Scan Of The Markets
The strength in the British Pound was the stand out feature on Monday amid less pessimism over a no trade deal between the UK-EU coupled with growing chatter that the BOE won’t go down the route of negative rates in the near future. The final round of negotiations are upon us ahead of the EU leaders’ summit on October 15th.
On the negative rates, Deputy Governor Ramsden set the ball rolling for the GBP reinvigoration after it tamed down the chances of negative rates in the near term, a view shared by Governor Bailey. Deputy Governor Ramsden said “I see the effective lower bound still at 0.1 which is where Bank Rate is at present” and on negative rates “we are not about to use them imminently. It will take time to do this work”.
Overall, the vibes in the market place were far more propense to bid risk as reflected by the strong gains in equities, which in turned benefited the likes of the Aussie and kept the USD and JPY pressured. Be reminded, however, that the pullback in the latter two only represent a marginal hiccup in an otherwise strong bullish trend.
In today’s video analysis, I keep hammering home the concept of order flow analysis based on fractal structures. Not only I demonstrate how the read of order flow could have gotten us long in GBP/NZD, but I also study the latest ebbs and flows in the equally-weighted Forex indices through the hourly chart, which gives us a more granular view of the latest buy/sell-side business in the last 24h of trading activity.
Hot Trade Of The Day
To see an expanded version, right-click and select ‘open link in new tab‘. In this section I pick a market or several ones that presented an opportunity to buy on weakness or sell on strength based on the higher timeframes outlook. My video analysis below will further elaborate on the logic behind the trade. Today I exhibit a long trade example in GBP/NZD based off order flow fractal structures.
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Insights Into Market Studies
In this video analysis I dissect the information above. Ultimately, it is the traders’ call, via a set of entries thoroughly backtested, to enter and manage a position, hence the video is intended as educational in nature and not financial advice.
Video Length: 00:18:11
Recent Economic Indicators & Events Ahead
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Source: Forexfactory
Important Footnotes
MARKET STRUCTURES
Markets evolve in cycles followed by a period of distribution and/or accumulation. To understand the principles applied in the assessment of market structures, refer to this video. Fractal breakouts is at the epicenter to assist us in the analysis of chart structures.
MARKET MOMENTUM
In order to assess the market momentum of a particular asset, I’ve promoted for years the idea of using what I call the smart money tracker. The settings and the indicator can be obtained via our Discord room, where traders from all walks of life interact frequently. In this video I lay out the elements I look into to call trend directions.
PROJECTION TARGETS
The usefulness of the 100% projection resides in the symmetry and harmonic relationships of market cycles. By drawing a 100% projection, you can anticipate the area in the chart where some type of pause and potential reversals in price is likely to occur, due to 1. The side in control of the cycle takes profits 2. Counter-trend positions are added by contrarian players 3. These are price points where limit orders are set by market-makers. You can find out more by reading the tutorial on The Magical 100% Fibonacci Projection.
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