Scan Of The Markets

It was largely an undecisive and choppy day in the markets on Thursday with both the USD and the Yen giving back a small portion of the huge gains made over the last week. Meanwhile, the Canadian Dollar outperformed, followed by a solid run in the Euro and Pound. The Aussie and the Kiwi saw a small round of buying too at last.

But the conviction in a protracted recovery in risk sentiment is simply not there yet. When looking at the US equities, which becomes the bellwether to take directional gauges in the rest of global indices, the S&P 500 went back and forth within a 1.5% range only to end eking a marginal gain for the day. The same can be said for the Nasdaq.

By the end of the day, we are none the wiser. In terms of trending markets, we are still predominantly in the midst of a decent environment to jump on developing trends, especially when cross-checking risk-off currencies against the Oceanic complex. Some shorter term opportunities are also up for grabs to long CAD.

On the fundamental front, US jobless claims came with few variations, not acting as a catalyst for volatility. Earlier in Europe, Germany’s IFO survey saw a minor uptick in business confidence, but don’t add too much weight as other sub-indices disappointed. Going forward, it’s a quiet day in the economic calendar with only US durable/capital orders and NY Fed President Williams talking on COVID-19 job market impacts, even if no surprises expected post FOMC.

Also, heading into the weekend, I picked up the following by NAB: “Some relief is in store for Victoria with Premier Andrews likely to ease lockdown restrictions on September 28 given the 14-day moving average for Metro Melbourne at 26.7 has moved below the 30-50 benchmark required for easing of restrictions. Also be watchful for a revised re-opening schedule given the sharper than expected fall in virus numbers – the AFR notes Victoria only recorded 5 new virus cases yesterday, which was the third single-digit day of reported cases this week when accounting for reclassifications.”

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’s is a follow up in USD/CHF.    

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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: 00:16:26

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.