Global Markets Struggle to Stay Firm On Risk Aversion - Forex Anatomy

Global Markets Struggle to Stay Firm On Risk Aversion

The first few trading days of 2020 have provoked financial markets to march to the beat of war drums, as last week’s US drone strike & assassination of Iranian General Qasem Soleimani is causing risk-oriented assets to sell-off in a round of risk aversion.

As geo-political tensions intensify between the US & Iran, safe haven instruments have become the preferred asset to rotate capital into, which is causing US Treasury bond yields to struggle for most of the trading session. This softening in bond yields has resulted in a weaker greenback for today, which is divergent from how the dollar typically responds during times of risk aversion, considering that the currency is a high yielding safe haven. With global equities selling off, we are witnessing most dollar-denominated currency pairs, except for AUD/USD, remain fairly bid & positive for the day.

During today’s trading webinar, we reviewed the fundamental landscape and also covered a common mistake most beginner traders make in their trade execution.  To be a disciplined trader, you must develop a process to cope with emotional triggers that lead to over-trading or over-leveraging on positions due to fear of missing out (FOMO), or failure to accept trading losses when they come. If you’re unable to manage your emotional and mental constitution during trading, then you will limit yourself from profiting as an active trader.

For most of the webinar, we reviewed price action in EUR/USD, USD/JPY, DXY (US Dollar Index), AUD/USD, and NZD/CHF to identify technical setups that were forming in the market for trade entry.

 


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About the Author Marvin Perry

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.

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