fibo at 128.00 and may later reach 38.2% and 50.0% fibo at 152.17 and 170.82.

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 JustForex

The EUR/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.12607
• Open: 1.11739
• % chg. over the last day: -0.76
• Day’s range: 1.11522 – 1.12212
• 52 wk range: 1.0879 – 1.1572

A bearish sentiment prevails on the EUR/USD currency pair. The trading instrument has updated the local lows. Yesterday ECB kept the base interest rate on loans at zero level, the rate on deposits at -0.5%. The regulator will increase the asset buyback program by 120 billion euro by the end of 2020. Investors continue to assess the risks of COVID-19 virus spread and its impact on the global economy. At present, EUR/USD quotes are consolidating in the range of 1.11550-1.12500. The EUR can decline further. Open positions from key levels.

The Economic News Feed for 13.03.2020:

• – US export and import price indices – 14:30 (GMT+2:00);
• – Consumer expectations and sentiment indices from the University of Michigan – 16:00 (GMT+2:00).

The indicators signal the sellers’ power: the price has fixed below 50 MA and 100 MA.

MACD histogram is in the negative zone, but above the signal line, which gives a weak signal to sell EUR/USD.

The Stochastic Oscillator is located in the overbought zone, the %K line crossed the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.11550, 1.10700, 1.10000
• Resistance levels: 1.12500, 1.13250, 1.13650

If the price fixes below 1.11550, expect further decline toward 1.11000-1.10500.

Alternatively, the quotes could grow toward 1.13000-1.13500.

The GBP/USD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.28194
• Open: 1.25656
• % chg. over the last day: -1.94
• Day’s range: 1.25075 – 1.25839
• 52 wk range: 1.1959 – 1.3516

Aggressive selling is observed on GBP/USD currency pair. Since the beginning of this week the drop in quotes has exceeded 550 points. At the moment the sterling has stabilized. The local support and resistance levels are 1.25000 and 1.26300, respectively. The trading instrument has potential for further decline. We recommend opening positions from key levels.

The news background on the British economy is calm.

The indicators signal the sellers’ strength: the price has fixed below 50 MA and 100 MA.

The MACD histogram is in the negative zone, which indicates a bearish sentiment.

The Stochastic Oscillator is in the neutral zone, the %K line has crossed the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 1.25000, 1.24000
• Resistance levels: 1.26300, 1.27450, 1.28500

If the price fixes below the round level of 1.25000, expect a further decline toward 1.24000-1.23500.

Alternatively, the quotes could grow toward 1.27400-1.28000.

The USD/CAD currency pair

Technical indicators of the currency pair:

• Prev Open: 1.37748
• Open: 1.39172
• % chg. over the last day: +0.05
• Day’s range: 1.37748 – 1.39172
• 52 wk range: 1.2949 – 1.3566

USD/CAD currency pair has stabilized after a long rally. At the moment, the CAD is consolidating. Local support and resistance levels are at 1.38400 and 1.39500, respectively. Technical correction of the trading instrument is not ruled out in the nearest future. We recommend you to pay attention to the dynamics of oil prices. Open positions from key levels.

Publication of important economic releases from Canada is not planned.

The indicators indicate the power of buyers: the price has fixed above 50 MA and 100 MA.

Histogram of MACD is in positive zone.

The Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates a possible correction of the USD/CAD currency pair.

Trading recommendations

• Support levels: 1.38400, 1.37100, 1.36200
• Resistance levels: 1.39500, 1.40000

If the price fixes above 1.39500, expect a rise to 1.40000-1.40300.

Alternatively, the quotes could correct toward 1.37600-1.37000.

The USD/JPY currency pair

Technical indicators of the currency pair:

• Prev Open: 104.423
• Open: 104.733
• % chg. over the last day: +0.21
• Day’s range: 104.585 – 106.011
• 52 wk range: 101.19 – 112.41

The USD/JPY currency pair has an ambiguous technical pattern. The trading instrument is in a flat. At the moment the safe haven currency is testing the round level of 106.000. 104.500 is the nearest support. USD/JPY can still recover. We recommend you to pay attention to the dynamics of the US government bonds yield. Open positions from key levels.

During the Asian trading session, there was a weak release on business activity in the service sector.

The indicators signal the power of buyers: the price has fixed above 100 MA.

The MACD histogram is in the positive zone, which indicates a correction of the USD/JPY currency pair.

The Stochastic Oscillator is in the neutral zone, the %K line crossed the %D line. There are no signals at the moment.

Trading recommendations

• Support levels: 104.500, 103.200, 102.000
• Resistance levels: 106.000, 107.000, 107.700

If the price fixes above 106.000, expect the quotes to grow toward 107.000-107.700.

Alternatively, the quotes could descend toward 103.500-103.000.

by JustForex