Hotforex.com - Market Analysis and News.

Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Tue Mar 17, 2020 5:47 am

Date : 17th March 2020.

What is a Circuit Breaker and How it Works? 17th March 2020


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The FOMC’s historic reactions to the COVID-19 spread, with its emergency 100 bp rate cut on Monday 16th of March pledging infinite liquidity, did nothing to soothe investor worries, and indeed may have sharpen recession concerns. Those fears, along with Fed coupon purchases, underpinned a strong bid in Treasuries which saw yields from the belly outward richen over 20 bps.

Hence Monday’s opening was delayed as the indexes were limit down. After the FOMC’s action, the USA30 posted its largest point decline in history, sliding -2997 points (-12.9%), and the USA500 fell 11.5%, both triggering an automatic 15-minute halt. This is the third time in the past two weeks that major US and foreign indices hit their emergency circuit breaker as the market opened; this isn’t the first time that a market has been halted due to massive volatility, however it is not something that you see often. Last time it was the turmoil of the 2008 housing crisis that put the country into recession.

But what is a circuit breaker and how does it work?

Circuit breakers were introduced to prevent another event like the Black Monday of 1987, when the Dow Jones fell by 22.6%, in a single trading day, by pausing trading if the S&P 500 price falls too low.

After being tested for the first time in 1997, they were triggered again in March 2020. So, why did that happen and how do circuit breakers work?

What are circuit breakers?

Circuit breakers, which are calculated daily, are set at 7%, 13% and 20% of the closing price of the S&P500 for the previous day. If the price drops 7% in a single session, trading is halted for 15 minutes, and, depending on what happens next, trading may be halted again temporarily or for the rest of the day.

How do circuit breakers work?

There are three levels:

A level 1 circuit breaker is applied when there is a single-day, single-session decline of 7%. Trading is paused for 15 minutes to give traders the chance to reevaluate their options and stop panic selling.

If there is improvement when trading is reopened after the break, the session will continue as usual. If the drop continues and reaches 13% before 3:25pm (New York time), a level 2 circuit breaker will be applied and trading will be stopped for another 15 minutes.

If the drop continues still further and reaches 20%, the situation is considered critical and a level 3 circuit breaker will come into force. At this highest level, trading is stopped for the rest of the day regardless of what time it is.

Are circuit breakers used only for market indices?

No, they’re not! Individual securities have their own circuit breakers, known as the “Limit Up-Limit Down rule”, which means that trading is stopped whenever the price moves too far up or down away from predetermined acceptable levels.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Wed Mar 18, 2020 6:14 am

Date : 18th March 2020.

FX Update – March 18 – King Dollar 18th March 2020


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The Dollar has remained firm amid nervous global markets, with demand for cash dollars remaining high while some traditional safe haven assets, such as gold and US Treasuries, have nonetheless remained under pressure as investors rebalance portfolios and build cash cushions to cover margin calls. US bonds have been falling despite the Fed buying up to $40 bln worth daily in its revamped QE program. Some market narratives are also pointing to concerns about the US fiscal position light of the US government’s announcement for a $1.2 tln stimulus package. Gold prices are down 1.5%, though remain off the three-and-a-half-month low seen on Monday. Stock markets turned lower during the Asian session and opened in Europe down some 3-4%.

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In currencies, movements have been relatively contained so far today. The Yen has outperformed, though concurrent Dollar strength has seen USDJPY lift back above 107.00 from a 106.76 low. The commodity and most developing world currencies remained under pressure. AUDJPY declined by over 1%, and has breached the 11-year low seen yesterday, trading at S1 – 63.80. AUDUSD remained heavy, also breaching the 17-year low seen yesterday at 0.5960, it trades at 0.5936. NZDUSD printed a fresh 11-year low at 0.5911. USDCAD, amid its biggest monthly gain since January 2015, remained buoyant but still held below the four-year high seen yesterday at 1.4276.

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USOil prices hit a new major-trend low at $25.50, which is the lowest nominal level traded since May 2003. EURUSD ebbed back under 1.1000, but has so far remained shy of the three-week low seen yesterday at 1.0956. Regarding the coronavirus, there are concerns that the massive global fiscal and monetary stimulus measures, even when targeted well, will simply not be able to fully mitigate the impact of draconian lockdowns in an increasing number of economies.


Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Fri Mar 20, 2020 6:56 am

Date : 20th March 2020.

European FX Update – 20 March 2020 20th March 2020


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Interventions and the threat of interventions has seen the dollar soften while commodity and many developing world currencies have rebounded strongly following a period of pronounced underperformance. Also in the mix is the plethora of central bank actions to shore up liquidity and loosen monetary policy, along with the massive fiscal rescue packages being assembled by governments across the world, which have given markets opportunity to settle from coronavirus anxiety. Russia and Brazil have intervened in forex markets over the last day, buying their domestic currencies and selling dollars. The Russian ruble crashed by over 34% from early January levels before the Russian central bank stepped in yesterday. The Norwegian central bank also threatened to intervene yesterday following a similar 30%-odd dive the crown. South Africa and Australia have also signalled readiness to intervene to support their currencies. For many countries with borrowings in dollars, the massive depreciation in their domestic currencies, and strength in the dollar, has been increasingly threatening at a time when most emerging market and developed-world economies are either headed to or are already in recession. There is rising odds for coordinated action to blunt dollar strength. Demand of cash dollars has been intense in recent weeks due to the funds need to cover losses and meet fund redemptions.

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Among the main currencies today, the narrow trade-weighted dollar index (DXY) has declined by 1.3%, to 101.50. The index peaked at a 38-month high yesterday at 102.99. EURUSD has concomitantly lifted by over 1% to levels above 1.0800. Cable rallied by nearly 3% to levels back above 1.1800, up from yesterday’s 35-year at 1.1451. USDJPY dropped back to the lower 109.00s from levels above 111.0, though the yen still weakened against many other currencies.

Biggest (FX) Mover @ (09:30 GMT) AUDUSD (+3.48%) – Rallied from 0.5680 at open, over 0.5800 & 0.5900. The MA’s aligned higher, RSI (67) positive, MACD histogram & signal line rising and breached 0, Stochastics moving higher but not yet into OB zone. – H1 ATR 0.0063, Daily ATR 0.0205.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Tue Mar 24, 2020 8:07 am

Date : 24th March 2020.

FX Update – March 24 2020


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AUDUSD, H1

Currencies moved in a risk-on formation, with the Dollar, Yen and Swiss franc weakening against most other currencies, with the commodity and many developing-world currencies outperforming. This came with S&P 500 futures rallying strongly, more than reversing the 2.9% closing loss the cash version of the index saw yesterday on Wall Street. Oil, most base metals and other commodity prices also rose. Asian stock markets also rallied. The massive $2 tln coronavirus stimulus bill in the US looks near to being passed in the Senate. The Fed’s ultra-aggressive pledge of unlimited dollar funding also appears to be having some success. The US 2-year note yield dropped yesterday to a near seven-year low of 0.79%, which, although higher today, concomitantly put a lid on the Dollar. The narrow trade-weighted USDIndex dropped by about 1% in printing a four-day low at 101.45, extending the correction from the 38-month high that was seen last Friday at 102.99. EURUSD and Cable concurrently lifted just over 1%, to respective five-day and intraday highs at 1.0866 and 1.1695. The biggest mover out of the main dollar pairings and associated crosses has been AUDUSD, which lifted by over 2%, making a four-day peak at 0.5975. The Aussie dollar has now rebounded by over 8% from the 18-year low it saw last week, at 0.5507. With oil prices posting a near 5% rally, USDCAD turned lower, back below 1.4400, though the pair remained above yesterday’s low at 1.4335.

As for the coronavirus, more countries have been going lock-down, the latest of note being the UK, and the major question about how long it will be before something approaching normal economic activity resumes. Incoming preliminary March PMI survey data have and will continue to paint a grim picture of the economic consequences to date.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Wed Mar 25, 2020 8:04 am

Date : 25th March 2020.

FX Update – March 25 – USD Cools


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USDCAD, H1

The commodity (AUD again today’s best performer) and many developing world currencies have continued to rebound, while the Dollar, Yen and Swiss franc have traded generally softer. This comes with Asian stock markets rallying and European markets opening positively after the DJIA equity index posted its biggest single-day rally on Wall Street since 1933. The US Senate and White reached agreement on a $2 tln fiscal stimulus package, which joins a growing list of countries around the world to have unveiled bazooka-sized spending packages, joining ambitious central bank monetary stimulus efforts aimed at mitigating the impact of virus containing measures. This comes amid tentative signs that the lockdown in Italy is starting to work, as new cases and the death rate ebb. There are also other signs of encouragement, such as news that 20% of US companies in China have reported that they have returned to normal operations, showing that there is economic life after lockdown.

Among the main currencies, USDJPY has traded neutrally so far today, while most Yen crosses, especially those with a commodity or developing world currency counterpart, have lifted. USDJPY has held with a range of 110.75-111.50, narrow by recent standards and well within the bounds of yesterday’s range. EURJPY has posted modest gains, but remained below yesterday’s peak. AUDJPY, amid its fifth consecutive up day, posted a 10-day high at 67.25. AUDUSD lifted by 1.2% in printing an eight-day high at 0.6060, extending the rebound from last week’s 18-year low of 10%. USDCAD fell to a five-day low at S2 and below 1.4300 at 1.4299, with the Canadian Dollar continuing to correlate closely with oil prices, which today extended over 3% higher to five-day highs, but remains capped at $25.00. EURUSD has traded higher, to the mid 1.0800s, but has remained comfortably within Tuesday’s range.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.


Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Thu Mar 26, 2020 8:19 am

Date : 26th March 2020.

GER30: Back to risk-off….but for how long?


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EGBs have rallied with Treasuries and with Eurozone spreads coming in after the ECB confirmed that it will drop issuer limits in its EUR 750 bln QE program. Tapping the ESM and finally using Draghi’s OMT program are also on the cards for the Eurozone as governments try to limit the impact of the pandemic. Despite the massive US stimulus package and additional promises from European officials, stocks markets headed south in Europe and US futures are also broadly lower, ahead of likely dismal US jobless claims.

The 10-year Bund yield was down -3.9 bp at -0.308%, the Gilt yield down -3.7 bp at 0.398% US Treasury yields had declined -6.1 bp to 0.806%. Greek 10-year rates dropped nearly 34 bp as Eurozone spreads narrowed. GER and UK100 meanwhile are both down -2.1%.

FX market volatility has been on the decline this week, as massive global stimulus has ratcheted markets away from panic mode that prevailed last week. However the market will continue to remain subject to high volatility and overall underperformance as long as the coronavirus contagion remains in a state of increasing spread.

The plethora of global monetary and fiscal responses have helped stocks finding a sustainable reprieve, however so far today as volatility remains high we have seen pullbacks. Whether these are corrections or signs of reversal, no one knows yet!

In the EU, GER30 in contrast with UK100, has gain some ground, having a distance of more than 1600 points from 7-years lows. This reflects to more than 35% reversal, but does it look sufficient enough in order to believe in a reversal? Technically responding, the sentiment that we have seen that last few sessions presents positive bias in the short term, with the asset holding bottom above 9,500 (23.6% Fib. level at 9,523) despite the doji Wednesday. This provides relief, that 38.2% Fib is still on the cards. A breakout above the short term pennant formation could open the doors towards a retest of 38.2% Fib. retracement level at 10,358 (this could fill March 12 gap) .

In the medium term meanwhile, daily momentum remain negative even though they are giving signs if weakness. RSI recovered from oversold levels but remains below neutral zone and MACD is at the negative are however it is extending above its signal line suggesting decreasing negative bias.

There is clearly plenty of volatility still to play out, but the way this move is shaping, weakness is now being bought into.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Andria Pichidi
Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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Re: Hotforex.com - Market Analysis and News.

Postby HFblogNews » Fri Mar 27, 2020 7:56 am

Date : 27th March 2020.

FX Update – 27 March 2020.


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USDJPY, H1

The Dollar declined and then recovered some of its losses, which saw the narrow trade-weighted USDIndex print a nine-day low at 99.15 before recouping levels back above 99.40. At the lows, the index was showing a correction of 3.2% from the 38-month high that was seen last week, which can be credited to the Fed’s ultra-aggressive dollar printing activity. There has also been a side theme of pronounced losses in USDJPY and Yen crosses, which look out of sync with the usual correlative pattern in light of a backdrop of mostly-higher stock and commodity markets in Asia today (which often times, especially in the prevailing crisis, would be associated with a softening in the Japanese currency). The demand for Yen was reportedly driven by repatriation of Japanese investment funds, according to several market reports and narratives, even though the timing — just a few days before Japan’s financial year end — seems a little strange. USDJPY, aided by broad Dollar weakness, dropped by about another 1% in printing a one-week low at 108.25. EURJPY, AUDJPY and most other Yen crosses declined, too, which amounted to a correction. Subsequently, the Yen gave back up to half of its gains as the European interbank market picked up the reins, and expectations, should risk appetite hold up, the Yen could soften from here. The USDJPY and the crossing EMA strategy (H1) closed out in the last hour as the 9-period EMA was broken at 108.89 from an entry at 111.14 on March 25, a 220 pip move.

Elsewhere, EURUSD edged out a 10-day high at 1.1088, before ebbing back under 1.1050. Cable printed an eleven-day high, at 1.2306. As for the coronavirus, the exponential rate of new cases has continued. Cases in the US have surged, and it might be several weeks before the fruits of the global lockdown is seen. Few are now expecting a V-shaped economic recovery out of this, such as was seen following the SARS epidemic in Asia in 2003. The key question is how wide the “U” will be in a U-shaped recovery? An old market adage has always been to, never try to catch a falling knife.

Always trade with strict risk management. Your capital is the single most important aspect of your trading business.

Please note that times displayed based on local time zone and are from time of writing this report.

Click HERE to access the full HotForex Economic calendar.

Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE!

Click HERE to READ more Market news.

Stuart Cowell
Head Market Analyst
HotForex

Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
HotForex is an award winning, fully regulated and licensed online forex and commodities broker. Offers various accounts, trading software and trading tools to trade Forex and Commodities for individuals, fund managers and institutional customers.
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