Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price (the quote), it is essential to develop a sound understanding of how to read currency pairs.

After a strong past week for USD/ZAR bulls, the week ahead provides many fundamental drivers that could provide forward guidance for the Emerging Market (EM) currency. Recent positive jobless claims data and flat CPI prints have left markets undecided. Unfortunately for ZAR supporters, the slight impetus gained after the CPI announcement was not enough to overcome the better than expected jobless claims. In particular, direction on Fed QE tapering will be the focal point as the FOMC meets on Wednesday (see calendar below).

GET YOUR Q3 RAND FORECAST HERE!

From a South African perspective, inflation (see calendar below) and retail sales data for July and June respectively will have rand followers engrossed. Inflation for July will be an interesting statistic as markets look to see whether or not the recent riots had any impact. These may have some influence on USD/ZAR but more emphasis should be placed on the FOMC meeting later in the day. Positions should be...

What is the NFP?

The non-farm payroll (NFP) figure is a key economic indicator for the United States economy. It represents the number of jobs added, excluding farm employees, government employees, private household employees and employees of nonprofit organizations.

NFP releases generally cause large movements in the forex market. The NFP data is normally released on the first Friday of every month at 8:30 AM ET. This article will explain the role NFPs play in economics and how to apply NFP release data to a forex trading strategy.

The Australian Dollar pivoted slightly lower against the US Dollar last week. AUD/USD failed to overtake a former support level that made up a Rising Wedge formation. The price behavior is rather normal, as post-wedge breakouts commonly return to retest the prior levels of resistance/support. The failure to overtake the pattern’s former support level likely bolstered bearish confidence for a move lower.

That said, prices may continue to fall in the near term. A drop to the wedge’s initial starting point at 0.7286 may be in the cards and would mark a decisive point for further direction, with a drop lower likely seeing an extension of the downtrend. Moreover, an SMA crossover between the 100- and 200-day Simple Moving Averages occurred late in the week. That is a bearish sign and may open the door for more overhead pressure on the currency pair.

Chart created with TradingView

The Australian Dollar may be on the verge of reversing recent gains against the...

Rollover is the interest paid or earned for holding a currency spot position overnight. Each currency has an overnight interbank interest rate associated with it, and because forex is traded in pairs, every trade involves not only two different currencies but also two different interest rates.

Rollover refers to the interest either charged or applied to a trader’s account for positions held “overnight”, meaning after 5pm ET.

Now we know what the rollover means, lets get into how it works in forex.

Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Stock valuation, also referred to as ‘equity valuation’, provides the framework for traders to identify when a stock is relatively cheap or expensive. The difference between a stock’s market value and its intrinsic value presents traders with an opportunity to benefit from this disparity.

GBP/USD struggles to extend the series of lower highs and lows from earlier this week as it bounces back from a fresh monthly low (1.3791), but the negative slope in the 50-Day SMA (1.3884) casts a bearish outlook for the exchange rate amid the string of failed attempts to push back above the moving average.

Technical Forecast for British Pound: Bearish

Keep in mind, GBP/USD still tracks the broad range from the first half of 2021 as it reversed ahead of the February low (1.3566) during the previous month, and the failed attempt to close below the 1.3620 (78.6% retracement) region may push the exchange rate back towards the top of the yearly range as it attempts to retrace the decline from earlier this month.

Source: Trading View

However, GBP/USD is on the cusp of pushing below the 200-Day SMA (1.3769) for the second time this year as the rebound from the July low (1.3572) unravels, and another break below the moving average may...

Throughout history there have been a number of extremely meaningful volatility spikes across major financial markets. Each had defining characteristics that made them similar, despite occurring in very different markets and for different reasons.

The continuity seen across these volatility cycles is a good thing, because while it doesn’t necessarily make a major volatility spike predictable, historical precedence offers a blueprint for identifying conditions that are supportive for a potential vol-event to occur, and how they are likely to unfold once in motion. This can be of great help in guiding trading decisions, whether that is to steer clear of a potential vol blow-up or move towards it with the appropriate strategy that can take advantage of the outsized price swings that come with unusual levels of volatility.

We will first discuss what a volatility event typically looks like in terms of the behavior of volatility itself, then take a close look at...

Now that 1760 has been taken out the focus for gold bulls will be resistance situated at 1790-1800, which previously acted as support the prior month. That said, while the most recent downtick in the greenback and US yields has stemmed from weak U. of Michigan sentiment data, I expect downside in the USD to be limited as the Fed near the time by which they provide a taper signal, possibly as soon as this month at the Jackson Hole Symposium. The implications for gold, however, is likely to mean that 1790-1800 possibly holds on its first test. What’s more, a cluster of DMA’s from 1800-1815 will make the psychological 1800 level a tough area to crack.

Looking ahead to next week, Chair Powell is on the docket, although, given that he will be hosting a town hall with teachers from across the US, it may be unlikely that he makes a comment regarding any notable shifts to monetary policy and instead waits another week to discuss at the Jackson Hole Symposium. Elsewhere, the...

Market Health is a new tool for traders and analysts which gives a snapshot of global market performance, currency strength and real-time exchange opening and closing times.

Using data from Quandl, Market Health allows users to take a macro look at global markets and indices including the Dow Jones, S&P 500, FTSE 100 and DAX 30 to help formulate and deliver on trading strategies.

Split between 3 main viewpoints, users can easily switch between world overview, stock exchange open times and index performance.

The global view combines exchange opening times and currency performance, presented on a world map. The map, shown as a heatmap shows currency strength against a base currency of your choice.

Stock exchange opening times showcases 8 global stock exchange markets and details exactly when they’re open and closed, how long they’re open for and whether or not they’re currently closed for public holidays. All of this information is presented in an...

Looking to develop your confidence in oil trading and using technical indicators? Our advanced trading guides cover more sophisticated techniques and new concepts to take your trading to the next level.

Dealing with the fear of missing out – or FOMO – is a highly valuable skill for traders. Not only can FOMO have a negative emotional impact, it can cloud judgment and overshadow logic, which is problematic when making trading decisions.

So what is FOMO in trading? It’s the fear traders get when they think they might be missing out on big opportunities, or that other traders are more successful. Traders who understand FOMO, where it comes from and how they react to it are in a strong position to tackle it at its root cause: the innermost workings of their own mind.

This article will help you get to grips with your FOMO, offering solutions to stop it in its tracks – or even to prevent it from arising in the first place.

The Spinning Top candlestick pattern forms part of the vast Japanese candlestick repertoire with its own distinct features. Often associated with indecision in the market, Spinning Top candles can provide valuable supporting information to a trading strategy. The main talking points of this article are:

There’s a strong correlation between interest rates and forex trading. Forex is ruled by many variables, but the interest rate of the currency is the fundamental factor that prevails above them all.

Simply put, money attempts to follow the currency with the highest real interest rate. The real interest rate is the nominal interest rate less inflation.

Forex traders must keep an eye on each country’s central bank interest rate and more importantly, when it is expected to change, to forecast moves in currencies.

This article will cover forex interest rates in depth, touching upon:

Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Traders of all levels should have a solid grasp of what forex leverage is and how to use it responsibly. This article explains forex leverage in depth, including how it differs to leverage in stocks, and the importance of risk management.

US stocks gained again this week even with another +5% inflation print being released, this time for the month of July. The optimism, however, is that more evidence seems to be pointing to at least some of that inflation being transitory in nature, which could allow for the Fed to remain ‘pedal-to-the-floor’ on the accommodation front. And this has helped to keep investors behind the bid in US equities even despite the warning from FOMC Vice Chair, Richard Clarida, last week that the Fed may be ready to begin tapering asset purchases by the end of the year.

That comment helped to spark a rise in US yields and the NFP report last week brought more of the same. US yields continued to increase this week until that inflation print was released: But the big mark on inflation was on Friday on the heels of a disappointing US Consumer Sentiment report.

That shift in yield did have some impact across equities as it helped the Dow Jones outperform the Nasdaq, which has...

A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. This is also known as “rollover” and forms an integral part of a carry trade strategy. Traders gravitate towards this strategy in the hope of collecting daily interest payments over and above any currency appreciation from the actual trade.

This article explains FX carry trades with the use of examples and presents a top carry trade strategy to use in your trading.

Another positive week in the cryptocurrency space with prices continuing to move higher and back towards multi-week and multi-month highs. Compared to levels seen 7 days ago, Bitcoin and Ethereum are +14% and +16% respectively while the alt-coin market has seen even greater gains. The drop-off in liquidity over the weekend can lead to outsized moves, one way or another, so traders should treat price action over the next 48 hours with care.

Cardano (ADA) Pumps Ahead of Smart Contract Announcement, Messi in The Money

Prices via CoinMarketCap.

As mentioned earlier this week, a bullish pennant formation is playing out on the daily Ethereum/Bitcoin spread chart. A confirmed break higher – Ethereum outperforming Bitcoin – will likely add further to the alt-coin rally and bring into play 733 and 775 on the ETH/BTC spread.

Pennant Patterns: Trading Bearish and Bullish Patterns

Chart via @IG.com

Bitcoin is printing another positive week, its 4th...

GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall healthand potential growth of a country.Consequently, greater volatility in the forex market is closely observed during the GDP release.

Human error in the forex market is common and often leads to familiar trading mistakes. These trading mistakes crop up particularly with novice traders on a regular basis. Being aware of these errors, can help traders become more efficient in their forex trading. Although all traders make trading mistakes regardless of experience, understanding the logic behind these mistakes may limit the snowball effect of trading impediments. This article will outline the top ten trading mistakes and ways to overcome them. These mistakes are part of a constant learning process whereby traders need habitually familiarise themselves with them to avoid repeat wrongdoings.

The video included highlights six trading mistakes, however there will be more covered in the article below. It is important to note that trading comes with the inevitability of loss, but these may be minimised with the exclusion of human error/mistakes.

Prior to committing to forex trading, consider...

Knowing how to accurately value a stock enables traders to identify and take advantage of opportunities in the stock market. Stock valuation, also referred to as ‘equity valuation’, provides the framework for traders to identify when a stock is relatively cheap or expensive. The difference between a stock’s market value and its intrinsic value presents traders with an opportunity to benefit from this disparity.

Oil prices ended the week higher despite an early-week plunge of more than 4.1% with WTI poised to close at 68.50 on Friday in New York (+0.7%). The rebound marks the defense of a critical pivot zone we’ve been tracking for months and it’s make or break for the crude bulls. These are the updated targets and invalidation levels that matter on the oil price weekly chart. Review my latest Strategy Webinar for an in-depth breakdown of this crude oil price technical setup and more.

Trading bias is a predisposition or perspective of the financial markets whereby traders believe there is a higher probability of a certain outcome as opposed to any other alternate possibilities.

These trading biases are determined by technical and/or fundamental factors that support a specific outlook that explains market behaviour. This often relates to market trends being either bullish/bearish which signals appropriate trading strategy and style.