As the summer nears an end, activity in the markets is expected to rise. Not only are traders returning from vacations, but the busy calendar suggests even more action than usual.
What can traders do to get ready for this change? Here are three things.
The debt crisis in Europe returns, with big hopes but also fears. Details about the ECB’s big bond buying program are highly anticipated as well as the ruling of the German constitutional court regarding the legality of the ESM bailout mechanism. All this relates to the situation in Spain. In addition, the troika delegation is returning to Greece to see if Greece made progress. Add high expectations towards the Fed decision and many other events, and you have an explosive mix.
So, here is what you can do:
What can traders do to get ready for this change? Here are three things.
The debt crisis in Europe returns, with big hopes but also fears. Details about the ECB’s big bond buying program are highly anticipated as well as the ruling of the German constitutional court regarding the legality of the ESM bailout mechanism. All this relates to the situation in Spain. In addition, the troika delegation is returning to Greece to see if Greece made progress. Add high expectations towards the Fed decision and many other events, and you have an explosive mix.
So, here is what you can do:
- Stay up to date: The aforementioned events are the biggest ones. There are many more events scheduled and news breaks out unexpectedly. Stay tuned with what’s going on – the news could be dramatic to trigger big moves, and it’s important to know why and if the moves are expected to be sustained.
- Consider trading crosses: Often, the risk events cause excessive volatility that makes trading quite choppy. If you want to skip the action caused by some US indicators and focus on longer term moves on other currencies, try trading your specific currency against currencies other than the greenback.
- Lower your leverage: The mix of high volatility and high leverage can be lethal to your trading account. Big moves in the right direction are excellent, but even if you got the big move correctly, a sudden swing to the wrong direction may be quite painful, as it may swing away a big chunk of your account. Higher volatility provides more opportunities but more risk. So, lower your leverage and consider smaller positions.
Editors’ Picks
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
GBP/USD struggles to hold above 1.2450 in choppy session
The Pound Sterling is experiencing slight losses against the US Dollar, largely due to the influence of high US Treasury yields that are bolstering the Greenback. This trend was fueled by the release of economic data, which showed that Durable Goods exceeded expectations, leading to a surge in US yields and a favorable environment for the USD.
USD/JPY refreshes 34-year high, attacks 155.00 as intervention risks loom
USD/JPY is renewing a multi-decade high, closing in on 155.00. Traders turn cautious on heightened risks of Japan's FX intervention. Broad US Dollar rebound aids the upside in the major. US Durable Goods data are next on tap.
Editors’ Picks
AUD/USD failed just ahead of the 200-day SMA
Finally, AUD/USD managed to break above the 0.6500 barrier on Wednesday, extending the weekly recovery, although its advance faltered just ahead of the 0.6530 region, where the key 200-day SMA sits.
EUR/USD met some decent resistance above 1.0700
EUR/USD remained unable to gather extra upside traction and surpass the 1.0700 hurdle in a convincing fashion on Wednesday, instead giving away part of the weekly gains against the backdrop of a decent bounce in the Dollar.
Gold keeps consolidating ahead of US first-tier figures
Gold finds it difficult to stage a rebound midweek following Monday's sharp decline but manages to hold above $2,300. The benchmark 10-year US Treasury bond yield stays in the green above 4.6% after US data, not allowing the pair to turn north.
Bitcoin price could be primed for correction as bearish activity grows near $66K area
Bitcoin (BTC) price managed to maintain a northbound trajectory after the April 20 halving, despite bold assertions by analysts that the event would be a “sell the news” situation. However, after four days of strength, the tables could be turning as a dark cloud now hovers above BTC price.
Bank of Japan's predicament: The BOJ is trapped
In this special edition of TradeGATEHub Live Trading, we're joined by guest speaker Tavi @TaviCosta, who shares his insights on the Bank of Japan's current predicament, stating, 'The BOJ is Trapped.'
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