Sample Category Title

Sentiment remains fragile

US equities failed to hold on to gains on Tuesday but they’re taking another stab higher on Wednesday, ahead of the Fed decision later in the day.

Sentiment remains extremely fragile as we approach the end of the year and investors will be hoping that the Fed will bring an end to the sell-off that its Chairman started almost three months ago. While it is harsh to place the blame for the market turbulence solely on Jerome Powell, it was clearly the straw that broke the camel’s back and there is a hope that a dovish announcement today could go some way to undoing the damage of the last few months.

Can the Fed give us a late Santa surge

That said, Powell did attempt to clarify his views a few weeks ago but the US yield curve has since become inverted and the sell-off hasn’t abated. Expectations for a rate hike today have since been slipping but investors are still generally confident that the Fed will push ahead with it undeterred and then hold next year. This would represent a huge shift from the September meeting, after which a hike and three more were projected, based on the dot plot.

A dovish hike is widely expected today and increases next year reduced to one or two, although I wonder whether they may hold off and surprise the markets. I may not agree with Trump’s constant Fed bashing but he may have a point on this occasion. With the global economy facing lower growth in 2019, including the US, inflation in check and US stocks in correction territory, it may not be the best time to be raising rates.

I don’t think anyone would blame the Fed for taking a break this month and lining up two or three next year, depending on how the economy performs. It may even provide comfort for investors and be the catalyst for a late Santa surge, bringing the year to an end on a more positive not. Of course, this will then naturally attract criticism that the central bank is bowing to pressure from the White House but being independent doesn’t always mean going against the wishes of Trump.

Plenty of festive cheer in cryto world 12 months after it topped near $20,000

One instrument that is enjoying some festive cheer this year is bitcoin, which is enjoying a third consecutive day of gains, up almost 20% in that time. This time last year, the cryptocurrency was all the hype having just pulled off its high just short of $20,000. What many saw as just another corrective day in an otherwise ruthless rally was in fact the beginning of a miserable 12 months for crypto space. It’s been a wild couple of years for bitcoin, I can only imagine what the next 12 months has in store.

While the many enthusiasts will be hoping this Christmas will mark the bottom in much the same way that last marked the top, I remain unconvinced. The sell-off has certainly slowed and I wouldn’t be surprised if we see a squeeze higher in the near-term, but I’m not yet convinced that there isn’t still more pain to come in the new year. Bitcoin is still almost 300% higher in the last couple of years which is a quite extraordinary return.

European Commission Vice-President Valdis Dombrovskis confirmed that an agreement is made with Italy regarding 2019 budget. He tweeted that "A lot of hard work and negotiation went into finding solution on the Italian budget. Let's face it: the solution on the table is not ideal. But it allows us to avoid an Excessive Deficit Procedure at this stage, provided that the agreed measures are fully implemented."

He added that "I hope this solution would also be the basis for balanced budgetary & economic policies in Italy. Italy urgently needs to restore confidence in its economy to ease financial conditions and support investment. Ultimately, this is what will support purchasing power of all Italians."

https://twitter.com/VDombrovskis/status/1075350321013104640

https://twitter.com/VDombrovskis/status/1075350994588966912

Reuters reported that two rather low level US and China officials clashed at the WTO today in closed-door talks. US Ambassador to WTO Dennis Shea accused China of doing "outright steal" technology of the US and said "this is not acceptable".

China's envoy said US administration's "reckless actions" were the root cause of the crisis in global multilateral trade system. And he hoped that both countries can "move in the same direction with mutual respect to contribute to the stability of world economic and trade environment".

Upside risks dominated the USD/CAD currency pair on Tuesday. The US Dollar appreciated about 105 base points against the Canadian Dollar by the end of yesterday's trading session.

However, after reaching near a resistance level formed by the weekly R2 at 1.3500, the exchange rate began to decline.

Technical indicators demonstrate that the bullish momentum is likely to continue within this session.

Nevertheless, it is expected that the currency exchange rate makes a brief retracement towards the 50-hour SMA at 1.3420 today.

If you want to start scalping on Forex, you need to rethink your whole infrastructure.

Step 1. Pick a Broker

Scalping is different from casual day trading and tends to cause a lot of problems for brokers due to a high amount of orders. Some brokers don't allow scalping outright; others raise the spreads until it becomes unprofitable.

Most brokers do not advertise that they do not support scalpers, so you need to ask their support or scout their websites looking for favorable conditions. Here's what you need to check for:

• Tight spreads. Some brokers offer Premium accounts with 0 spreads for an additional fee, look out for those.
• Leverage. If you are confident in your scalping skills, leverage is a great way to increase your profits. Just learn about the broker's margin call protocols; sometimes they are not suitable for scalping.
• Trading platform. You should know your trading platform as the back of your hand. Also, it should allow for quick order management, ideally — in a single click.
• Response speed. Slow broker systems may lead to slippage and sudden losses of otherwise profitable positions. Always check out how responsive your broker's system is.
• Reliable support. Sometimes things go wrong, and you need a fast way to reach out to your broker. Having a number to call or an open chat window allows to salvage the most out of a bad situation — as long as the support is competent.

If you don't want to waste time looking for options, JustForex has pretty decent ECN Zero accounts. The commission from each trade is not ideal but the spreads are absurdly tight, and the response speed is stellar. They are also using MetaTrader 4 without any modifications while their support is proactive and easy-to-reach.

Step 2. Pick a Market

You want to trade on the markets that have the most liquidity — which pretty much locks you into the major currency pairs. The best of the bunch are:

• EUR/USD and GDP/USD. The Brexit conundrum reigns supreme over the British and European currencies. Almost every day brings more and more news that sway the market.
• USD/JPY. The disturbances in the American politics resonate well with this currency pair — even if Japan is going through a period of relative calmness.

Although, you can trade on any other currency pair too. The only problem would be the low number of situations you can take advantage of — however, this might be less stressful and ultimately beneficial for newcomers.

Step 3. Establish Your Workplace

With most strategies, you can take a moment to read the news, have a drink or watch a cartoon. Scalping, however, is a never-ending chain of deals that demand your constant attention.

If you want to be a successful scalper, you need to create an environment where you won't be distracted by the outside world. If you work from home, consider creating a separate room only for work.

1. Find the least-trafficked room. Otherwise, either your roommates will distract you, or you will have to intrude on their lives. If you live alone, ignore this point.
2. Remove all distractions nearby. While you might want to read a book on your lunch break, you should do it in a different room. Without distractions, you will be able to concentrate on your work and won't be tempted to look away from the charts. You can make a case for a fidget cube or a hand grip, but everything else has to go.
3. Get comfortable. You are going to spend at least 8 hours a day in this room, so get a soft chair and a table that fits your height. A large screen, an ergonomic keyboard, and a vertical mouse will be a plus.
4. Declutter often. Remove the unnecessary stuff from both your real and virtual workplaces. All those paper piles, dirty coffee mugs, and other knick-knacks have to go away before you begin trading. Same goes for the unused desktop icons, browser toolbars, and other distractions.

Finally, don't forget to take the eye-breaks every half-an-hour — just closing them for a minute or two will help.

Step 4. Begin Scalping

There are many theories behind scalping but if you want to make money here and now — the easiest one is a so-called "calm river" strategy. It's not as profitable as the full-on scalping but allows for some leniency and will serve as a great introduction.

You are going to need:

• A 5-minute timeframe on a currency pair with high liquidity;
• Two exponential moving averages — 50 and 20 MA.

Wait until the current price of the quote enters the area between 20 and 50 MA. If it stays there for three candlesticks or more — false alarm, go back to waiting.

But if the price attempts to go out of those bounds — immediately open two orders in the direction of the price movement.

• Close both by StopLoss if the price reverts behind the local extremum;
• Close the first one by TakeProfit when it reaches the StopLoss value;
• Close the second one manually when the trend starts to reverse.

Dual orders allow you to cover your expenses with the first one while chasing the wild profit with the second one. Even if you lose the second order, you will remain in the green.

If you need more details, here's a checklist:

Open a long position when:

• The price is above both 20 and 50 MA;
• The 20 MA is higher than the 50 MA.
• Both MAs have an upward trend;
• There is some space between the MAs;
• The price attempts to leave the area between the MAs with less than three candlesticks closed between them;
• The last candle that opened in-between the MAs closes above the 20 MA.

Open a short position when:

• The price is below both 20 and 50 MA;
• The 20 MA is lower than the 50 MA.
• Both MAs have a downward trend;
• There is some space between the MAs;
• The price attempts to leave the area between the MAs with less than three candlesticks closed between them;
• The last candle that opened in-between the MAs closes below the 20 MA.

Just remember to try this strategy on a practice account first. Sometimes it needs slight adjustments to different markets.

Conclusion

Scalping is a risky but profitable method of making money on Forex. It's not for everyone and demands a lot from its followers — but it also offers unmatched profits.

There are no guarantees that you can handle scalping and it will be profitable for you — but it is worth a try on a practice account. And once you are ready to trade with real money, make sure that your broker treats the scalpers fairly.

Upside risks prevailed in the market on Tuesday, thus sending the New Zealand Dollar to appreciated about 77 base points against the US Dollar.

However, after hitting a resistance level formed by a traditional weekly pivot point at 0.6881, the exchange rate began to decline. As a result, the rate breached the 200-hour simple moving average at 0.6852.

Taking into consideration the price level settings, it is likely that the NZD/USD currency exchange rate continues its upside journey during the following trading session. The potential target for the currency pair will be at the upper boundary of an uptrend line at 0.6920.

The price movement of the single European currency versus the Japanese Yen was guided by a junior descending channel pattern on Tuesday. The exchange rate bounced off its lower boundary at 127.72 during yesterday's session.

The currency pair breached the 50-hour simple moving average at 128.01 during the first part of Wednesday's trading session.

Given that the EUR/JPY currency exchange rate has breached the 50-hour SMA, the next target for bullish traders will be near a resistance cluster formed by the combination of the 100– and 200-hour SMAs and the weekly pivot point at the 128.49 region.

The price movement of the AUD/USD currency pair was guided by a junior ascending channel pattern. The exchange rate bounced off its lower boundary of the channel pattern during the end of the previous session.

As for the near future, it is likely that the Greenback will maintain the newly formed ascending channel pattern. The short-term target for bullish traders will be at the upper boundary of the channel pattern at 0.7220.

On the other hand, the currency exchange rate could reverse from the current price level and aim for the bottom border of the ascending channel during the following trading session.

During the previous trading session, the European Single Currency was supported by the 200-hour SMA to surge towards the weekly R1 at the 1.1410 mark. On Wednesday morning, the rate was trading near the weekly R1 at the 1.1403 mark.

Most likely, the currency exchange rate will get resisted by the weekly R1 at 1.1403 to push the rate to trade sideways to stay at the 1.1380 level.

On the other side, the currency exchange rate could break the resistance of the weekly R1 to move towards the 50.00% Fibonacci retracement level at the 1.1462 mark.

During the previous session, the British Pound was supported by the 200-hour simple moving average to trade at the 1.2660 level. On Wednesday, the currency exchange rate was trading at the 1.2640 level.

Most likely, the British Pound will keep trading sideways to stay at the 1.2640 level. Moreover, the 55-hour and the 200-hour simple moving averages will support the rate during the day.

On the other side, during today's UK CPI y/y data release at 9:30 GMT, the British Pound could break the resistance of the descending medium pattern line at 1.2680 level to move towards the weekly R1 at the 1.2740 mark.