Fx trading Review: The US finger is about to finish, this time is worse than imagined! This week, the ECB ’s interest rate decision and CPI made a strong debut!
2020-03-09 12:28 from：CAPSTONE author：Jack
Capstone forex trading Review last week:In the past week, the Fed slashed interest rates, a seven-year high in gold, a strong non-agricultural US index plunged, and a new low in crude oil ... not only continued the stimulus of the previous week, but also increased various accidents, and the entire market was confused. Next, I will take you through these events and look for directions together.
The U.S. dollar is the worst currency of the week, none of it! Although the risk aversion is still the market's dominant factor, due to the spread of the epidemic in the United States, the US dollar's risk aversion function has failed, and the US dollar index has been sold off, and it fell below the 98 mark on Monday;
On Tuesday, the Fed suddenly announced a 50 basis point rate cut, and the market was in an uproar. You should know that the last such rate cut was 30 years ago. It was October 19, 1987. US stocks experienced the worst crash in history, just a few hours. , The decline has expanded to more than 23%. The next day, the morning of October 20, the Fed announced that it would do everything in its power to support the economy. After 10 days, they cut interest rates by 50 basis points.
If the three interest rate cuts last year were said to be insurance cuts and some people believe it, then this time, individuals can tell that the Fed is in a hurry. The Fed shot investors even more panic. The Dow immediately responded by plunging 800 points. As if the entire market was thinking like this: "Oh my God! The Federal Reserve has cut interest rates urgently, and the situation must be more serious than we think. It is a big move," the US finger broke the 97 mark!
On Friday, U.S. non-agricultural data was released. The data showed that the seasonally adjusted non-agricultural employment growth rate in February in the United States refreshed its highest since January 2019, and the unemployment rate returned to its 50-year low. However, everyone should find that gold had dived to US $ 14 before the data was released, making many investors in the market believe that this data was leaked in advance.
Despite the strong performance of non-agricultural data, it did not affect the market's expectations that the Federal Reserve ’s interest rate decision will continue to cut interest rates by 50 basis points two months later. The possibility of negative interest rates in the future will almost become a reality. In a typical economic recession, the average rate of interest rate cuts by the Federal Reserve That's 500 basis points. Based on the current interest rate of 1.25%, it can be easily concluded that during the recession, the Fed's interest rate will be -3% to -4%. Affected by this, the US finger finally broke the 96 mark!
Capstone forex trading Today's analysis:
(Europe and the United States M30)
Europe and America:
In terms of fundamentals, as the so-called feng shui turns, the U.S. dollar falls before the sprint 100 mark, but non-US currencies have soared, and the euro has climbed to the highest level since mid-2019, rising by nearly 2.36%. This week, we will focus on Thursday ’s interest rate resolution. According to historical data, the euro will need to be closer to 1 euro to 1.25 US dollars in less than three months before a rate cut occurs. Economic data indicates a brief recession in the euro area, and the European Central Bank may implement more quantitative easing at a later stage; it may cut interest rates at its April or June meeting. Technically, the MACD red kinetic energy column contracted slightly, and the KDJ indicator continued to rise at a high level, indicating that the upward risk of the exchange rate is still large. During the day, the upper pressure levels are 1.1511 and 1570; the lower support levels are 1.1354 and 1.1304, and the dips above the support level are mostly long.
EUR / USD trading strategy:
Strategy 1: Do more on dips (29 points)
Entry Level: 1.1333 Stop Loss Level: 1.1304 Take Profit Level: 1.1362
Strategy 2: Go short (29 points)
Entry: 1.1304 Stop Loss: 1.1333 Take Profit: 1.1275
Fundamentally, under the environment of weak global economic growth, compared with other commodities facing major demand problems, gold should still be the first choice in the investment field. At present, no matter whether it is the fermentation of the global epidemic or the onset of the global interest rate cut that will be led by the Fed ’s interest rate cuts, all point to gold as a safe haven, some institutions believe that gold is expected to approach the 1800 mark in the short term. In terms of technology, currently it is only one step away from the 1700 mark. From the H1 chart, macd has signs of divergence from the top. In the short term, there may be a callback, and the main idea of keeping the dips dominated can be maintained. This week the upper pressure levels are 1677, 1686, 1700, and the lower support levels are 1667, 1662, 1658, 1642.
Capstone forex trading Focus on the data today:
Germany's January seasonally adjusted industrial output monthly rate
French February BOF business confidence index
Eurozone March Sentix Investor Confidence Index
[Capstone forex trading Disclaimer]:
This analysis and trading strategy is an objective description of the current market trend. Investors need to strictly follow the trend, light positions, and stop losses! Orders cannot be completely based on trading strategies, only for reference!
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