Scan Of The Markets
The US Dollar and the Japanese Yen were the clear winners last week, while the Oceanic currencies and Gold were decimated. Sandwiched in the middle we find a group of four currencies (EUR, GBP, CAD, CHF) characterized by a far less acute imbalances of flows. US equity indices have been fairing far better, which helps explain the stalling in aggressive buy-side flows in the USD, JPY from earlier in the week.
Fundamentally, all eyes will be on the first televised debate between Trump and Biden on Tuesday and the subsequent poll reactions. Should Trump come up ahead in the debate, that likely to be perceived as a ‘risk on’ play for the markets. Besides, any news on the US fiscal support front will also be closely scrutinized, while on the other side of the pond the EU/UK trade talks will too take the limelight. Later on Friday, US labour market data is also due (last before the US election).
As we kick off a new week, I’ve taken the time to provide my take on the state of affairs in the currency markets from an order flow perspective by adding a new script I call ‘OFA’. What this does is to create in the chart zig-zag type studies of the most recent buy and sell-side waves based on breaks of fractal breakouts and whether or not buyers or sellers become the new force in control. I then account for the magnitude and velocity of each wave alongside the aggregation of tick volume in each leg to get a global objective read.
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: 00:15:52
Recent Economic Indicators & Events Ahead
(Click on image to enlarge)
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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