Will Most Stable Currency Pair Finally Break Its 20-Year PatternThe foreign exchange market stands at a pivotal crossroads as the seemingly unshakeable euro-dollar relationship faces its most significant test since the 2022 energy crisis. Traditional market dynamics are being challenged by an unprecedented confluence of factors: the return of Trump-era trade policies, escalating geopolitical tensions in Eastern Europe, and diverging monetary paths between the Federal Reserve and European Central Bank. This perfect storm has pushed the euro to levels not seen since October 2023, prompting leading financial institutions to reassess their long-held assumptions about currency stability.
What makes this moment particularly compelling is the broader economic context. While previous threats to euro-dollar parity emerged from singular crises, today's challenge stems from structural shifts in global trade architecture. Deutsche Bank's analysis suggests that proposed trade policies could fundamentally alter international capital flows, with the potential to drive the euro below parity to 0.95 or lower – a scenario that would rewrite modern forex history. This isn't merely about numbers; it's about a potential reshaping of global economic power dynamics.
The most intriguing aspect of this development lies in its timing. As we approach a period traditionally characterized by dollar weakness – December has seen the greenback decline in eight of the past ten years – markets face a fascinating contradiction. Will historical seasonal patterns prevail, or are we witnessing the emergence of a new paradigm in currency markets? The answer could reshape investment strategies across the globe and challenge long-held beliefs about currency market dynamics. For investors and market observers alike, the coming months promise to deliver one of the most compelling chapters in recent financial history.
Economicnews
Global Economic News & MarketsGlobal Economic News & Markets
In our interconnected world, it’s more important than ever to stay up to date with global economic news. The link between economic events and financial markets emphasises that traders need to be well-informed. This FXOpen article looks at the significance of global economic news and its impact on financial markets. Through expert judgement and attention to long-term trends, the article aims to equip you with the knowledge you need to make wise financial decisions.
Top Global Economic News
Why is it so critical to keep abreast of current global economic news? The answer lies in how much influence they have on the financial markets. News can cause market volatility and influence long-term trends. Top global economic news can be divided into five categories:
- Central bank announcements
- Economic indicators such as GDP growth, employment, and inflation
- Trade agreements and geopolitical tensions
- Fiscal policy, government initiatives, and infrastructure investment
- Earnings reports of major corporations
Market Reactions
Stock market indicators, currency market fluctuations, changes in commodity prices and the level of volatility reflect market sentiment. Traders try to learn as much as possible about them to make informed decisions.
Stock Market Performance
When economic data or corporate news is released, it can trigger immediate reactions in the stock market. For example, when publicly traded companies release their earnings reports, analysts assess whether the company has met, exceeded, or fallen short of expectations. Positive earnings often lead to stock price increases, while disappointing results can lead to price declines.
Individual stocks affect the direction of the indices they are included in. Indices serve as benchmarks or references for evaluating the overall performance of a specific stock market or a particular sector within it. They provide a quick and easy way to assess whether the market, as a whole or in part, is doing well or poorly. Also, indices serve as a benchmark of the market sentiment.
Volatility Level (VIX Index)
The Volatility Index, often referred to as the VIX or fear indicator, measures market volatility and trader sentiment. A high VIX indicates that traders expect significant market fluctuations, indicating uncertainty or fear in the market. Typically, the VIX rises when the level of fear and uncertainty is high.
Currency Market Fluctuations and Exchange Rate Shifts
Central banks set interest rates, and changes in these rates can significantly impact a country's currency value. Higher interest rates typically attract foreign capital, leading to an appreciation of the currency. Conversely, lower rates may lead to depreciation.
Various economic indicators, such as GDP growth, employment figures, inflation rates, and trade balances, provide insights into a country's economic health. Positive economic data can boost a currency, while negative data can weaken it.
Changes in Commodity Prices and Their Drivers
The fundamental driver of commodity prices is the balance between supply and demand. Factors such as population growth, economic development, and shifts in consumer preferences can influence demand, while supply can be affected by weather conditions, geopolitical events, and production decisions by producers.
Regional Focus
Not all regions face the same economic challenges. There are emerging markets with promising growth prospects and developed economies with unique challenges. Let’s explore some specific regions and countries that are particularly noteworthy in the current economic landscape.
Emerging Markets
Emerging markets refer to economies that are in the process of rapid industrialisation and experiencing substantial economic growth. They tend to be characterised by a growing middle class and urbanisation. They are seen as long-term growth engines for the global economy.
- Many investors are attracted to emerging markets because of the opportunity for high returns in sectors such as technology, consumer goods, and infrastructure.
- To diversify risk, traders can allocate a portion of their portfolio to emerging markets. These markets may not necessarily correlate with developed markets, providing a buffer during global economic downturns.
- Investing in emerging markets comes with risks. Political instability and currency volatility can create uncertainty.
Developed Economies
Developed economies, generally characterised by stability and strong financial systems, also face specific challenges. For example, many advanced economies have ageing populations, which can put strain on social protection and health care systems.
- Some developed economies have experienced long periods of low economic growth. This is due to demographic trends and low labour productivity.
- Managing public debt and deficits is challenging for developed economies. The balance between social spending and fiscal responsibility is a key issue.
- Developed countries are highly dependent on international trade, which makes them vulnerable to trade disputes and supply chain disruptions.
Long-Term Trends
Traders and investors explore technological advancements, sustainable investing, and demographic shifts to guide their investment strategies for years to come.
Technological advancements are a driving force behind economic and market transformation. Key points to consider include the rise of e-commerce, FinTech, AI and automation, blockchain and cryptocurrency, renewable energy and green technologies.
Environmental, Social, and Governance (ESG) factors are increasingly influencing investment decisions and corporate behaviour. ESG-focused investments consider a company’s impact on the environment and society. Companies that demonstrate a commitment to social responsibility and fair labour practices tend to attract investors.
Demographic changes are altering consumption patterns, labour markets, and economic dynamics. Factors to keep in mind are ageing populations in developed countries, rapid urbanisation, consumption habits and preferences of Millennials and Gen Z, and increased global mobility.
Insights from financial analysts and market experts provide valuable context. They interpret recent economic data, offer forecasts, and recommend investment strategies. You may, for example, check out global markets news at Reuters or read JPM global markets news. Of course, you should double-check for yourself, but you can find some main areas to consider in their analyses.
Final Thoughts
The significance of economic events cannot be overstated, and their impact on financial markets emphasises the importance of adaptation. It’s best to monitor economic news globally, seek expert advice and consider long-term trends when making financial decisions. Informed and adaptable investors and traders are most successful in an ever-changing global economic and market environment.
You can open an FXOpen account and read our blog to learn more about potential opportunities and ways to mitigate risks. Also, you can use the TickTrader platform to conduct technical analysis and benefit from advanced charts.
This article represents the opinion of the Companies operating under the FXOpen brand only. It is not to be construed as an offer, solicitation, or recommendation with respect to products and services provided by the Companies operating under the FXOpen brand, nor is it to be considered financial advice.
JSE ALSI 40 is a mess - Bearish bias to 63,460Yep, the JSE ALSI 40 is in yet another Twilight Zone.
We see sideways motion, prior downtrend and there are sideways indicators.
The bearish bias part of it is that price is below 200MA.
The RSI is showing lower highs (Bearish divergence).
We also see low volume on the buying side.
More importantly, we have a flat monday with no conviction...
And if the price does break below the Symmetrical Triangle, we could see downside in the week.
The target could be very well to 63,460.
Here is your weekly wrap up.
The U.S. stock markets mostly closed higher, with a significant highlight being the S&P 500 surpassing the 5,000-point level for the first time.
The growth was driven primarily by big tech companies and a variety of sectors including software, semiconductors, communications, media, regional banks, trucking, apparel retailers, auto suppliers, and Chinese tech stocks showing notable performance.
Conversely, sectors such as real estate, energy, food & beverage, cruise lines, and casual diners lagged behind.
Microsoft stood out by achieving a 1.6% rise in its shares, which boosted its market capitalization to $3.125 trillion, marking the highest valuation ever for an American company. Additionally, the yield on the 10-year Treasury note closed at 4.166%.
In europe:
In Europe, equity markets ended the day lower, with technology, media, and healthcare sectors leading the gains, while food & beverage, real estate, and utilities faced declines.
General indices:
Market performance indices closed as follows:
S&P 500 up by 0.57%,
Dow Jones Industrial Average down by 0.14%,
Nasdaq up by 1.25%,
FTSE 100 down by 0.30%,
DAX down by 0.22%, and
CAC 40 down by 0.24%.
Asian markets
Asian equity markets saw minimal activity, with most closed for the Lunar New Year holidays.
However, there was a notable increase in holiday travel activity, with Xinhua reporting the addition of 1,873 passenger trains across the railway network on Friday.
Markets such as Nikkei, Hang Seng, and Shanghai were closed, while the ASX 200 saw a modest increase of 0.19%.
In South Africa
In South Africa, the Johannesburg Stock Exchange (JSE) closed lower, primarily dragged down by the resources sector, which fell by more than 2% due to weaker metals prices.
The precious metals and mining sector saw a decrease of 2.22%, although industrials managed a modest gain, supported by solid performances from companies like Bidvest, Naspers, and Richemont.
The yield on the 10-year government bond closed at 9.955%.
Thank you for reading and enjoying the daily wrap up and analyses we provide to Trading View for you!
BTCUSD IdeaHey, rise and shine, fellow wave riders! 🌅🏄♂️ So, check it out: we've totally shifted into a bullish medium-term vibe, but there's this little hitch - the lack of volume backup. It's like catching a wave without that perfect gust of wind, you know?
Our radar's picking up some potential liquidation action, possibly a ride to that 30k zone. 🌊 But here's the deal: we're bouncing off that weekly demand, which is pretty typical, bro.
Hold up, though! 🛑 We're hanging ten and waiting for this week's economic numbers for the dollar to fine-tune our game plan. Precision is key, man!
And you feel me on this one, right? Buying at premium prices is like trying to ride a wave that's already crested - not our style at all! We're all about catching that perfect swell at just the right moment.
So stay stoked, stay patient🤙🌊
NQ Power Range Report with FIB Ext - 6/27/2023 SessionCME_MINI:NQU2023
- PR High: 14883.00
- PR Low: 14862.50
- NZ Spread: 46.0
Prev week's low broken
- Inventory of PR-Low
Economic Events
08:00 – Building Permits
08:30 – Core Durable Goods Orders
10:00 – CB Consumer Confidence
- New Home Sales
Evening Stats (As of 1:05 AM)
- Weekend Gap: N/A
- Session Open ATR: 234.85
- Volume: 22K
- Open Int: 252K
- Trend Grade: Neutral
- From ATH: -11.2% (Rounded)
Key Levels (Rounded - Think of these as ranges)
- Long: 15533
- Mid: 15247
- Short: 14675
Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
NQ Power Range Report with FIB Ext - 3/10/2023 SessionCME_MINI:NQH2023
- PR High: 12011.75
- PR Low: 11955.00
- NZ Spread: 126.25
Evening Stats (As of 1:25 AM)
- Weekend Gap: -0.14% (closed)
- 8/19 Session Gap: -0.04% (open > 13237)
- Session Open ATR: 247.57
- Volume: 44K
- Open Int: 244K
- Trend Grade: Bear
- From ATH: -27.9% (Rounded)
Key Levels (Rounded - Think of these as ranges)
- Long: 12959
- Mid: 12392
- Short: 11820
Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
NQ Power Range Report with FIB Ext - 2/16/2023 SessionCME_MINI:NQH2023
- PR High: 12750.50
- PR Low: 12731.25
- NZ Spread: 43.25
Evening Stats (As of 1:40 AM)
- Weekend Gap: N/A
- 8/19 Session Gap: -0.04% (open > 13237)
- Session Open ATR: 275.31
- Volume: 27K
- Open Int: 271K
- Trend Grade: Bear
- From ATH: -23.8% (Rounded)
Key Levels (Rounded - Think of these as ranges)
- Long: 12959
- Mid: 12392
- Short: 11820
Keep in mind this is not speculation or a prediction. Only a report of the Power Range with Fib extensions for target hunting. Do your DD! You determine your risk tolerance. You are fully capable of making your own decisions.
The EUR USD analysis for todayDear friends,
Please share with me your thoughts about this analysis
it's based on the trend lines and the Fibonacci retracement
But be should wait the important economic news soon and then we will see what will happen
Also we are below the 200 MA and the VWAP so the market looks like it want to go up but we should wait
GC (GBP/CHF) Inverted hammer building entry Vwap GC (GBP/CHF) is building Inverted hammer in 4hr Tf Vwap good for entry, Z distance from Vwap is highly overbougt
Day Range is +200 pips so be very careful and mindful. Sterling falls below 1.30 in 10 months.
Tomorrow Economic calendar event & news can affect pound heavily!!
Economic News for the week of August 24thNew format figured i would split up the economic news from stocks news into two charts. Will post economic news on the EURUSD charts while stock news on the SPY charts. This is in order to cut down on space used up in the charts.
www.cnbc.com
www.telegraph.co.uk
seekingalpha.com
www.reuters.com
www.reuters.com
www.wsj.com
www.cnbc.com
www.reuters.com
seekingalpha.com
seekingalpha.com
www.irishtimes.com
seekingalpha.com
www.nytimes.com
www.census.gov