Get started

Economics

Gold Downtrend Due To Economic EventsEveryone is aware that Gold is a 'save haven' for forex traders when economic results are bearish for a certain asset. Meaning, when some economies are performing well, Gold will reciprocate and also become bearish themselves. This can be seen through the past two daily candle sticks after Germany, one of the top 7 economies, showed positive unemployment. -12K people were foretasted to be unemployed, although it turned out to be -29K people unemployed. The ramification of these results mean that there is an even more employment surplus than there was before. This will surely appreciate the value of the EUR. As well as this positive result for the EUR, the USD has shown some bullish sentiment as well, this is due to the ISM response results. The ISM is ultimately the percentage of supply executives for industrial companies give out their numbers on exports and imports. It was foretasted by analysts that 58.1% of supply executives will give out their trade numbers, although it was actually 59.7%, this is a bullish sentiment for the USD as more than expected supply executives are confident in their trade numbers. To round up this analysis, Gold will show a short term downtrend due to Germany's appealing unemployment changes and USA's ISM responses.
TVC:GOLDShort
by forexwithfred
Fundamental analysis for U.S. Crude Oil Inventories One of the economic releases of the day was the U.S. Crude Oil Inventories which helps measures the weekly change in the number of barrels of commercial crude oil held by US firms. The way it works is that the amount of inventories helps influence the price petroleum products which can have an encounter with the inflation rates. Traders have got two things which they have to consider and one of them will be to see if increase in crude inventories is more than expected. This will show that the demand is weak which will result in a bearish for crude prices. The other thing that the traders will look will be the opposite which will be to see if a fall in inventories is gonna be less than predicted. So if the if the increase in crude is less than expected this indicates a greater demand which will mean that it will be bullish for crude prices. The economic news about crude oil came out at 15:30 and the previous forecast was -5.117M and the predicted forecast for today was -3.769M. However, as soon as the economic news was reported, it showed that the actual forecast is -6.495M. As it shows on the chart, the candlestick was a bullish candlestick which meant that traders would have gone long on this particular trade.
by LDForex_
USDCAD heading lower?Release of economic data for CAD - Employment change - GDP m/m - Unemployment rate I don't think believe just employment data alone would have a big impact on price. However, if we see positive employment data pair with a positive GDP data, AND price being resisted from the 1.29 level. It is more likely to see price drop towards that price could drop, towards the 1.2780 level. BUT it is also important to note the recent weakness in the USD during the NY sessions.
Short
by JinDao_Tai
1
Two options with EURUSD; more sided with short.I am more leaning towards the sell because of economic principles; The European Central Bank as decreased its bond buy activity which means they are pumping less money supply into the economy and in other terms, since they are not spending money in buying bonds, GDP must decrease to some extent if all other variables are constant. The formula for GDP is = C + I + G + (X - M). G is the government spending. So if all other things are relatively the same, and the government spends less money, GDP has to decrease so therefore the value of the Euro has to decrease as well since the value depends on GDP as well as other factors. That is just my economic reasoning. "The European Central Bank said Thursday it would carry on buying government bonds deep into next year but in reduced monthly amounts , a milestone policy shift that signals it will follow the U.S. Federal Reserve on a path toward higher interest rates." -The Wall Street Journal
Short
by DennisPTran07
RBA Cash Rate....Non Event?.... BUT..Although November is historically a month where interest rates have moved frequently, I believe the RBA is most likely to retain a neutral policy bias, keeping interest rates at 1.50% with additional indication that rates are likely to remain unchanged for the foreseeable future, as the low level of interest rates continues to support the Australian economy. While we might see slight optimism in the RBA's view of the economy, the overall economic/inflationary performance is still relatively week. Therefore, although the interest rate is not expected to change, I expect a slightly dovish RBA.
Short
by JinDao_Tai
Why The ECB Press Conference Plummeted EUR/USDThe European Central Bank had a conference where Mario Draghi, President of ECB, presented the ECB. One of his alarming statements were that the ECB has decided to cut their monthly asset purchases in half, from 60bn Euros to 30bn Euros, starting of January. With economic intuition, this enlightens Europe's inflation struggles it has had over the past few quarters. As well as Draghi's actions on APP, He has also insisted that quantitative easing is needed for ECB to reach their inflation rate target. Quantitative easing tends to looked as panic and a last resort for economies when trying to boost inflation rate; this can be shown from the massive decrease in value of the EUR/USD after this press conference where EUR/USD major support has been broken @ 1.70739. Lastly, U.S.A's GDP results are pending tomorrow and it is foretasted to be less that last month's 3.1% GDP, this month's forecast is at 2.5%.
by forexwithfred
2
Beat Bitcoin’s 800% 1-Year Returns: An Economist's PerspectivePart 1: WHY MOST people fail The number of people showing interest in Bitcoin and alternative digital assets is growing at an increasingly exponential rate. Some of these people may believe in the fundamentals behind the technology, while others just want to ride the wave of these mammoth sized returns. Then why are most people not making the returns that Bitcoin has achieved this year? How can you maximize your chances of making these gains, or even better, make better gains than the market leader, Bitcoin? Before I get into this any further, I would like to provide some context as to where I am coming from. I am an undergraduate economist by training at UC Berkeley with a focus on Finance and Behavioral Economics. I am by no means, an experienced trader, but what I can provide you with are experimentally proven reasons that are holding most people back from making money in this market. Economics, at least till the level that most people learn up to, assumes that humans are rational probability weighted utility maximizers. This very limited Intro to Macro Econ perspective is held by even college educated people and troublesomely, by our elected policy makers as well. Let’s put this in simple words in the context of trading. Consider the following trade: 50% Chance of losing $100 or 50% chance of making $110. Standard Economic Theory would dictate, that most people would take this trade because the expected gain would be $5. (0.50*$110-0.5*$100= $5 gain). Not surprisingly, when presented this option, most people did not opt for this trade. Because guess what? NO ONE acts rationally. At this point, you might be thinking, why am I even reading this, I already have the common sense of knowing that humans are not rational. Most people may think that they are aware of this fact, yet when the time comes, in the heat of the moment, suddenly they forget their biases, they completely ignore the fact that they must fight against our innately irrational choices and make the decision which maximizes return. More experienced traders might argue that the risk to reward ratio is only 1.1 : 1 (potential gain: potential loss), and hence it is sensible to avoid this trade if you are risk averse. (You value not losing money more than you value making money). This is where things start to get interesting. This idea gets debunked by research conducted on decision making in both professional trading firms and amateur solo traders.
BITSTAMP:BTCUSDEducation
by Zargham
12