Scan Of The Markets

The story of the day in the currency market was the renewed strength in the British Pound after the UK signaled that the October 15 deadline to get a trade deal done with the EU will drag on and talks are set to continue.

The removal on this immediate risk caused a sudden and long last flurry of buy-side activity in the currency as it topped the leader board. The order flow in the GBP index below shows the vigorous recovery.

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The Japanese Yen did quite well too as the sell-side pressure in the main US stock indices prevailed for a second day in a row. Interestingly, the USD was not able to capitalize on this reversal of risk profile.

The fact that fiscal stimulus talks in the US are going nowhere with US. Speaker Pelosi and Treasury Secretary Mnuchin exchanging position yet not reaching a coronavirus aid compromise. While the plan is to speak again on Thursday, even Mnuchin recognized that having an agreement and executing it before the election looks like a tall order.

The AUD is a currency likely to be exposed to above average vol today as the country releases its jobs report. Besides, the RBA Governor Lowe gave a strong hint of further easing ahead by noting that it is possible for the Central Bank to cut rates to 0.1%.

It is precisely the AUD/USD that takes the limelight as part of the hot trade of the day, which includes a long position during the last European session identified via my proprietary order flow script. Anyone soon to enjoy this script via Tradingview could have taken this trade, which ended up for a break even outcome.

Hot Trade Of The Day

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.

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Insights – Hot Trade Of The Day

Video Length: 00:01:41

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.