For the first forex trading webinar of the week, we continued to see a handover in dollar-positive sentiment, with most dollar-denominated assets sliding lower on a combination of geo-political concerns from the Eurozone & Great Britain, as well as safe haven flows into the greenback.
The currency market opened for the week, with pairs like the EUR/USD & GBP/USD, tumbling into fresh lows, during a thin liquidity environment. Since banks are celebrating the US Veteran’s Day, and Canada’s Remembrance Day, there was lower-than-usual liquidity during the US Trading Session, which could give way to tricky price signals, and exaggerated moves that could mislead traders into inappropriate trades. In addition to this, the triggering of stop-loss orders on the slide lower could have also exacerbated the sell-off in both pairs, while increasing market volatility. But, despite the reasoning for today’s price movement, the US Dollar is still gaining ground across the board, with high expectations of a rate hike in December, which is influencing investor’s sentiment into the year’s end.
On another note, negotiations between Britain and the European Union have not produced a viable solution on issues surrounding the Irish border. Over the weekend, rumors were circulating that 4 Pro-Europe UK ministers of parliament were contemplating resignation, which if true, would definitively place Prime Minister May’s Brexit plan at a halt. Moreover, talks within the British government are, unfortunately, in a state of turmoil & disarray, since most members were in disagreement with the plan since the very start of negotiations. The members of May’s cabinet who support a hard Brexit are denying & dismissing any compromise that PM Theresa May has offered to parliament. In a nutshell, there are increasing chances that a Brexit “No deal” vote will be the one that passes the UK parliament, irrespective of the European Union’s stance on the Brexit deal. This gridlock in discussions and inability to establish a resolution on the Irish borders will continue to weigh on the sterling, with GBP (pound) crosses pressured to the downside.
During today’s webinar, we discussed the ATR indicator, and how to use this technical tool to measure intra-day volatility, as well as any financial instrument’s average trading range for the day. The information gathered from the ATR (average true range) can be used to determine when an asset has reached a point of directional exhaustion, near the limits of its average daily range, and how to trade the intra-day correction or counter-trend.
For most of the webinar, we reviewed price action in EUR/USD, GBP/JPY, USD/JPY, and AUD/CAD to identify technical setups that were forming in the market for trade entry. We executed a buy order in EUR/USD at 1.1267, with Stop Loss- 1.1258 and Take Profit – 1.1279 as a scalping opportunity, but the stop was triggered a few minutes after the end of the webinar.
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Marvin Perry has been an active trader within the Forex market since 2010. He attended the University of Illinois in Urbana/Champaign, and graduated in 2002 with a double major in Cell and Structural Biology and Chemistry. He currently serves as an FX instructor & Quantitative Analyst for the Forex Anatomy Private Trading Community called "The Lab", where he conducts live weekly trading webinars & instruction on Fundamental Analysis & Inter-Market Interpretations of dynamic asset classes and their influence on currencies.