The difference between success and failure in a forex trading largely depends on the currency pairs you choose to trade on each week and in what direction, and not on the exact trading strategies you can use to determine trading inputs and outputs.
At the beginning of the trading week, it is a good idea to look at the big picture of what is happening in the market as a whole and how such developments and macro foundation and market sentiment are affecting them.
The world is in the throes of a major geopolitical crisis which is causing strong momentum in the commodity and forex markets, so it is an exciting time to trade the market.
Large image 6We March 2022
In my post last week, I wrote that the best trades of the week could be longer than the USD / JPY pair pair after closing daily (New York) above 116.13. This was never set up so there was no business last week.
Today’s news is that Russia’s invasion of Ukraine is now in its eleventh day. The invasion, the war, and the resulting political and economic crisis have two obvious and strong implications for financial markets. In terms of almost all major currencies.
Clearly, Ukraine’s defense has been far more effective than expected from the Russian leadership or anyone elseAnd Russia’s losses may already be close to 10,000 dead – nearly two-thirds of the Soviet Union’s total losses in the 10-year war in Afghanistan in the 1980s.
NATO, the European Union (EU) and its allies have stated opposition to using force or imposing sanctions on Iran.But they are sending sophisticated weapons and volunteer troops, which seems to be slowing down Russia’s progress.
Strong sanctions have been imposed on Russia and the Russian economy in the economic fieldMany companies are leaving Russia or there they will stop operations and sales, many Russian banks have been cut off from SWIFT. Russian assets abroad are also being seized and frozen. This can lead to severe economic hardship in a country where many people find it very difficult to get a paycheck. However, Russia’s oil exports appear to be in line with Western sanctions, although Western rulers are refraining from buying Russian oil under any circumstances.
We see significant disruptions in exports to Russia and Ukraine. These countries supply large quantities of food products such as wheat and cornAs well as other agricultural products such as fertilizer. This category of agricultural products has seen a dramatic increase in prices over the past few days; It is difficult to see how inflation will slow down if the conflict does not end quickly.
Last week, internationally confirmed new coronavirus cases fell again for six consecutive weeks. An estimated 63.2% of the world’s population now has at least one vaccine.
Currently, the strongest growth in newly confirmed coronavirus cases is taking place in Brunei, China, South Korea, Liechtenstein, Malaysia, New Zealand, Singapore, Thailand, Tonga and Vietnam.
Basic analysis and market sentiment
Over the past few years, the market situation has been one of high risk.In one case, stocks, commodities, and currencies grew, and in other cases, the US dollar, the Japanese yen, and the Swiss franc. This has increased in the current area, where stocks are rising, commodity prices are rising, and the euro is showing relative strength against the US dollar and Japan. The parable has become obscure, and everything is shocking in the wake of the Russian invasion of Ukraine. Next week in the market is likely to be dominated by developments in this area and ongoing high volatility. In addition, there are some economic data that will be released this week as needed:
- US CPI (Inflation) Information
- European Central Bank Central Reform and Monetary Policy Statement
- Canadian Employment Change and Unemployment Rate
- American pre-UoM consumer sentiment
US Dollar Index
Below shows the weekly price chart US Dollar Index recently published:Pin candle He was also closeDodge Last week, the price continued to merge between the 12174 support level and the 12293 resistance level.. Prices are clearly rising but the long-term bullying trend is still strong, the price is higher than it was 6 months ago and slightly higher than it was 3 months ago, which means the bullying trend is nearing its end. We also see in 12257 the new level of protection as a new support, which is a sign of weak bullying. If this and the support level in 12174 continues to be maintained, the long-term bullying trend may accelerate.
Overall, it seems clear that we still have a bright picture in the USD On long and medium termsBut in the Forex market The green back does not seem to be the main driver of the price now. It may be the best time to trade currencies without the use of dollars or commodities.
Euro / dollar
Russia’s invasion of Ukraine shocked Europe. The euro has long been in a bearish trend But the threat of war, including NATO, in Europe, despite its thinness, has clearly had an impact on the euro. Russia’s sanctions have also had a devastating effect. The weakness of the euro is a major feature of the Forex market today.
The fluctuations in this currency pair from Friday to Friday are the biggest in months.Prices at the new 18-month low over the weekend, to the blue sky.
The value of this currency pair is likely to fall again next week.
USD / RUB
The Russian ruble lost about half of its value against the US dollar and other currencies last week. However, it is practically impossible to trade rubles It is not easy to change now, and there are no forex brokers available.
It should be noted that it is a currency that loses half its value in a week On the verge of falling.
WTI crude oil
Last week, WTI crude oil prices rose sharply, following the geopolitical shock of the Russian invasion and Russia’s export of crude oil.And many countries are afraid to buy it if it is sanctioned.
The price seems to be risingHas already reached a new 13-year high with a very strong pace, But it is well known that the weekly closing was below The $ 115 resistance level I identified a few days ago.
Probably a factor as to why they’re doing so poorly.
Ukraine and Russia export more than $ 11 billion a year, which is a major part of the global wheat market.
Last week, wheat prices rose 40 percent more than any other major commodity.
Investors and estimates are the major beneficiaries of the Tertium Wheat Fund and are buying wheat futures.
Buying wheat is a risky business because of its volatility, and the good news for the market is that it could see a sharp fall in prices. However, there are fears that the recent planting of Ukrainian wheat could lead to a sharp decline in production next year, which is another reason why prices have soared.
If the war continues, wheat prices will remain high. It should be noted, however, that prices have fallen sharply since Friday.
Ukraine exports about $ 5 billion a year.Large share of the global wheat market.
Maize prices rose 20 percent last week.
Investors and estimates have been buying corn for the foreseeable future, a major beneficiary of the Teucrium Wheat Fund.
Buying corn is a risky business because of its high volatility, but if the war continues, the price of corn will remain high. It is already striving to reach unprecedented levels.
Last week, the rare metal palladium has been on the rise since the 2020 Coronavirus shock. The price is highly closed, very close to last year’s conversion point, which could serve as a counter. However, the labor force is very strong, rising by about 20% last week, which means there may be further inflation in the coming days.
There is growing concern that Russia’s geopolitical expedition could significantly disrupt the supply of palladium.
Gold prices rose sharply last week.But it is much smaller than the other products mentioned earlier. This is usually due to an increase in risk-takingAlthough the nature of the accident is less relevant in its usual terms. With Both Fiat currencies and cryptocurrencies show their structural weaknessesGold now looks very attractive.
Technically, last week’s increase is just as high as it is, which is lower than last week’s low. This strong motivation suggests that there may be further increases in the coming days, and it is unlikely that even the biggest test of $ 2,075 in 2020 will be seen.
This week I see the best opportunities in the financial markets being the USD pair and the WTI crude oil, gold, wheat and corn short. The volatility of these products can be so great that businesses need to be carefully weighed. Subsequent stops, and not a timed exit, should be used.