EUR/USD Update: Another Chance For Rally

Aibek Burabayev - INO.com Contributor - Metals - EUR/USD


Last month I shared with you a trade setup for a single currency against the Fiat King. There were two charts posted: one was showing the global map and the other one was dedicated to the short-term trade setup.

You could have booked around 1.9% or more than 200 pips by the end of the March of my earlier trade idea, where I recommended buying the euro on the dips below 1.23. The ultimate target was set according to the Fibonacci ratio projections between the $1.2647 and the $1.3139 per 1 Euro. The risk was limited below the $1.2150, and it was not materialized since then.

Indeed, the Euro dipped below $1.23 down to the $1.2240 area as planned. But on the move to the upside, it only advanced as high as $1.2477 on the 27th of March still gaining more than you could have risked. The EUR/USD couldn’t overcome the earlier top beyond $1.2556, and it retreated after that.

In this post, I updated the EUR/USD chart for you as the short-term chart structure has changed and it offers another trading opportunity. Continue reading "EUR/USD Update: Another Chance For Rally"

Don't Miss Another EUR/USD Rally

Aibek Burabayev - INO.com Contributor - Metals - EUR/USD


I spotted a promising trading opportunity in the Foreign Exchange market, and I would like to share it with you today as the setup is ready.

Before that, I would like to give you some insight about the global map for the pair of the single currency against the king currency (EUR/USD) to let you know where other opportunities could emerge as time goes by.

Chart 1. EUR/USD Monthly: Make It Or Break It

EUR/USD
Chart courtesy of tradingview.com

On the chart above, we can see the magic power of trends highlighted in blue for the upmove and in red for the current long-lasting correction. The former already took 115 months to unfold exceeding the period of the preceding upmove (93 months) significantly. This is what we always should bear in mind about the nature of corrections – they last longer than the moves they retrace. Continue reading "Don't Miss Another EUR/USD Rally"

Will Brazil Turn A Corner In 2017?

Lior Alkalay - INO.com Contributor


In Brazil, the year 2016 will no doubt go down in the history books as one of the worst the country has experienced. The Brazilian president, Dilma Rousseff, was impeached for the role they played in a bribery scandal and for illegally disguising the country’s real debt. Moreover, the Brazilian economy had its worst recession in more than half a century.

And yet, there are some encouraging signs that, at least as far as the economy and the Brazilian Real are concerned, the country might have turned a corner.

Brazilian Bonds Revival

In the months of January and February, when the political climate turned more and more chaotic and Brazilian growth tumbled, yields on Brazilian 10-year bonds were as high as 16.78% and CDS prices, which measure the likelihood of a sovereign debt default, jumped to 7%. One would then expect that, from this point onwards, and especially in recent months with the prospect of a Fed’s tightening weighing on bond markets across the globe, the already fragile Brazilian government bonds would experience an utter meltdown, even to the extent of risking an actual default. But what happened instead was interesting. While bonds across the world were tanking and yields surging (bond yields move in reverse, relative to prices) amid the Fed’s tightening, Brazilian bonds staged an impressive rally, and yields on 10-year bonds fell from their highs back in January to as low as 11.4% today. Unsurprisingly, this was followed by an impressive rebound for the Brazilian Real. Continue reading "Will Brazil Turn A Corner In 2017?"

China 2017: More Boom Before the Bust

Lior Alkalay - INO.com Contributor - Forex


Despite the Yuan’s value recently plummeting to an eight-year low, the Chinese economy has been rather stable in the second half of 2016, manufacturing PMI held above 50 (above 50 signals expansion); exports reached $196.8 Bln in November(from $176.2 Bln in January); and in industrial production growth averaged 6.14% Year over Year.

Together, these changes all represent a strong indicator of growth - and of bounce-back - and all thanks to the Yuan. Or more accurately, to the Yuan meltdown. Even as the Chinese Yuan shed more than 7.1% this year, it allowed China’s exports to rebound and stabilize industrial and manufacturing production. But all that stability comes at a stiff price, down the line.

While a weaker Yuan helps exporting sectors, it causes problems in China’s domestic economy. In it, an exceptionally weak currency has the same impact as monetary easing, creating an inverse relationship where, when the Yuan’s value is eroded, China’s housing bubble swells.

The more China’s housing bubble swells, the more its debt problem becomes acute. And, ultimately, the more painful its bust will be. Continue reading "China 2017: More Boom Before the Bust"

How The OPEC Deal Impacts The FX Arena

Lior Alkalay - INO.com Contributor - Forex


The much-anticipated OPEC deal to cut oil production has finally been reached. Brent and WTI Oil futures were not too late to react and jumped more than 7% with Brent Oil futures surpassing the $50 mark. And if momentum continues we could very well be looking at $60, perhaps rather soon. If that is the case, this can change the picture, not only for Oil futures and Oil companies but for currencies of Oil exporting countries, many of which were hit hard when Oil prices took a nose dive and could benefit now that oil prices are taking off.

The question is how exactly would an Oil rally play in petro-currencies in the current macro environment? Is it a good opportunity to buy into the battered Ruble? Or maybe a Norwegian Krona rally against the Euro? The options are numerous, but once we delve into the economic dynamics of each currency, the options narrow fast. Continue reading "How The OPEC Deal Impacts The FX Arena"