Weekly Trading Forecast: Trade War
US Dollar Biased Higher as Markets Navigate Trade War Worries
The US Dollar uptrend looks likely to emerge intact whether the combative stance adopted by Donald Trump in trade negotiations succeeds or backfires.
Yen Weakness Returns, but JPY Remains Vulnerable to Risk Aversion
The Japanese Yen came into this week with considerable strength as risk aversion ran rampant. But as the world stepped back from the ledge, so did the Yen.
GBP: Time for Sterling Bulls to Wake Up?
While GBP may still see some downside, these moves should be limited and traders may find better risk-reward set-ups from long Sterling positions.
Australian Dollar Could Gain Despite RBA If GDP Comes In Solid
The Australian Dollar has got two big local economic news points to chew over this week. The RBA is unlikely to do much for the bulls, but official GDP data might.
Canadian Dollar Vulnerable to Trade War Fears, Supported by BoC
The negative pressure trade war fears place on the Canadian Dollar amidst the US metal tariffs could be offset next week by the hawkish BoC and a local jobs report beat.
Gold Prices Remain Vulnerable as Bearish Trends Persist
Gold struggles to retain the rebound from the May-low, with bullion at risk for further losses as price & the RSI extend the bearish formations from earlier this year.
S&P 500, DAX & FTSE - Buyers Stepping In On Pullbacks, So Far
In the week ahead, there are risks to markets but they won't be from a light economic calendar; stocks tested as risk wilts, pullbacks or beginning of declines is the question.
Crude Falls On Boost In U.S. Production, Anticipated OPEC Supply
Crude oil is riding on the fence after positive US data showed that economic growth could keep demand high, but new supply is expected to limit gains.
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Weekly Trading Forecast: BoE and ECB on Tap
US Dollar: Trade Wars, Fed-Speak Line Up as Upside Catalysts
The US Dollar regained upward momentum last week, as expected. The currency emerged from a week loaded with high profile event risk with the strongest advance since late April. A hawkish monetary policy announcement from the Federal Reserve and a decidedly dovish one from the ECB did most of the work. The latter sank the EUR/USD exchange rate, which echoed as broader strength for the US unit.
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Australian Dollar Faces Calmer Week, But That May Not Save It
The Australian Dollar faces a lack of major, first-tier domestic economic data in the coming week and, given that last week's full calendar saw AUD/USD appreciably lower, it might be reasonable to assume that a sparser calendar might bring some reprieve.
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Yuan May Extend Losses Amid Weak Fundamentals, US-China Tariff Battles
This week, the USD/CNH broke above a long-term downtrend held since the mid of 2017, indicating a reversal in a longer time frame; the Yuan also lost against the EUR, JPY, GBP and CHF. Looking forward, the USD/CNH will likely continue the bullish trend (bearish for the Yuan); volatility in the pair is expected to elevate as the US and China have resumed tariff battles despite of rounds of negotiations.
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Gold Prices Take 2% Hit, Break Impasse with Fresh 2018 Lows
Gold prices are taking a hit as we move towards the close of this week, currently down -1.89% so far on the day and -2.35% from the high set just ahead of yesterday’s ECB rate decision. While Gold prices held support fairly well through the Fed’s rate hike on Wednesday, the ECB meeting the following morning produced considerable US Dollar strength as the ECB announced stimulus-taper in a very dovish manner.
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Oil Prices to Leak Lower as OPEC Look to Switch On Supply Taps
OPEC's 174th ordinary meeting is set to take place on June 22nd with the JMMC scheduled to meet the day before, while OPEC/non-OPEC ministers are due to meet on the 23rd. As we head to the meeting, expectations are for a relaxing of the current oil supply quota’s, which has been increasingly suggested by oil kingpins Saudi Arabia and Russia that the supply switch has been turned on.
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S&P 500, DAX & FTSE - Fed and ECB Over With, BoE Next
Last week, the Fed raised rates on Wednesday by the expected 25-bps and indicated another two rate hikes this year, also in line with expectations. Looking ahead to next week, there aren’t any ‘high’ impact data events on the calendar.
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Weekly Trading Forecast: Fed Testimony and China GDP
US Dollar Forecast - USD: Trade Wars vs Strong Economic Fundamentals - The Battle Continues
The US dollar should be powering ahead based purely on economic fundamentals but the over-arching threat of global trade wars is reining in the greenback's performance.
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British Pound Forecast - GBP: Strong UK Data may Boost GBP, However, Brexit Overhang Remains
The overhang of Brexit continues to provide an uncertain outlook for the Pound. However, strong UK data could potentially see GBP post marginal gains.
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Australian Dollar Forecast - Australian Dollar Could Be Stuck Between RBA Minutes, Jobs Data
The Australian Dollar's overall backdrop remains pretty bleak for bulls, but AUD/USD seems to have hit durable support and may have suffered enough for the moment.
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Canadian Dollar Forecast - CAD Undermined by US Auto Tariff Threat. Hawkish BoC, So What?
The Canadian Dollar was unable to capitalize on a hawkish BoC amidst trade war concerns. Ahead, the US might impose auto import tariffs and local CPI could miss, undermining CAD.
Japanese Yen Forecast - USD/JPY Forecast: Dollar Strength to Persist on Hawkish Fed Testimony
The Humphrey-Hawkins testimony may influence the near-term outlook for USD/JPY as Fed Chairman Jerome Powell is scheduled to appear before Congress.
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Oil Forecast - Crude Oil Sidesteps Trade War Fears, Inventory Drawdowns Continue
Crude oil has avoided the fate of other commodities that have been hit very hard by trade war fears. A massive drawdown in US crude stockpiles may help the argument of Bulls, but by how much remains unclear.
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Gold Forecast - Gold Prices Flirt with Disaster- Key Support in Focus Ahead of Powell
Gold is once again testing critical support ahead of next weeks Fed testimony- it's make-or-break here. These are the updated targets & invalidation levels that matter.
Equities Forecast - S&P 500, DAX & FTSE - Outlook Shrouded in Uncertainty
The week ahead doesn't hold much in the way of major market moving events on the calendar, but that doesn&rst mean there aren't risks out there; the general outlook is indecisive at the moment.
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Weekly Trading Forecast: US GDP with Trade Wars Exploding
US Dollar Forecast - US Dollar May Rise After Trump Meets Juncker, GDP Growth Soars
The US Dollar may return to the offensive as President Trump dials down trade war rhetoric while second-quarter GDP data puts US growth at a four-year high.
British Pound Forecast - GBP: Holiday Lull Ahead but Brexit May Break the Calm
The UK Parliament begins a six-week holiday mid-next week with rumors of a leadership challenge still doing the rounds. A lack of UK data next week will also leave Sterling vulnerable to any Brexit update.
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Australian Dollar Forecast - Australian Dollar Braces for CPI, US GDP, ECB and Trade Wars Next
The Australian Dollar braces for local inflation data, US GDP, an ECB rate decision and the threat of trade wars. Combining the risks creates for a rather bearish fundamental forecast.
Japanese Yen Forecast - USD/JPY Clings to Bullish Trend Ahead of U.S. 2Q GDP Report
Fresh data prints coming out of the U.S. economy may curb the recent selloff in USD/JPY as the growth rate is expected to expand 4.2% in the second-quarter of 2018.
Oil Forecast - Trump's Trade War Threats Combine with Saudi Supply to Weaken Bullish Argument
Calendar spreads in the oil market have softened lately with Brent showing the first front-month discount since September that hurts the broader bullish argument.
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Chinese Yuan Forecast - Yuan Eyes on PBOC's Guidance; Stocks Outlook Remains Cautious
China's top policymaker seems to have shifted tone on the Yuan to more weakness; at the same time, Chinese equities could still be vulnerable as the US threatened to impose additional tariffs.
Gold Forecast- Gold Prices Bounce From Fresh Yearly Lows After Trump Walks Back USD
Gold prices saw fresh yearly lows this week but will a turn in the USD offer some relief in the days ahead. These are the updated targets & invalidation levels that matter.
Equities Forecast - Nasdaq 100 Eyes New Record, DAX Seeks Improved EU-US Trade Relations
Nasdaq 100 staring at yet another record high with Amazon, Facebook and Alphabet reporting next week. DAX is seeking a boost from easing EU-US trade dispute.
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Weekly Trading Forecast: Yen Price May Rise, Stock Markets Lower, and more
Japanese Yen Forecast - Yen Price May Rise, Look Past BoJ, Eye Vulnerable Stock Markets
A lull in key event risk exposed stocks to bigger adverse fundamental themes as the Japanese Yen rose. It may keep going, looking past the BoJ as the S&P 500 still remains vulnerable.
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Australian Dollar Forecast - Australian Dollar Might Get Some Respite If Inflation Holds Up
The Australian Dollar remains very short of fundamental support but, with AUD/USD close to 2018 lows again, may not be hammered any harder this week
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Oil Forecast - Crude Oil Set For Third Weekly Decline Chasing Stock Markets Lower
Crude oil is working on its worst month since 2016 as risk sentiment soured significantly as October comes to a close and a mixed signal is coming from OPEC on potential production.
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Canadian Dollar Forecast - USD/CAD Rate Threatens Bearish Trend Ahead of U.S. NFP Report
USD/CAD rallies to fresh monthly highs even as the Bank of Canada (BoC) delivers a hawkish rate-hike, and topside targets remain on the radar as it threatens the bearish trend from June.
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US Dollar Forecast - US Dollar Aims Higher on Liquidity Appeal Amid Market Rout
The US Dollar looks likely to continue upward after hitting a 17-month high as its unrivaled liquidity continues to attract demand amid broad-based risk aversion.
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Slippage in Forex Explained
WHAT IS SLIPPAGE?
Slippage occurs when a trade order is filled at a price that is different to the requested price. This normally transpires during high periods of volatility as well as periods whereby orders cannot be matched at desired prices. Slippage in forex tends to be seen in a negative light, however this normal market occurrence can be a good thing for traders. When forex trading orders are sent out to be filled by a liquidity provider or bank, they are filled at the best available price whether the fill price is above or below the price requested.
EXAMPLES OF FOREX SLIPPAGE
OUTCOME #1 (NO SLIPPAGE)
The order is submitted, and the best available buy price being offered is 1.3650 (exactly what we requested), the order is then filled at 1.3650.
OUTCOME #2 (POSITIVE SLIPPAGE)
The order is submitted, and the best available buy price being offered suddenly changes to 1.3640 (10 pips below our requested price), the order is then filled at this better price of 1.3640.
OUTCOME #3 (NEGATIVE SLIPPAGE)
The order is submitted, and the best available buy price being offered suddenly changes to 1.3660 (10 pips above our requested price), the order is then filled at this price of 1.3660.
Anytime we are filled at a price different to the price requested on the deal ticket, it is called slippage.
WHAT CAUSES SLIPPAGE AND HOW CAN YOU AVOID IT?
So how does forex slippage occur, and why can’t our orders be filled at our requested price? It all goes back to the basics of what a true market consists of: buyers and sellers. For every buyer with a specific price and trade size, there must be an equal number of sellers at the same price and trade size. If there is ever an imbalance of buyers or sellers, this is what causes prices to move up or down.
WHICH CURRENCY PAIRS ARE THE LEAST PRONE TO SLIPPAGE?
Under normal market conditions, the more liquid currency pairs will be less prone to slippage like the EUR/USD and USD/JPY. Although, when markets are volatile, like before and during an important data release, even these liquid currency pairs can be prone to slippage. News and data events can increase volatility drastically.
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Will the Yuan Weaken Further?
“There are lots of things that can go wrong economically and politically within China in the 2020s”
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Will the Yuan weaken further? Coming up in our podcast this time:
This time on Trading Global Markets Decoded, it’s a China-focused theme as our host Martin Essex is joined by George Magnus,an associate at the China Centre at Oxford University, a research associate at the School of Oriental and African Studies, and a former chief economist of UBS. He has written extensively about China in the Financial Times, Prospect, and other economic and financial publications.
We ask: is China in jeopardy? Will the Yuan weaken further? And could trade wars have a global recessionary impact? You can listen to this podcast with George Magnus by clicking on the link above or one of the alternative platforms listed below.
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S&P 500, DAX 30 and FTSE 100 Forecasts for the Week Ahead
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Key technical breaks see the S&P 500 back to early March levels having pierced the 200DMA and 3000 level. This is despite the rising tensions between the US and China, particularly after China passed the Hong Kong Security Bill. Fears over the potential re-emergence of a trade war are likely misguided in the short-term, however, the rising uncertainty will likely see further upside capped.
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European Commission announce its recovery aid proposal, which propelled European assets higher with the DAX trading at its highest level since the beginning of March. However, with the “frugal four” already highlighting that the package should largely be in the form of loans, tough negotiations are ahead.
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EU-UK trade negotiations are at the forefront of investors’ minds. Although, given that both parties have shown little signals that they are willing to break away from its red-lines, the chance of a breakthrough appears minimal. Therefore, the absence of notable progress will in turn heighten no-deal Brexit risks and thus keep UK assets on the backfoot.
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Euro Forecast: the week ahead is looking positive for EUR
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Key indicators instilled a bullish outlook for EUR/USD ahead of the second half of the year as a ‘golden cross’ emerged towards the end of June, with the 50-Day SMA (1.1172) and 200-Day SMA (1.1058) still tracking a positive slope following the bullish signal.
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