Liste der besten 5 Forex Broker 2019 - Ehrlicher Vergleich ...

Euro and ‘fun isolation’. Forecast as of 12.11.2020

Euro and ‘fun isolation’. Forecast as of 12.11.2020
The history repeats. In late spring-early autumn, the S&P 500 pushes the EURUSD up. The same could occur in the rest of 2020. Let us discuss the Forex outlook and make up a EURUSD trading plan.

Monthly euro fundamental forecast

I have often mentioned that the fourth quarter should be similar to the second, although the disaster should be less dramatic. This is evident from economic data, which suggests the current restrictions hit the euro-area economy. However, the damage is far less than it was during the previous lockdown. People continue going to work, manufacturing operates, and the government restricts entertainment and retail trading. The so-called ‘fun isolation’ suggests that vaccines' introduction will allow the euro-area economy to recover soon. This fact lets me hope that the EURUSD correction won’t be deep.
Of course, the ECB would like the euro to cost as little as possible, which will support exports and accelerate inflation. In her recent speech, Christine Lagarde highlighted the effectiveness of the Pandemic Emergence Purchase Program (PEPP) and anti-crisis long-term refinancing operation (LTRO). This was a clear signal that both of them will be expanded in December. On the other hand, the ECB president did not say anything about interest-rate changes. It is quite possible that by increasing the scale of QE, the ECB will cause the same reaction in EURUSD as the Bank of England did by its similar actions. Remember, the pound rose in response to the BoE monetary easing in November.

Dynamics and structure of ECB assets


https://preview.redd.it/g309gkp0cty51.jpg?width=576&format=pjpg&auto=webp&s=a7f25d34d6feb075e8e00e412ac7f07fe94005c9
Source: Bloomberg
But still, the primary growth driver for the EURUSD is not the liquidity trap suggesting lower efficiency of the stimulating measures as their volumes increase and inadequate response of the regional currency. That is the rally of the US stock indexes, which supports the euro. Yes, the S&P 500 growth on November 9 unexpectedly supported the dollar. But this situation resulted from the realization of the investment idea of Biden’s victory in the US presidential election. The correlation between the US stock market and the EURUSD should soon restore, which could encourage the euro bulls to go ahead.
The record stimuli as the response to the recession have poured a huge amount of money into the financial system. Ahead of the elections, investors preferred to hold cash because of uncertainty. Now, that money goes back into the market. Amid positive news about vaccines, the S&P 500 rallies thanks to traditional industries, including industry and banking. As soon as there are talks about a long vaccine introduction process, the stock market is still rising. This time thanks to the tech stocks.

Monthly EURUSD trading plan

The current situation looks like that of the second quarter when the US and the euro-area economies slid down into recession, and the S&P 500 was growing. Investors expected the recession to end soon, and the GDP recovery to be V-shaped. The same is now. It will take a long time to introduce the COVID-19 vaccine after it has been approved. However, the stock indexes are rallying up, suggesting purchases of the EURUSD if the price closes above 1.18 and 1.1845. Otherwise, the US stock market correction will send the euro down to $1.172 and $1.167.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-and-fun-isolation-forecast-as-of-12112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar looks for benefits. Forecast as of 13.11.2020

Dollar looks for benefits. Forecast as of 13.11.2020
Investors wonder if it is relevant to sell the greenback as a safe haven or to buy because the US economy performs better than the euro-area. Therefore, the EURUSD tends to consolidate. Let us discuss this and make up a trading plan.

Weekly US dollar fundamental forecast

The market is like an ocean; the calm follows the storm. But calm sometimes is anxious; investors can’t define the further trend direction. Investors start exiting longs on the US stocks amid the record number of hospitalizations in the USA. Besides, the number of new COVID-19 cases is above 100,000 per day during nine consecutive days, and some US governors impose new restrictions. Another strict lockdown will hardly occur, but local isolation will result in job losses and an economic downturn. The EURUSD bulls will lose the major benefit if the S&P 500 fails to continue the rally.
The euro is supported by easing the market uncertainty and the hope for the global GDP recovery amid the vaccination. The US dollar could benefit from the divergence in economic expansion and monetary policies. According to 90% of 65 Wall Street Journal experts, the financial markets' uncertainty will ease as the US voting results are announced, and there is positive news about the vaccines. 80% of specialists expect the market to stabilize soon. According to Christine Lagarde, the ECB sees far less uncertainty than before amid Joe Biden's victory, progress on Brexit, and successful vaccine tests. The more clarity there is in the market, the less reason to buy safe-haven assets, including the US dollar.
On the other hand, the greenback should benefit from US economic performance. According to Wall Street Journal experts, the euro-area economy is likely to face a double recession while the US economy will show better results than earlier expected. The US GDP should contract by 2.7%, compared to the previously expected drop of 3.6%. The unemployment rate will drop to 6.7%, not to 7.8%. The risk of another downturn within twelve months has been significantly down.

Dynamics of risk of US economic recession


Source: Wall Street Journal
The forecasts of experts look optimistic, but the pandemic does not end. Jerome Powell warns that the next few months will be tough for the United States and that it is too early to assess the impact of vaccine news on the economy's development. New restrictions can discourage those who think the glass is half full.
If the greenback loses the advantage of growth divergence, it may benefit from underestimating uncertainty. There are more than enough reasons for uncertainty growth. It is not known whether Washington's attitude towards Beijing will soften under Biden. It is unknown if Democrats and Republicans will find common ground over the fiscal stimulus. 58% of Wall Street Journal experts expect the stimulus of $1 trillion -$2 trillion, 29% expect less than $1 trillion, 13% predict a stimulus package of $2.1 trillion -$3 trillion.

Weekly EURUSD trading plan

Therefore, some benefits of the US dollar have exhausted, some still work. That is why the EURUSD trend is not clear. If the pair breaks out the resistance at 1.1845, the bulls should go ahead. On the other hand, if the price goes below the support at 1.176, the bears can take control.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-looks-for-benefits-forecast-as-of-13112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar is set back by euphoria. Forecast as of 09.11.2020

Dollar is set back by euphoria. Forecast as of 09.11.2020
Investors continue trading the idea of Joe Biden becoming the president. That is why the S&P 500 features the best weekly rise since April and pushes the EURUSD up. How long will it continue? Let us discuss the Forex outlook and make up a EURUSD trading plan.

Weekly US dollar fundamental analysis

Euphoria rules the market. Investors forgot about both COVID-19, the US fiscal stimulus's unsettled issue, and Donald Trump rejecting the voting results. Traders are satisfied with the less uncertainty around Joe Biden’s policy, hoping for lower volatility. Analysts suggest that the divided Congress won’t allow Biden to carry out radical reforms in tightening taxation and regulation of technology companies. As a result, the S&P 500 grew by 7.3% in the first week of November, and the USD dropped to the lowest level since early September.
How long will the euphoria last? History proves that starting from 2000, if the S&P 500 was growing on election day, it continued growing in November and December. The first years of presidential terms were also favorable for the US stock indexes. The S&P 500 grew by 18.6% on average. However, the stock indexes’ trends during the time of the divided Congress, which prevented the White House from carrying out radical reforms, were controversial. During 45 years, starting from 1928, when one party controlled the US government, the stock market rose at an average rate of 7.46% annually, up from 7.26% in 46 years when the power was divided.

Reaction of S&P 500 to the political situation in USA


Source: Wall Street Journal
In my opinion, the markets are going too fast. Investors want to join the stock market’s uptrend, forgetting about the negative. However, are some negative factors that should have their effect. First, political uncertainty continues. Donald Trump is challenging the election results. Because of the second round of voting in Georgia, we will know the partisan makeup of the U.S. Senate only on January 5. It creates obstacles to the agreement on the new fiscal stimulus. Until a fresh stimulus is provided, the US economy will be slowing down, which presses down both the global GDP and the risk appetite.
Second, the coronavirus vaccines haven’t yet been developed, and the COVID-19 pandemic continues in the USA and in the euro area. The numbers of new coronavirus cases, hospitalizations, and deaths are hitting all-time highs, so investors’ optimism is surprising. The epidemiological situation in Europe is deteriorating. France, Germany, and other countries are locked down. This fact suggests that the divergence in the economic growth and monetary policy is in favor of the EURUSD bears.
Finally, the U.S. dollar may not be falling amid the growth of the S&P 500. The negative correlation between stocks and the USD is the strongest at the time of uncertainty, also because of the US presidential election. Once uncertainty eases, the negative correlation should stop working.

Weekly EURUSD trading plan

Euphoria rules the market, but it can’t last for long. If the EURUSD bulls fail to hold the price above 1.188, the pair should roll down to 1.183 and 1.1785. Otherwise, if the resistance is held up, the euro could continue the rally up to $1.195-$1.196 and even $1.2. Next, large traders should take some profits and exit the longs.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-is-set-back-by-euphoria-forecast-as-of-09112020/?uid=285861726&cid=62423

submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar smiles again. Forecast as of 11.11.2020

Dollar smiles again. Forecast as of 11.11.2020
While the EURUSDbulls wonder why the price isn’t rising, the bears see the reasons for a deeper correction. What’s next? Let us discuss the Forex outlook and make up a EURUSD trading plan.

Monthly US dollar fundamental forecast

It is impossible to predict market trends. The market is unpredictable; it can always surprise us. The EURUSD bulls are surprised because the pair doesn’t grow. There should be several reasons for the euro growth. Joe Biden has won the US presidential election; there is positive news about the COVID-19 vaccines. Investors should have started selling the dollar. However, the greenback remains strong, encouraging traders to buy the USD.
Jefferies notes that the USD closed in the red zone six months out of the last seven, having been down by 11%. The dollar’s surge on November 9 proves that most of the negative had been priced in the quotes, and the greenback will hardly start falling now. The central bank in Europe and Asia, which compete with the Fed, are willing to provide an extra monetary stimulus, which is a bearish factor for their local currencies. Jefferies sees the EURUSD falling to 1.14 as the dollar smile theory is popular again. It suggests the USD should strengthen at the final, third stage of the economic cycle because the US GDP outperforms the global peers.
Even though the next two quarters, according to the President of the Federal Reserve Bank of Dallas Robert Kaplan, will be tough for the US, it should demonstrate robust growth in 2021. Unlike Europe, the USA does not impose a lockdown, and the restrictions introduced in the euro-area countries are costly. For example, each month of helping businesses and workers in Italy affected by COVID-19 will cost Rome €10 billion. If the restrictions last through March, it will cost €40 billion - €50 billion, or 3% of GDP. Furthermore, the PMIs and other indicators are falling, which is confirmed by a decrease in the ZEW Indicator of Economic Sentiment for Germany to the lowest level since April.

Dynamics of German economic sentiment index


Source: Bloomberg
The epidemiological situation in the euro area deteriorates. The ECB estimates that one in seven workers in Spain is associated with a business at risk of collapse, which compares with 8% of employees in Germany and France, and 10% - in Italy. The divergence in economic growth is in favor of the USA, which presses down the EURUSD.
And what about Biden’s victory and coronavirus vaccines? I believe the first driver has already worked out, which is evident from the euro drop on November 9. There is still much uncertainty around vaccines. Nobody can say how quickly they will be introduced and how long the immunity will last. The market needs time. The US stock indexes could be overvalued and will be unstable in the next few weeks. Besides, the positive news about COVID-19 vaccines will give Republicans a reason to delay or adopt a smaller fiscal stimulus than previously anticipated.

Monthly EURUSD trading plan

The euro should be strong in the long-term outlook, but it should weaken in the short term. Under such conditions, one could buy the EURUSD at the breakout of the resistance at 1.192. It will be relevant to sell the euro-dollar if the price breaks out the support at 1.179.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-smiles-again-forecast-as-of-11112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Gold pays the debts back. 10.11.2020

Gold pays the debts back. 10.11.2020
Many bullish factors are already price in the XAUUSD. The hope for the global economic recovery as vaccines are being developed encourages speculators to exit gold longs. Let us discuss gold prospects and make up a XAUUSD trading plan.

Monthly gold fundamental forecast

Gold is rolling down, and my forecast comes true. Just a few days ago, I recommended selling gold on the rebound from the resistance at $1965. Gold has been more than 5% down, and one could have made quite a lot of money on this strategy. Most of the positive factors have already been priced in the XAUUSD. The good news about COVID-19 vaccines has crashed the gold prices.
Gold trades could face the same situation as it was in 2011. 9 years ago, the global economy was recovering after the recession; massive fiscal and monetary stimuli weakened the world’s major currencies and fueled up inflation expectations, which was a bullish factor for the XAUUSD. However, consumer prices grew very slowly, and the gold uptrend broke down. In 2020, the hopes for the expansion of financial aid to at least $2 trillion encouraged the gold bulls to go ahead. Nonetheless, the divided congress and the information about vaccines set the gold buyers back.
The gold uptrend seemed to base on a strong foundation. The monetary stimuli now are the biggest ever, which boosts the central banks’ balance sheets, weakening the global currencies and increasing the volume of negative-yielding bonds up to a record high of $17.05 trillion.

Dynamics of central banks’ balance sheets


Source: Wall Street Journal

Dynamics of volumes of bonds with negative yields


Source: Bloomberg
Nonetheless, the situation cannot be stable by its nature, and it is going to change.
First, grate money supplies provided by central banks turned out into a liquidity trap. Additional monetary stimuli won’t be as effective as they used to be. It is evident from the reaction of the Australian dollar and the British pound to the monetary easing performed by the RBA and the BoE. These currencies strengthened, though they should have weakened under normal conditions. Regulators are more likely to change the structure of the QE rather than the volumes. The balance sheets should not increase as fast as before.
Second, Joe Biden’s victory along with the divided Congress lowers the chances of a massive fiscal stimulus. The gold bulls’ hopes for the reflationary policy, which could have been performed along with the presence of the ‘blue wave’, haven’t met the reality. That is why the speculators are exiting the gold longs.
Finally, if the information about the effectiveness of the OCVID-19 vaccine is true, the global economic recovery will drive the global bond market rates up and encourage investors to sell off the XAUUSD. Gold uptrend might recover only if the dollar is weak, but that will hardly happen soon. The dollar should weaken against the euro only provided the EU cancels the restrictions.

Monthly gold trading plan

I recommend holding down the shorts entered at level $1965. It will be relevant to add up to the sell positions if the price fails to break out the resistance at $1900 and $1915 or tests the supports at $1875 and $1860.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/gold-pays-the-debts-back-10112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar is following its heart. Forecast as of 06.11.2020

Dollar is following its heart. Forecast as of 06.11.2020

Weekly US dollar fundamental analysis

Markets are just like people. They follow their hearts from time to time and forget about common sense. Investors like the idea of the division in the Congress and the Democratic president. In this scenario, the risks of tax hikes and high tech companies' strict regulation are much lower. This fact supports the stock indexes. The S&P 500 has been up by 1% and more during four consecutive trading sessions, which has been for the first time since 1982. In percentage terms, those days have been the best since early April. Markets consider Joe Biden to be a better president than Donald Trump, which allowed the yuan to gain back more than 50% of the losses faced during trade wars. The EURUSD tested the resistance at 1.186-1.187.
The growing chance of Biden’s victory encourages investors to spend the cash, which they have been accumulating ahead of the US presidential election. They are buying stocks and bonds. However, traders forget about other factors, such as the pandemic, uncertainty around the new fiscal stimulus, and Donald Trump’s willingness to reject the voting results. It looks like an attempt to give out desirable for valid. According to TD securities, there should not be any concerns about challenging the voting results, which has pushed the risky assets up and weakened the US dollar. DZ Bank believes that the greenback is falling because the voting results were reported earlier than some had expected. I do not think the above arguments to be strong.
I suppose traders are following their hearts. They invest the capitals in the securities as they worry not to miss the uptrend, which sends the S&P 500 up, fuels global risk appetite, and weakens the US dollar against a basket of currencies.

Dynamics of world's currencies versus the US dollar


Source: Financial Times
How long can it be going on? It depends. People in love are passionate during different periods. However, common sense should win sooner or later. The USA performs better than the euro area at the current stage of the economic cycle. The Fed is not willing to boost the monetary stimulus while the ECB tends to increase the current QE pace. According to Bloomberg’s leading indicators, the largest euro-area economies face a deeper drawdown in the PMIs because of the new lockdowns. The euro-area bond yields fall, which signals that the markets expect the ECB to take active measures in December.

Recovery of the world’s economies


Source: Bloomberg

Yields on the euro-area bonds


Source: Wall Street Journal

Weekly EURUSD trading plan

Let us be sensible during times of euphoria. Although the EURUSD has rebounded from the resistance at 1.186, the shorts entered in the zone seem vulnerable. It will be relevant to hold down the shorts if the pair goes below the support at 1.179. The S&P 500 rally could push the euro up above $1.188. The EURUSD medium-term outlook depends on whether the bulls can hold the price above 1.188.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-is-following-its-heart-forecast-as-of-06112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Yen places its opponent in check. Analysis as of 04.11.2020

Yen places its opponent in check. Analysis as of 04.11.2020

Monthly fundamental forecast for yen

While the greenback is waiting for the election's final results, trading currency cross rates may be worth considering. The US political landscape will undoubtedly affect most currencies, but the pandemic remains a weightier factor in Forex pricing in the medium and long terms. The strategies based on the divergence in epidemiological situations, economic growth, and monetary policies continue to yield profits. Another confirmation is the realization of the targets at 122.9 and 121.8 set in mid-October for shorts in the EURJPY.
COVID-19 hit Japan less than the eurozone: in terms of Coronavirus cases per 100,000, Japan is one of the countries that tackle the pandemic most efficiently, along with China, Taiwan, and South Korea. The situation in Belgium, Spain, and Italy looks gloomy, on the contrary.

Recession and pandemic


Source: Financial Times.
As a result, Europe is forced to introduce new restrictions, which will cut the eurozone's Q4 GDP by 2.3%, according to Financial Times. Thus, a double recession is certainly in the air. The organization of economic development and cooperation expects that the currency block's economy will reduce 7.9% in 2020, i.e., twice as much as during the previous global crisis. I dare suppose that the second wave may even downgrade those forecasts.
The BoJ expects that the Japanese GDP will fall by 5.5% by the end of the 2020/2021 fiscal year in March. Japan's economic loss doesn't look as significant as the eurozone's since the efficiency of anti-pandemic measures in Asia is higher than in Europe.

GDP dynamics

Source: Financial Times.
Christine Lagarde is sure the ECB will expand a monetary stimulus package in December as the coronavirus is spreading fast across Europe. Haruhiko Kuroda and his colleagues are ready to take action if necessary, but the BoJ's Head has not seen such a necessity so far. Both regulators got caught in a liquidity trap where softer monetary policies do not have any positive effect. Both agree to play currency wars, but the ECB's intentions are manifest, and the euro is therefore falling faster than other G10 currencies.

Monthly trading plan for EURJPY

The situation may seriously change soon: vaccines' development will support the global economic recovery and international trade, which is positive news for the euro. The European countries will lift restrictions, and Christine Lagarde's hints about QE expansion will remain mere hints. According to Governor of the Austrian National Bank Robert Holzmann, there is no point in increasing buy volumes as the inflation won't speed up anyway. Instead, a change in the QE program's structure must be in focus.
This scenario looks too optimistic, though. But why not hope for the best and use the EURJPY's drawdown to 120.65 for long-term buying?
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/yen-places-its-opponent-in-check-analysis-as-of-04112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Gold bulls will step back. Forecast as of 05.11.2020

Gold bulls will step back. Forecast as of 05.11.2020

Weekly fundamental forecast for gold

Gold, like most assets, lively reacted to the US presidential election. It first dropped amid the growing chance of Donald Trump’s victory; next, it resumed rising after the news about Biden’s likely victory. Gold follows Treasuries and greenback, so its short-term outlook is quite clear. Another matter is a more distant future.
The worst drop of Treasury yields over the past seven years has triggered the XAUUSD rally. If Biden could still become the President, the Democrats will hardly take the majority in the Senate. If so, the US government will hardly provide a massive fiscal stimulus. They will issue fewer bonds than it was earlier expected. Does it make sense to sell Treasuries in the secondary market?

Dynamics of US Treasury yield


Source: Wall Street Journal
Besides, the daily death rate of COVID-19 hits a record high; the number of infected people exceeded 600 thousand per day for the first time since the pandemic had started. Furthermore, some euro-area economies are locked down, the US economy has slowed down in the fourth quarter. Therefore, the Treasuries should continue falling. Nonetheless, the yield is at a level higher than that in summer, 0.6%, which signals that markets still expect a stimulus. Remember, gold can’t win over the income-generating assets, so the drop in Treasury yields is a bullish factor for the XAUUSD.
Gold should also benefit from a weaker dollar. The dollar is rising amid Trump’s success, and the chances for Trump’s reelection are going down. So, the USD is also going down. In fact, traders are working out the idea of the widening of the US twin deficit in the case of Joe Biden’s victory. Is there any use in trading based on a single idea? One had better focus on such factors as the leading pace of the US GDP compared to the euro-area growth, pressed down by lockdowns, and the continuing political uncertainty resulted from Trump’s willingness to reject the election results.

Dynamics of US budget deficit, % of GDP


Source: Financial Times
If the greenback starts rising, the gold rally will stop. Will the Fed’s pricing affect it? I don’t think the FOMC member would take active measures at the October meeting, as the voting results are still unknown. The Fed is likely to stick to its wait-and-see approach, going on with its vague speeches about the necessity of the fiscal stimulus and the US central bank’s willingness to take active steps if needed.
The uncertainty around the US presidential elections undermines the importance of not only the Fed’s meeting but also of the US jobs report. On the other hand, if it will be known who has won the elections by the time of the release of the US employment data, investors will consider the factor of the downturn in the US employment.

Weekly gold trading plan

Therefore, the greenback could soon start growing. If so, it should be relevant to enter short-term gold sell trades on the price rebound from the resistances at $1930-$1935 and $1965-$1970.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/gold-bulls-will-step-back-forecast-as-of-05112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Will Aussie repeat the hat trick? Forecast as of 03.11.2020

Will Aussie repeat the hat trick? Forecast as of 03.11.2020
The second quarter is likely to be the same as the second one. However, the disaster is not going to be so dramatic. If so, we have a pattern to trade the AUDUSD. Let us discuss the Australian dollar outlook and make up a trading plan.

Monthly Australian dollar fundamental analysis

What doesn't kill makes one stronger. The RBA’s monetary expansion should have crashed the Australian dollar. RBA not only cut the cash rate down to the all-time low of 0.1% but also boosted the purchases of assets with a maturity of 5-10 years within QE by AU$100 billion. The RBA has become one of the first to react to the second pandemic wave. However, the AUDUSD, instead of falling, surged up to the bottom of figure 71. Bloomberg experts anticipate such measures of the regulator, and the time for maneuver was not right. It is not wise to ease monetary policy on the day of the US presidential election, is it?
According to Philip Lowe, the increase of the QE size will support economic recovery amid lower costs of funding and exchange rate, as well as higher assets’ price than it would be in the opposite case. RBA must have tried to improve financial conditions, as the Fed did. It was one of the reasons for the US economic growth in the third quarter. In the fourth quarter, the US GDP should face a downturn because of the difficult epidemiological situation. Australia, on the contrary, has coped with the coronavirus through a strict lockdown in Victoria. So, Australia’s GDP can well go up.

Dynamics of COVID-19 cases in Australia


https://preview.redd.it/z0b18quhc0x51.jpg?width=629&format=pjpg&auto=webp&s=ed290b23768a625aba0bb3c0a891f975388ab309
Source: Trading Economics
According to the RBA forecasts, Australia’s GDP in the 2020/2021 financial year will expand by 6%, in 2021/2022 - by another 4%. The forecast for the unemployment peak has been cut from 10% to 8%. The core inflation will grow by 1% in 2021, and by 1.5% in 2022.
In addition to the domestic positive factors, foreign news also supports Aussie. Despite the disputes between Australia and China, which imposed tariffs on Australian barley, launched an anti-dumping investigation into Australian wine, and suspended imports of coal and lobsters from Australia, I believe that the trade relationships will be improved. China is the largest market for Australia. China’s economic growth by 1.9%, according to the IMF forecast, will support the AUDUSD bulls. Based on the yuan price changes, the AUDUSD looks undervalued.

Dynamics of AUDUSD and USDCNY


https://preview.redd.it/mqvioyaic0x51.jpg?width=634&format=pjpg&auto=webp&s=8db6d6a5debdaf671ce4902ce6fc43f2960f4ebb
Source: Trading Economics

Monthly AUDUSD trading plan

In general, market sentiment indicates that the fourth quarter for the global economy will be similar to the second one, although the disaster scale will be smaller. If so, we have a pattern to trade the Aussie. In late March, I recommended buying the Australian dollar in the range of $0.59-$0.62 amid the expectations of the V-shaped recovery of China’s economy, and this trading idea was winning. Now, there is another chance to repeat the hat trick provided that Joe Biden wins the election.
Biden also promises to attack China for its economic and human rights violations, the US-China relations are going to improve. As a result, the entire Pacific region will benefit. Australia, with its successful COVID-19 strategy, is no exception. If Biden wins, buy the AUDUSD with targets at 0.729 and 0.733.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/will-aussie-repeat-the-hat-trick-forecast-as-of-03112020/?uid=285861726&cid=62423

submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar caught a fish in dark waters. Forecast for 02.11.2020

Dollar caught a fish in dark waters. Forecast for 02.11.2020
The primary risk associated with the US presidential election is a possible election-related dispute. Furthermore, there are divergences in monetary policy and economic performance. So, the EURUSD is expectedly down. Let us discuss the Forex outlook and make up a EURUSD trading plan.

Weekly US dollar fundamental forecast

October has become the worst month for the US stock market since March. The bond market has experienced the worst drop since September 2018. In the last week of October, the S&P 500 sank 5.6%, while the Treasury yield rose to 0.858%. According to Bespoke Investment Group, this has only been 17 times since 1962, when the US Treasury yields rose along with the stock indexes’ drop. Investors believe that Joe Biden’s victory will result in the fiscal stimulus boost provided that the Democrats take control over the Senate. If it doesn’t happen, the extra stimulus package will hardly be accepted by Congress. Is it better to buy currencies, selling stocks and bonds?
The S&P 500 bulls hope for a “blue wave.” However, it doesn’t guarantee that the stock index will resume the uptrend. In 2016, the Wall Street experts predicted the US stock market to fall in case of Donald Trump's victory. At first, everything was going on as expected, but the stock indexes quickly recovered afterward. A wrong forecast cost George Soros $1 billion. And not only him.
Nobody wants to repeat the same mistakes, especially since the S&P 500 could continue correction, no matter who wins. The main source of uncertainty is Donald Trump’s willingness to challenge election results. As of October 31, nearly 90 million Americans already have cast their ballots, which is over 65% of the total votes from 2016. Donald accuses the Democrats of election fraud.
Uncertainty makes investors buy safe-haven assets. However, when the Treasuries are being sold off, investors tend to buy the US dollar. Besides, the growing yield-gap between U.S. and German government bonds sends the EURUSD down as well.

Dynamics of U.S.-Germany 10-year yield gap


Source: Bloomberg
Investors are selling the euro off amid the increase in the number of COVID-19 cases in Europe and the introduction of new restrictions by the euro-area governments. Although the euro-area economy grew by 12.7% and outperformed the U.S. growth in the third quarter, everything can radically change in the fourth quarter. The median estimate of 18 Financial Times experts suggests that the euro-area GDP will contract by 2.3% in October-December. At the same time, Oxford Economics predicts that the United States will expand by 3% over the same period. Divergence in economic growth sends the EURUSD down. Furthermore, there is also a divergence in monetary policies.

Dynamics of GDP


Source: Wall Street Journal
The ECB is willing to boost the monetary stimulus in December. 59% of analysts surveyed by Bloomberg believe that the Fed, on the contrary, won’t expand the assets purchases until the end of 2021. Working directly with the Federal Reserve, large banks do not expect any QE changes until the middle of next year.

Weekly EURUSD trading plan

Under such conditions, the EURUSD is likely to continue falling towards 1.16 and 1.154-1.156. The absence of the “blue wave” and/or Donald Trump’s rejection of the election results will suggest a deeper correction down.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-caught-a-fish-in-dark-waters-forecast-for-02112020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

The dollar spoiled it all. Forecast for 29.10.2020

The dollar spoiled it all. Forecast for 29.10.2020

Fundamental forecast for dollar for today

Donald Trump risks being remembered as a person who spoiled everything. He inherited a record-long employment growth streak, but in September, the indicator lacked 10.7 million people to equal February's values. He got a weak dollar and tried to make it even weaker to support US exporters. But in fact, the USD index has consolidated by 18% since Barack Obama's 2008 victory. Trump wanted to do his best to slow down China. Instead, he approached the moment when China's economy will outperform the US' one due to the difference in pandemic management approaches.
It's not surprising that ordinary Americans and financial markets have changed their attitude to the current president. He's losing to Joe Biden, and the S&P 500's fall on the eve of the election indicates the Republican's eventual defeat. According to Strategas Research Partners' study, the stock market has predicted election results right 20 out of 23 times since 1928. If it was growing one week before the elections, the party in power's candidate won in 86% of cases.

Trump's and Biden's ratings


Source: Financial Times.
The drowning Trump is catching at a straw. He says US GDP can grow over 30% in Q3, but obviously, the economy risks slowing down in Q4 amid fiscal stimulus exhaustion and epidemiological state worsening. According to Oxford Economics, the slowdown may go down to 3%.
Fears of the S&P 500's another collapse result in the US stock market sales and the USD consolidation. Investors consider the upcoming election to be the most uncertain ever, even more so because the White House current tenant may not recognize the results. One month ago, markets were sure restrictions would be targeted, yet they face a different picture in October.
The sharp growth of new cases in Europe forced Germany and France into closing bars, restaurants, and other service sector businesses. According to Bloomberg, that will cut French Q4 GDP by 0.8-2%.

COVID-19 cases in Europe


https://preview.redd.it/on6m9enan0w51.jpg?width=572&format=pjpg&auto=webp&s=999337fd49d52666d2e7cf67280f281306884fc4
The eurozone may face a double recession faster than the US, and the economic growth divergence is advantageous to EURUSD bears. The current correction now looks reasonable, and even more so because the pandemic's spread urges on the ECB. Bloomberg's experts expected the ECB would expand QE in December, but now no one can tell for sure it won't do that on 29 October.

Trading plan for EURUSD for today

Fundamentally, the main currency pair's pullback is quite logical. However, it's surprising that the market isn't trying to exploit the factor of Joe Biden's victory. The EURUSD's rally in the next 5-7 days, followed by a sudden reversal, would be an optimal scenario. The bulls still can do some fighting if the quotes rise above 1.179-1.18 against a backdrop of the ECB's meeting.

For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/the-dollar-spoiled-it-all-forecast-for-29102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar rocks on the waves. Analysis as of 28.10.2020

Dollar rocks on the waves. Analysis as of 28.10.2020

Weekly fundamental forecast for the dollar

The fear of coronavirus makes US stock market bulls retreat, which results in the US dollar’s consolidation. The number of new cases hits a record high in the USA. The US also reported record high hospitalization rates since 19 August, while France recorded the highest daily death toll since April. Emmanuel Macron is rumored to introduce another lockdown. That dropped the EURUSD quotes below the bottom of figure 18. The fall might have been deeper if not for expectations of the Democrats’ victory on 3 November.
According to 75% of 59 Reuters experts, a blue wave will be the best option for the US economy. It will help the fiscal stimulus package worth $1.8 trillion pass easily through Congress. Experts forecast that the US GDP will draw down 4% in 2020 and expand 3.7% and 2.9% in 2021-2022, respectively.

Reuters survey: What will support the US economy?

Source: Reuters.
A blue wave and post-election reduction in political uncertainty suggest that volatility may fall. That’s good news for S&P 500 and bad news for the greenback. The world’s largest financial manager BlackRock, which manages assets worth $7.3 trillion, thinks that the USD will be moderately weak for 1-3 years. The giant joints USD bulls, such as Goldman Sachs and UBS. Its position explains why hedge funds are selling out dollars in the forward market.

USD index and speculative positions in USD


Source: Bloomberg.
Uncertainty feeds the dollar. The markets seem to know already the presidential election’s results. The election factor excluded, the second wave may drop EURUSD quotes significantly. We may face the global economy’s double recession and another collapse of the S&P 500 and the greenback’s hike like it was in March. All the previous achievements will be canceled. Few are those who will remember the housing prices’ growth in the USA and the fifth consecutive month of increase in US durable goods orders.

US durable goods orders


Source: Bloomberg.
At first sight, the second pandemic wave must push the ECB to active actions as early as at the 29 October meeting. However, QE expansion won’t solve the COVID-19 issue. European banks stop crediting, fearing bad debt growth. So, Christine Lagarde’s main task is to calm down financial markets. A hint about an additional stimulus in December may help with that task.

Weekly trading plan for EURUSD

Thus, the pandemic returned to Forex’s forefront and consolidated the USD. However, I think it’s still possible to exploit the factor of Joe Biden’s victory in the short term. The EURUSD’s retracement from support at 1.1745 or return to 1.1815 and higher may be a signal to open long positions for impatient and adventurous traders.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-rocks-on-the-waves-analysis-as-of-28102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar is afraid of risk on steroids. Analysis as of 26.10.2020

Dollar is afraid of risk on steroids. Analysis as of 26.10.2020

Weekly fundamental forecast for dollar

The pandemic revealed the drawbacks of the eurozone’s two-speed economy. While Germany’s business activity grew, mainly due to the industrial sector, the currency bloc’s composite Purchasing Managers Index dropped to 4-month lows at 49.4. When that value is less than the key level of 50, the economy falls. Thus, the eurozone may face a double recession against the backdrop of the second wave of COVID-19. That allows selling EURUSD amid the US business activity’s continuous growth. Unfortunately, the market is overwhelmed with quite different investment ideas. At least for now.

Business activity


Source: Wall Street Journal.
Bank of New York Mellon notes that the correlation between currencies and the US stock indexes is significantly higher than in 2019. That allows us to presume their increased sensitivity to risk appetite. The bank interpreted that unusual occurrence as “risk on steroids”: the markets are waiting for Joe Biden’s victory, the S&P 500’s rally, and the greenback’s dive, which will affect dollar pairs and cross rates.
The USD is under serious pressure, but the euro itself has some trumps. There is too much spare cash in the eurozone’s bank system amid large monetary stimuli. The index reached a record high level of €3.2 trillion in October. As there’s too much spare money, it goes to the debt market: demand for the European Commission’s first bonds was €233 billion while the issuance volume was €17 billion. Since the ECB has already got a large piece of the pie by means of its pandemic-driven bond-buying program, the remaining part is fiercely contended for.

Spare liquidity in European bank system

Source: Bloomberg.
Central banks are interested in buying bonds too: according to Deutsche Bank’s research, their share in the volume of 10-year bond issuance was 40%, two times bigger than previous issuance values. Diversification of gold and currency reserves in favor of the euro is one of the key factors in the EURUSD’s consolidation.
The ECB will hardly decide to expand QE in the current circumstances at the meeting on 29 October. It doesn’t need to hurry in spite of the pandemic’s second wave, deflation, Brexit, and double recession risks. The CPI’s fall below zero may be due to temporary factors, such as Germany’s VAT cut. The program’s unused resources amount to $750 billion, whereas economic forecasts will be updated only in December. There are plenty of arguments to continue to “idle on the roadside,” but Christine Lagarde can still surprise us.

Weekly trading plan for EURUSD

If not for the ECB’s meeting and the fiscal stimulus story, we could buy EURUSD at the breakout of resistance at 1.1865 amid expectations of Joe Biden’s victory, then fix profits after 3 November and sell the pair amid the divergence in the US’ and the eurozone’s economic growth. However, other factors may interfere with that plan. The last week of October promises to be wild.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-is-afraid-of-risk-on-steroids-analysis-as-of-26102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Euro: slow start and fast drive. Analysis as of 27.10.2020

Euro: slow start and fast drive. Analysis as of 27.10.2020

Weekly fundamental forecast for euro

There are a few reasons for the EURUSD’s drop to the bottom of figure 18: the US stock indexes’ fall amid loss of faith in fiscal stimuli and record-high growth of new cases in the USA; disappointing macrostatistics in Germany, and fears that the ECB may expand QE as early as in October. Investors were expecting the second wave of COVID-19, but they didn’t know it would come so fast. The record high growth of new cases in the USA, France, and Russia, the introduction of new restrictions, and emergency announcements in some European countries made the S&P 500 fall by 1.9%. The German DAX went further and dropped 3.7 %, drawing the euro down too.
The increase in new coronavirus cases in Germany provoked the Ifo’s Business Climate Index’s fall, the first in six months. It’s a bad signal about an eventual slump after a 6-month recovery. Growing risks of a double recession and reflation may urge the ECB to expand QE by €500 billion already on 29 October, in contrast to the Bloomberg experts’ bet on December. That will be an unpleasant surprise for EURUSD bulls.

German business climate index


Source: Bloomberg.

ECB bond-buying dynamics

Source: Bloomberg.
The States look preferable to the eurozone, which lost illusions about fast recovery. Three months ago, Bloomberg surveyed economists forecast that the US GDP would grow 18% in Q3. The estimate rose to 31.8% by the publication date against a backdrop of a large fiscal stimulus as a faster-than-expected removal of restrictions. If the fiscal stimulus isn’t extended, the US double recession chance will be as big as in Europe.
The market doesn’t believe in any extra support before the elections and has already started to doubt that the issue will be resolved after 3 November as a blue wave is becoming less likely. That results in the S&P 500’s fall, which contradicts history. Since 1928, the stock index has closed in the green zone in the week before the presidential election. If we take a Tuesday to Friday period, the indicator will increase by up to 91%. Thus, the week's bad start isn’t as bad a signal for the stock market and the euro.
Not only will Joe Biden’s victory inspire S&P 500 bulls, but it will also reduce the risk of a trade war resumption, the reason for which may be China’s slow execution of its obligations under January’s agreement. According to Bloomberg, China has bought $65.5 billion in US goods, while the agreement is $170 billion.

China’s fulfillment of trade obligations


Source: Bloomberg.
The Democrats’ victory will weaken the US protectionism and allow the global trade to breathe deeply. That’s good news for the export-oriented eurozone and its currency.

Weekly trading plan for EURUSD

S&P 500’s fall on 26 October should be interpreted as market noise. The story is likely to repeat itself, and the stock index will close in the green zone in the last week before the election.
The strategy for the EURUSD remains the same. Buy at a breakout of resistance at 1.1865.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-slow-start-and-fast-drive-analysis-as-of-27102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

If only euro could. Forecast for EURUSD for 20.10.2020

If only euro could. Forecast for EURUSD for 20.10.2020
Despite the second wave of COVID-19 and the rumors of the ECB’s monetary stimulus expansion, the single European currency isn’t giving up. Let’s talk about what is supporting the euro, and make a trading plan for EURUSD.

Weekly fundamental forecast for euro

In spite of, not thanks to.
EURUSD’s yesterday rise could seem strange amid the US stock indexes’ fall and the second pandemic wave in Europe. However, we need simply to understand, what investment idea is prevailing in the market these days. The euro’s descending move is seen as a mere correction. Most investors are sure that Joe Biden’s victory at the elections on 3 November will weaken the dollar, whereas the vaccine will give a boost to the whole global economy. In those circumstances, any hint at the pair’s growth appears to a be a reason for buying it. No one wants to miss the train that will go to the north sooner or later.
Formally, the reasons of EURUSD’s rally were Speaker of the US House of Representatives Nancy Pelosi’s statement that a fiscal stimulus deal is still likely to be made before the election, and the Fed’s dovish comments.
If the Democrats and the Republicans agree on economic help, S&P 500’s rally may continue, the global risk appetite will improve, and the greenback’s position will worsen. Still, the market didn’t believe Pelosi: a deal would raise Trump’s rating. What do the Democrats need that for? Also, Pelosi’s statement sounded too ultimatum-like: if not on Tuesday, then never!
Fed’s Vice Chair Richard Clarida asserts that GDP’s pullback is connected in part with the Central bank’s and the Congress’ relief packages. He thinks that both the lawmakers and the Fed will need to provide additional support for GDP to continue recovering. Atlanta FED President Raphael Bostic believes that some areas of the US economy hardly ever recovered, or didn’t recover at all.
If the Fed is planning to provide an extra stimulus and GDP isn’t recovering, how can we speak about any divergence between monetary policy and economic growth, selling EURUSD in the short term?
During the fortnight ended on 13 October, hedge funds cut euro longs at the fastest pace over the last 8 months.

EURUSD and speculative positions in euro


https://preview.redd.it/sm3q5n39d8u51.jpg?width=562&format=pjpg&auto=webp&s=2014d5aa38de78e681c38b6099aa11e83177c0d5
Source: Bloomberg.
Still, speculative positions aren’t likely to become net shorts: the negative US assets yield and Joe Biden’s probable victory don’t allow investors to buy out dollars.
The Chinese yuan’s consolation may suggest the reasons of EURUSD’s rise to the top of figure 17. In spite of the People’s bank’s intention to put a spoke into USDCNH bears’ plans, the pair returned to the area of its 18-month lows and is ready to update them. That will draw it to the lowest value since July 2018. Investors overestimated the negative impact of China’s GDP’s moderate growth in Q3, and paid attention to strong statistics on industrial production and retail sales.

Weekly trading plan for EURUSD

I mentioned the yuan’s impact on the euro rate many times. Nevertheless, the eurozone’s domestic problems will prevent EURUSD from continuing the rally. The market is concerned about October’s data on European PMI. Most likely, the traders will be selling the euro at $1.178, $1.181 and $1.185 in the nearest time.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/if-only-euro-could-forecast-for-eurusd-for-20102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Second wave hits euro. Analysis as of 19.10.2020

Second wave hits euro. Analysis as of 19.10.2020
However efficient the anti-Covid summer measures may be, the pandemic is returning to Europe, making the currency bloc’s countries impose new restrictions and compromising Q4 GDP growth. How will that affect the EURUSD? Let’s find it out and make a trading plan.

Weekly fundamental forecast for euro

Which is worse: to be always on a losing streak or to have glimpses of hope between losing streaks? EURUSD may help answer that question. The second wave of COVID-19 is spreading across Europe so fast that the eurozone’s double recession is being discussed in the market. Not only will that increase the risk of the EURUSD’s further correction, but it also suggests an eventual turn to downtrend. What’s more, neither China nor Brexit haven’t lived up to the euro fans’ expectations so far.
China’s GDP grew by 4.9% in quarter 3. That’s better than the Q2 value (+3.2%) and worse than the Bloomberg experts’ consensus forecast of 5.3%. Export-oriented China is in trouble as foreign demand is weak. It can’t assume responsibility for the global economy’s fate. Next, the risk of double recession is growing due to another round of restrictions in Germany, France, Spain, Italy amid the severe worsening of the epidemiological situation. That’s the main factor in EURUSD’s collapse.

China’s GDP dynamics


https://preview.redd.it/docyt2qop1u51.png?width=2778&format=png&auto=webp&s=0f5005608e89ff4d439609b0a020a7544cd9a5ef
Source: Bloomberg.

EURUSD rate and EU/US COVID cases


https://preview.redd.it/wmnp6obpp1u51.jpg?width=598&format=pjpg&auto=webp&s=b783d0349491d93c5907b5491b3cd61a4cf2d701
Source: Nordea Markets.
According to Societe Generale, any central bank that can soften monetary policy will do that, especially in the regions with high infection rates and restrictions on movement. Christine Lagarde says the second wave compromises the most the service sector, which accounts for 75% of the eurozone’s GDP. While Europe is facing the risk of QE expansion, the US forward markets presume that Joe Biden’s victory, fiscal stimulus extension, and inflation acceleration will make the Fed raise borrowing costs before 2024.
Thus, the divergence in economic growth and monetary policies starts showing favor to the USD, and that’s not the euro’s only problem. The market still believes that the Brexit issue will be solved at the last moment, just like it happened many times before. However, the clock is ticking, and they still can’t get the things rolling. They say more often that the pound can collapse 10% and draw the euro to the bottom in an unfavorable scenario.
Hopes for a bright future did good for the eurozone’s currency in summer, but they may eventually turn out to be harmful. Germany and the currency bloc plan to cut the budget deficit from 6.25% to 4.25% and from 8.9% to 6% of GDP in 2021. I hope the inopportune phaseout of monetary stimulus won’t stir up a debt crisis in Europe like in 2010-2012.

Weekly trading plan for EURUSD

Thus, EURUSD bulls have plenty of arguments to close long positions. A breakout of support at 1.169 may drop quotes to 1.162 and 1.159. Use a successful bearish storm for opening and building up short positions.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/second-wave-hits-euro-analysis-as-of-19102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Euro is rolling down. Forecast as of 16.10.2020

Euro is rolling down. Forecast as of 16.10.2020
The EURUSDis being corrected down amid several negative factors. They are growing political risks in the USA, the second pandemic wave in Europe, and the high risk of a no-deal Brexit. Let us discuss how bad the situation is and male up a EURUSD trading plan.

Weekly euro fundamental forecast

The EURUSD is down to its two-week low for several reasons. The US stock indexes have been trading down for three consecutive days; additional restrictions are introduced in Paris and London because of COVID-19. Besides, the EU officials announce that agreeing a "fair" new partnership with Britain was "worth every effort" but that the bloc would not compromise at any cost, which sends the pound down. The euro bulls are trying to consolidate the price at the bottom of figure 17, betting on China’s rebound and the ECB’s unwillingness to boost the monetary stimulus before December.
China has attracted $6 billion in the dollar-backed obligations, which repeats the record of 2019. According to the median forecast of the financial analysts polled by the Wall Street Journal, China’s GDP will grow by 5.3% Y-o-Y in the third-quarter report, which is much higher than in the April-June period (+3.2%) and close to the data recorded in 2019 (6.1%). The foreign demand for Chinese securities and the optimism about economic rebound allowed the yuan to compensate for most losses resulted from PBoC’s FX interventions. These facts support the euro.
The euro bulls are also encouraged by the ECB’s unwillingness to expand the monetary stimulus at its October meeting. Despite a sharp downturn of the euro-area economy amid the second pandemic waves, the ECB officials believe there is no need yet to ease the monetary policy. According to the head of the Bank of Holland, Klaas Knot, the regulator needs additional information. The ECB Vice-President Luis de Guindos believes that since less than half of the money in the QE framework has been spent, there is no need to boost asset purchases.

ECB monetary stimulus spending


https://preview.redd.it/esnb9ht5dgt51.jpg?width=583&format=pjpg&auto=webp&s=dd293647240a19596f885ecf8728551baa93c363
Source: Bloomberg
The euro is supported by the fact that China’s economy is growing, and the ECB is unlikely to take active measures. However, the dollar demand increases amid the political uncertainty in the US associated with a lower global risk appetite, which sets the EURUSD bulls back.
The number of Americans filing for unemployment benefits rose by 898 thousand in the week ended October 10th, proving the US labor market needs an additional fiscal stimulus. A poor reading has sent the S&P 500 down and strengthened the greenback. Investors still bet on the Democrats’ victory on November 3. However, they are not willing to buy US stocks now, as they remember how Hillary Clinton, who was leading in the ratings, eventually lost to Donald Trump. If the US stock indices continue falling, the market situation will be similar to that of 2017. At that time, the ECB, discontent with the euro strengthening, used verbal interventions, and the pair failed to consolidate above 1.2.

Dynamics of EURUSD in 2017 and 2020


https://preview.redd.it/ck7knoc6dgt51.png?width=593&format=png&auto=webp&s=e04a6232ebb77be11ea89114fb412fd900e69381
Source: Nordea Markets

Weekly EURUSD trading plan

Remarkably, the EURUSD trend depends on the pound now. The UK is discontent with the EU's willingness to prepare for a no-deal Brexit can drop the GBPUSD deeper and send the euro towards $1.159-$1.162. I suggest one continue holding down the EURUSD shorts entered at level 1.178.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-is-rolling-down-forecast-as-of-16102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar checks its watch. Analysis as of 22.10.2020

Dollar checks its watch. Analysis as of 22.10.2020
The markets have been obsessed with fiscal stimulus recently, but the demand for European bonds may push EURUSD to the north if the ECB expands the bond-buying programme on 29 October. Let’s discuss that and make a trading plan.

Weekly fundamental forecast for dollar

In the financial markets, time is as important a factor as a price direction. Many traders would lose their money having chosen a wrong moment for making a trade, even though an asset’s price direction was predicted correctly. It is believed that fiscal stimulus will weaken the US dollar as stocks will grow, global risk appetite will increase, and demand for safe-haven assets will fall. The question is: will the economic support be provided before or after the elections? In the latter case, Donald Trump’s unwillingness to recognize voting results will support uncertainty and the greenback.
According to economic adviser Larry Kudlow, the stimulus talks are going really well, and both the economy and the market will profit if a deal is made within the next two weeks. At the same time, the Republicans don’t accept the prospective amount of $1.9 trillion. Speaker of the US House of Representatives Nancy Pelosi believes, a deal will be signed in spite of the Republicans’ resistance, but admits it may happen only after the elections.
An extra support before the election would give Trump and the USD extra points. That’s why the dollar’s weakness and the S&P 500’s fall mean the markets are doubting that the Congress will approve of the Democrats’ package before Joe Biden takes the president’s chair.

US candidates rating


https://preview.redd.it/1r517r7wvmu51.jpg?width=603&format=pjpg&auto=webp&s=25fa487a75921d355516226df6c1990475abb116
Source: Nordea Markets.
Unlike fiscal stimulus, the US elections have already been scheduled. At the same time, the Blue Wave may raise the S&P 500 in the short term, and weaken the greenback, with a subsequent correction. On the other hand, the markets are overconfident about the Democrats’ victory, which shows itself in lower volatility at Forex. In 2016, Hillary Clinton was on the top of ratings, but it was Trump who opened a bottle of champaign. If he is re-elected unexpectedly, investors should consider selling the AUDUSD and buying the USDCNH amid a risk of US-China trade war resumption.

Forex volatility dynamics

https://preview.redd.it/h3hilz93xmu51.jpg?width=572&format=pjpg&auto=webp&s=8d443c759a9f07f722c990ec68eb136945183c42
Source: Bloomberg.

Weekly trading plan for EURUSD

The QE programme extension period is a question of time too. If that happens at the ECB’s meeting on 29 October, we can develop a trading strategy of buying the EURUSD as the quotes will fall amid weak statistics on Germany’s and the eurozone’s business activity, and fixing profits after the Executive Board’s meeting. Such a strategy is based on high demand for periphery countries’ bonds. The price for them will grow if QE gets extended. The problem is, the ECB may not take that step at the end of October.
I think that such factors as Joe Biden’s victory and a capital flow from the US debt market to Europe may raise EURUSD quotes despite the second pandemic wave and the eurozone’s economic weakness. Wait for data on Europe’s PMI to make a decision about medium-term trades. Until then, focus on intraday trading with narrow targets.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-checks-its-watch-analysis-as-of-22102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Euro follows rouble's example. Forecast for EURUSD for 21.10.2020

Euro follows rouble's example. Forecast for EURUSD for 21.10.2020
The European Commission’s first issuance of bonds as part of common debt and the capital flow to the European markets support EURUSD bulls. Let’s discuss that and make a trading plan.

Fundamental forecast for euro for today

Money controls the world. Everything seems to be against the euro: the second wave of COVID-19 in Europe, the S&P 500’s retracement, the worsening of the eurozone’s economy and the ECB’s hints at monetary policy softening. Nevertheless, the EURUSD jumps up like a scalded cat. If the reason is the Chinese yuan that has reached its 27-month high against the USD, then why aren’t the Australian and the NZ dollars consolidating? Australia’s and New Zealand’s shares in Chinese exports are higher than the eurozone’s one. As it turns out, it’s carry trade that should be blamed for the euro’s rise.
The story that occurred to the Russian rouble is still fresh in our minds: carry trade made it the best Forex performer in 2019. USDRUB’s fall looked paradoxical too. The state of the Russian economy left much to be desired, trade wars slowed down the main partners’ GDP and the Bank of Russia dropped the key rate to stimulate inflation. It’s the latter factor that made non-residents buy out governmental bonds in expectation of a rise in price. A similar story appears to be happening in Europe now.
The European Commission made the first issuance of 10-year and 20-year bonds as part of common debt on 20 October. The sale will finance the EU’s coronavirus-relief programs. The issuance volume amounted to €17 billion, and that’s just a beginning. The fund’s total volume is €750 billion. The mass media once presented those bonds as an alternative to treasuries. That was one of the factors in the EURUSD’s summer rally. I think it’s a mere flow of capital from the USA and developing countries to Europe. Buying EM bonds doesn’t seem to be a good idea amid global GDP’s potential slowdown in Q4. Europe’s periphery is another thing. Greek, Italian and Portuguese bonds look tasty. That lowers their spreads, in comparison with German ones, and points to smaller political risks. Hi, Russia-2019!

Yield spreads in European and German bonds


https://preview.redd.it/3p1xf8ol5gu51.jpg?width=560&format=pjpg&auto=webp&s=8743f58ef1a5d2ca226c89acc76bf2234c6edb5c
Source: Wall Street Journal.
The more the ECB speaks about softening monetary policy, the more actively non-residents buy out European bonds, hoping for a price rise in the future. Obviously, German bonds have no room for growth, but the periphery still offers some earning opportunities. By the way, EURUSD’s 3-month swap spreads became negative in August. That means the Americans can make profit from both a rise in price in EU bonds and hedging.
The risk of a Blue Wave in the USA aggravates the situation. Joe Biden’s victory and the Democrats’ takeover of the Congress will unblock $4-5 trillion in fiscal aid. That will increase the volumes of Treasuries issuance and drop their price. Investors need an alternative urgently, and they find it in Europe.

Trading plan for EURUSD for today

How long will the euro continue growing, considering the growth isn’t fundamentally backed up? The rouble’s last year example says that everything is possible. The EURUSD’s quotes can be rising up to the ECB’s meeting on 29 October. Then a sale-out may follow. I recommend staying outside the market for a while.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/euro-follow-roubles-example-forecast-for-eurusd-for-21102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Bulls are selling off the euro. Forecast for 15.10.2020

Bulls are selling off the euro. Forecast for 15.10.2020

Fundamental euro forecast today

The single European currency is trading flat, and the traders wonder what signals they should consider. The price may go up following the pound, rising amid the UK's willingness to continue negotiation with the EU after the summit on October 15-16. It may also go down, following the US stock indexes. Steven Mnuchin has sent the S&P 500 down. The Treasury Secretary says a fiscal stimulus deal is unlikely to be reached before the election. It has started the sell-off in the US stock market and strengthened the greenback.
The dollar will now respond to pathetic speeches and promises. According to Donald Trump, the vote on November 3 is a choice between “historic prosperity” and a “steep depression.” The US president is focusing on economic expansion. It looks like Trump has ruled in two different countries. The first economy was flourishing and reached record highs of such indicators as employment, household incomes, and equity prices. The second economy has had the worst performance ever, being damaged by the COVID-19.
The Americans are ready to forgive Trump for unfulfilled promises about 3% GDP growth, reducing the foreign trade deficit, and building a wall on the Mexican border. However, they will hardly forgive the inefficient management of the pandemic. According to the Gallup survey, 56% of the respondents believed they were better off now compared to four years ago. It is more than that of Ronald Reagan and Barack Obama when they were re-elected. Simultaneously, the survey showed that Trump, in general, loses to Biden because of COVID-19.
The US pandemic management was inefficient, which cost the lives of more than 200,000 people. It is evident from Bloomberg's research, according to which, the pandemic management in the UK and the EU was more effective than in the US. It remains uncertain how long the fiscal stimulus will last in the US, and some aid packages have exhausted. Therefore, economic stimulating in the US was less effective than in the euro-area.

Economic effect of stimulus


Source: Bloomberg
The positive effect of the stimulus supported the EURUSD rally in the June-August period. Amid the timely and large-scale aid packages, the euro-area economy performed better than the US. The second wave of the pandemic turned everything upside down. Some European countries are currently closing schools, canceling surgeries, and recruiting medical students, getting prepared for a repeat of the nightmare scenario that took place in the spring.

Dynamics of leading economic indicators


Source: Bloomberg

EURUSD trading plan today

The market is growing on rumors and falling on the facts. The EURUSD bulls hoped that the euro-area GDP recovery would be faster than in the USA. They are exiting longs now, being disappointed. If the euro breaks out the support at $1.1715, one could add up to the euro shorts entered level $1.178.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/bulls-are-selling-off-the-euro-forecast-for-15102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar is getting high on politics. Forecast as of 14.10.2020

Dollar is getting high on politics. Forecast as of 14.10.2020

Fundamental US dollar forecast today

The optimism about the ‘blue wave’ prospects in the US, when democrats take control of the White House and Congress and boost the US fiscal stimulus, is gradually being replaced by skepticism. The Republicans may not lose the majority in the Senate. If so, the disputes about the financial aid package could continue after November 3. Does it make sense to buy stocks? The S&P 500 has dropped. The People’s Bank of China is willing to weaken the yuan. Speculators are existing record euro longs. Under the above conditions, the EURUSD fell below the support 1.178 earlier indicated.
The bets on Joe Biden’s victory are bets against the US dollar. However, this fact alone is not enough. If Democrats fail to control the Congress, the Republicans will oppose the new president just like their opponents did in 2017 when Donald Trump tried to carry out the tax and the medical reforms. Or like it was in 2020 when the White House offers a stimulus package, and the House rejects it. After the US election is over, continuous political uncertainty should support safe-havens, including the US dollar.
Investors wonder what will be after November 3. I don’t think the bet on the growing gap between the US and the euro-area economies should stop working soon. According to San Francisco Fed president Mary C. Daly, the US economy is strong and should withstand a new storm. At the same time, investor confidence in Germany's GDP rebound has fallen to the lowest level over the past five months. The number of COVID-19 cases in Germany has reached 6500, the highest value since April’s peak.

Dynamics of Germany’s economic sentiment


Source: Bloomberg
The expectations are also pressed down by the International Monetary Fund. The IMF has revised the US GDP forecast for 2020 up to -4.3%, from the previous gauge of 8%. The forecast for the euro-area economy has been raised from -10.2% to -8.3%. According to the IMF, the global GDP will contract this year not by 5.2%, projected in June, but by 4.4%. The recession has been mitigated by huge stimulus packages provided by the world’s central banks and governments and the rebound of China’s economy. According to the IMF, China’s economy has already reached the level of 2019 and will exceed it by 1.9 at the end of 2020. In 2021, the Chinese GDP should reach 8.2%.

GDP forecasts


Source: Financial Times
Investors also doubt that the Fed’s monetary expansion is more aggressive than that of the ECB. According to Bloomberg's research, the European Central Bank is buying more assets within the QE than needed to cover the euro-area budget deficit. So, the ECB monetary expansion seems to be more aggressive than the Fed’s.

Budget deficit and QE, % of GDP


Source: Bloomberg

EURUSD trading plan today

So, the bet on the divergence in the economic expansion and monetary policy may not work after the US presidential election. Speculators are exiting the euro longs, and the EURUSD is going down towards 1.1715 and 1.1625. Hold down short trades entered at level 1.178.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-is-getting-high-on-politics-forecast-as-of-14102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

Dollar follows the stock market. Forecast as of 12.10.2020

Dollar follows the stock market. Forecast as of 12.10.2020

Weekly US dollar fundamental forecast

The ECB attempts to weaken the euro fail. Philip Lane says the ECB already pursues an inflation strategy similar to the Fed. The European Central Bank is unwilling to tighten monetary policy until the inflation growth is reflected in the economic data. Nonetheless, the EURUSD doesn’t react to the ECB’s chief economist's speech and consolidates above figure 18 bottom. According to the HSBC, fiscal policy is currently the main factor in the financial markets, and central banks must admit that they have lost some power.
Although the United States has invested in its economy more money than most other countries in the world and significantly more than during the previous economic crisis, the fiscal stimulus tends to exhaust quickly. The euro-area governments continue to support small businesses and individuals, while the US policymakers can’t reach an agreement on its extension. The new $1.8 trillion stimulus plan offered by the Republicans is the largest in scale and contrasts with Donald Trump's recent announcement to end negotiations with Democrats. However, House Speaker Nancy Pelosi rejects it, calling the plan insufficient.

Sizes of fiscal stimulus

Source: Bloomberg
Some analysts suggested the new Republican proposal fueled the rally of the US stock indexes. The S&P 500 was 3.8% up in the week through October 9, having featured the best performance since July. I believe the US stock market is rising as the uncertainty around the US presidential election is lowering. Joe Biden’s chance to win is rising, and his victory shouldn't be such a disaster for the US stock indexes as expected earlier.
According to RealClearPolitics, the gap between Biden and Trump is 9.6 percentage points. For comparison, in 2016, Hillary Clinton was 5.8 pp ahead of Donald Trump three weeks before the vote. JP Morgan suggests the corporate tax hike in the case of Joe Biden's victory will temporarily hinder the US stock market. The higher tax rate will take effect on January 1, 2022, and the S&P 500 is likely to face a storm in the fourth quarter of 2021. However, as the experience of 1987 and 2013 shows, when taxes were also increased, the storm would not last long. After the correction, the bulls should resume the uptrend.

S&P 500 reaction to a corporate tax hike


Source: Bloomberg
I believe the US stock market trend is a significant driver for the EURUSD. Ahead of the US presidential election, the pair follows the US stock indexes, mostly ignoring the ECB verbal interventions, the second COVID-19 wave, and the euro-area economic data.

Weekly EURUSD trading plan

The US dollar is a more significant Forex currency than the euro, so the ECB willingness to weaken the euro alone is not enough to discourage the EURUSD bulls. Amid the growth of Joe Biden's approval rating, the EURUSD should continue rallying up to 1.1865-1.188. However, Donald Trump is not giving up yet, so one could sell on the price rise.
For more information follow the link to the website of the LiteForex
https://www.liteforex.com/blog/analysts-opinions/dollar-follows-the-stock-market-forecast-as-of-12102020/?uid=285861726&cid=62423
submitted by Maxvelgus to Finance_analytics [link] [comments]

LiteForexSpanish - YouTube Lite forex Ganando Dinero en Copy Traidig Forex art of trading - LiteForex - Truths - YouTube LiteForex  Basic Knowledge in Forex Trading  Pip Magnet ... Lite Forex - Hướng Dẫn Làm Lệnh Copy Trade trên sàn Liteforex

Forex trading tutorial. Get the basic information from our tutorial that embraces all main concepts necessary to start trading efficiently. Read the tutorial. Demo contest for beginners. Monthly contest BEST OF THE BEST. Become the best in trading Forex,CFDs, Shares, Indices, Gold, Oil, and other Commodities and win up to $4000 on your live ECN account for trading . Participate. Optimal choice ... Die Besten Forex Broker im Vergleich 2019 – Ausführlicher Trading Test Jetzt zum transparenten Vergleich: Die Wahl des Forex Brokers ist nicht immer einfach. Es gibt ein sehr hohes und weitreichendes Angebot für Trader. Auch betrügerische und unseriöse Unternehmen gibt es. In diesem Vergleich und Test möchte ich Ihnen meiner Meinung nach ... LiteForex MT4 is an analytical trading platform intended for working on the Forex market and stock. By using this application, you can identify patterns to make trades. This program is a smart and simple solution for online trading, technical analysis and automated trading. Welcome to Lite Forex trading. A website about Forex trading and Forex brokers. Forex trading can be a great way to earn money. It is also an easy way to lose money. Becoming a successful Forex trader requires a lot of hard work and dedication. You need to learn how to use different Forex certificates in the right way and study the market carefully to be able to earn money. If you start ... X-Ray vision for the crypto markets. Bitcoin and alt trading software on steroids with advanced heatmap visualization, live data, custom indicators, support for all major crypto exchanges and more. Unlike Forex, futures trading do have London, New York or any other sessions. So its trading hou... 27.06.2018. Currency trading basics in tamil. Investing in currency trading is one of the most lucrative offers in today’s world. Consid... 23.06.2018. Forex millionaire robot. Forex robots or expert advisors (EA) exist to relieve traders from the hassles of monitoring con... 23.06.2018. Forex ... Trading orders in the "Quick Trading" mode are sent at once. A trading order will be sent immediately once you have clicked on "Sell" or "Buy". You won’t be asked to confirm your order. Under normal market conditions and the system’s productivity, the trade will be executed quickly right after the order has been sent, and you will be bound by its terms. Back Apply. Customize card view. EUR ... MetaTrader 4 is a popular Forex trading and analysis platform, which allows trading currencies, shares, precious metals and CFD on stock indices. In this section, LiteForex clients can download MetaTrader 4 trading platform and its mobile applications for PDA, iPhone®, iPad ™ and Android. Forex login: official page of forex account login with LiteForex trading platform. Forex online login available here. A Forex Islamic account is a halal trading account and is available to those traders prohibited from conducting trades involving interest rates, owing to religious beliefs. Benefits. LiteForex Investments Limited picks up particularly good ratings in the following areas: Licensed; Copy trade services ; Social trading platform; Automated trading – APIs; Good customer reviews in 2020; Breadth ...

[index] [1288] [7192] [21935] [426] [15586] [23768] [23876] [2310] [10786] [308]

LiteForexSpanish - YouTube

LiteForex ở Việt Nam hiện tại được rất nhiều người quan tâm và tìm hiểu Cách kiếm thu nhập thụ động với hệ thống Copy Trade trên sàn Liteforex Hướng ... TẠO và VERIFY Tài Khoản Trên Sàn LiteForex Mới Nhất TRADE FOREX THỰC CHIẾN - Duration: 5:20. TRADE FOREX THỰC CHIẾN 201 views for business proposal e-Mail me @ [email protected] RECEIVE A MINIMUM AMOUNT OF $250 USD BY USING THE LINK BELOW https://www.liteforex.com/promo/codes/?c... 🔎🌎 ফ্রী ফরেক্স সিগ্নাল ( ফরেক্স বিডি কাজ করে মাত্র তাই ফ্রী সিগ্নাল দেখে ... CLICK HERE FOR MORE INFO: https://rebrand.ly/forex33 And start earning in the Forex Market Now! In our growing international company setting, there are busin... Página oficial en YouTube de LiteForex en español. LiteForex es una de las compañías líderes en el mercado de divisas Forex y CFD, une a traders de todos los...

http://binaryoptiontrade.daysurbisisubt.ml