August inflation data from the US could fuel the next directional move in the precious metal. UNH stock fell on Wednesday, Thursday falling reduced odds of Trump victory. Over the summer, the focus of the Fed has shifted from a singular emphasis on curbing inflation to now discussing the risk of causing significant damage to the labour market. Although these may not have as big an impact as the other news, it’s still worth paying attention to them. The United States still has the largest economy in the world and the U.S. dollar is the world’s reserve currency. Even if its position has been eroded by setbacks, imbalances, and weaknesses, the strength and influence of the US dollar will not be matched anytime soon.
Trading News With Exotic Options
Generally, since the U.S. dollar is on the “other side” of 88% of all currency trades, U.S. economic releases tend to have the hitbtc crypto exchange review greatest impact on forex markets. The relative importance of these releases is generally dependent on the broader economic environment. In the post-pandemic years, traders have been paying close attention to inflation and interest rate decisions. Prior to the COVID-19 pandemic, the markets appeared more focused on GDP growth and employment figures. It is important for traders to understand the current economic backdrop.
When the markets are hotly debating the Fed’s next policy moves, U.S. labor market updates are guaranteed to make market players jittery. European Central Bank (ECB) policymakers announced their unanimous decision to lower their main deposit rate by 0.25% as expected, following its previous cut in June. The US Dollar (USD) faded the bullish performance witnessed in the previous week and resumed its downward path these past few days. Since spreads widen when news reports come out, it makes sense to stick with those pairs that have the tightest spreads, to begin with. The number of events scheduled can reach over a hundred on any given week! After staying under modest bearish pressure in the first half of the week, Gold (XAU/USD) benefited from falling US Treasury bond yields and reclaimed $2,500.
Major US stock indices are trading mixed ahead of the open
Bitcoin price retested and bounced off from the daily support level of $56,000 this week. US spot Bitcoin ETFs posted $140.7 million in inflows until Thursday and on-chain data supports a bullish outlook. Bitcoin trades above $58,000 at the time of writing, adding 2% to its value this week. Ethereum hovers around $2,300 as WazirX exchange exploiter moves 5,000 Ether to a new wallet address and a crypto mixer.
Data from crypto intelligence tracker shows that wallets of Bitcoin and Ethereum miners noted a decline in their holdings of the assets in the first half of the year.
Liquid currency pairs give us reassurance that our orders will be executed smoothly and without any “hiccups”. Being aware of upcoming key event risks can help avoid being on the wrong side of the market. We introduce people to the world of trading currencies, both fiat and crypto, through our non-drowsy educational content and tools.
The 10-year US Treasury bond yield stays in the red below 3.7% as markets reassess the odds of a large Fed rate cut, helping XAU/USD push higher. Brace yourselves for another exciting trading week, forex fellas! We’ve got no less than top-tier U.S. inflation reports and a central bank decision, plus U.K. The major assets were all over the place as traders priced in their Fed rate cut biases, U.S. political updates, and top-tier U.K. Remember that we are trading the news because of its ability to increase volatility in the short term, so naturally, we would like to only trade news that has the best market-moving potential for the currency market.
- Liquid currency pairs give us reassurance that our orders will be executed smoothly and without any “hiccups”.
- A hotter-than-expected core inflation reading sent the U.S. dollar higher, but risk appetite soon took over and limited the Greenback’s gains.
- As long as the barrier level is breached—even if the price reverses course later—the payout is made.
This week proved to be rough for risk assets as market players had to price in top tier less optimistic news & data, most notably jobs updates from the U.S. There are times when sentiment in the equity markets will be the precursor to major moves in the currency market. Before developing a ‘Trade the News” strategy, we have to look at which news events are even worth trading. Pullbacks from last week’s moves and positioning ahead of this week’s catalysts got traders pushing the major assets all over the charts. With not a lot of fresh catalysts to consider, the markets are positioning themselves ahead of anticipated data releases on Wednesday and Thursday.
Over the next day, the U.S. dollar gave back the prior gains and then lost additional ground to its European counterpart. The Bank of Canada (BoC) cut its overnight rate by 25 bps to 4.25% today, marking the second consecutive rate cut in its monetary policy tightening cycle. August U.S. jobs data showed signs of cooling but remained net positive, potentially paving the way for a measured Fed rate cut in September. A hotter-than-expected core inflation reading sent the U.S. dollar higher, but risk appetite soon took over and limited the Greenback’s gains. Gold price is sitting at the highest level on record near $2,570, with buyers contemplating the next move amid sustained weakness in the US Dollar and the US Treasury bond yields.
Ultimate Traders: Riding the Prop Trading Wave
Traders now look forward to the US Michigan preliminary Consumer Sentiment data for fresh directives. For example, by selecting only “HIGH“, the Economic Calendar will only display the events that have historically been known to produce market volatility. News traders need to be mindful not only of the potential significance of a particular beat or miss but also of the broader economic environment and market trends.
This option is great for news traders who think that the economic release will not cause a pronounced breakout in the currency pair and bet that it will continue to range trade. Either one of the levels must be breached prior to expiration for the option to become profitable and for the buyer to receive the payout. If neither barrier level is breached prior to expiration, the option expires worthless.
A double one-touch option is a good option for news releases because it is non-directional. As long as the barrier level is breached—even if the price reverses course later—the payout is made. Trading global news events is another widely followed form of trading; the economic impact on foreign and domestic markets can vary greatly depending on the country providing the information. The currency market is prone to short-term movements brought upon by economic data releases both in the U.S. and around the globe. By doing research, staying on top of important news, and properly managing risks, traders will have a firm foundation on which to benefit from news-driven trading.
One of the great advantages of trading currencies is that the forex market is open 24 hours a day, five days a week (from 5 p.m. Sunday until 4 p.m. Friday ET), and only the best forex brokers can help you navigate the market. Since markets move because of news, economic data is often the most important catalyst for short-term movements. This is particularly true in the currency market, which responds not only to U.S. economic numbers but also to news from around the world. Here, we look at which economic numbers are released and when, which data is most relevant to forex traders, and how traders can act on this market-moving information. A double no-touch option is the exact opposite of a double one-touch option. There are two barrier levels, but in this case, neither barrier level can be breached before expiration—otherwise, the option payout is not made.
ECONOMIC INDICATOR
Depending on what’s currently happening in the world, the relative importance of this event may change. The study found that the effect on returns generally occurs in the first or second day, but the impact does xm broker review seem to linger until the fourth day. The impact on the flow of buy and sell orders, on the other hand, is still very pronounced on the third day and is observable on the fourth day. Crypto mining is the process by which new Bitcoin and Ethereum enter circulation.
Forex traders should familiarize themselves with the key event risks that heavily impact the major currencies. A one-touch option only has one barrier level, which generally makes it slightly less expensive than a double one-touch option. The same criterion holds—the payout is only made if the barrier is breached prior to expiration. This is a good option to buy if you have a view on whether the number will be stronger or weaker than the market’s consensus forecast. The BabyPips.com Economic Calendar highlights the important events and economic data that are being released by the countries with the most popularly traded currencies. Gold preserves its bullish momentum and trades near $2,580 after setting a new record-high slightly above this level.