It feels more like the start of a new year than the start of the second quarter.
The key focus will be on US data and how the bond market reacts.
Powell speaks tomorrow.
USDJPY remains in a 151-152 range, betterment bid in the upper half. I read that any intervention should it occur would target a 5 yen drop. I also read that the effects of intervention would be short-lived.
EURUSD stays soft but tight range, suggests a cautious approach awaiting key data from mid-week on
Economic calendar
TUE: RBA Minutes (Mar), CNB Minutes (Mar), South Korean CPI (Mar), EZ/UK Manufacturing PMI Final (Mar), German Prelim CPI (Mar), US Non-Durable Goods R (Feb), Chilean Central Bank Announcement
USD 4 HOUR CHART – INTERVENTION THREAT LOOMS BUT…
USDJPY remains within 151-152 with the market wary of pushing the top side too hard.
However, given the overall USD strength and the pop in bond yields, any intervention would likely prove short-lived unless it continues in a sustained way.
With that said, traders will be wary as they do not want to get caught in the first wave should there be intervention.
I think there’s two levels to be aware of wrt eur/usd forming a base. The first is nearby around 1.0725-1.0690….
The second is lower down around 1.0550.
Both would form a right shoulder for an inverted S-H-S if things are destined to play out that way.
Personally I think there’s enough divergence and other stuff going on that would say it doesn’t. But one never knows….
Against the grain high risk, testing short UsdChf here at 9050 and buy side of AudCad. Very light with very tight stops, not for the squeemish. If it sticks the R/R is very good. If not, it would be clear today sets the tone for the quarter with Usd strength. Proper trade is long Usd from Asia. If it doesn’t stick, the trade is long Usd until the cows come home.
Dow futures have drifted lower overnight but there is limited liquidity below current price. It is showing in Usd as it is holding, which is consistent. It is my experience it would require something significant for futures to move down further much, so the potential for futures to hold and Eur to catch a bid are present. Quite risky though, a Warren Buffet buy when they are selling trade if you have the courage. Prefer to see the open in stocks and the data on this Monday out of responsibility.
On deck:
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Release: Business Outlook Survey and Canadian Survey of Consumer Expectations – srce: BoC
10:30 (ET)
The Business Outlook Survey is a summary of interviews conducted by the Bank’s regional offices with business leaders from about 100 firms, selected in accordance with the composition of Canada’s gross domestic product. The Canadian Survey of Consumer Expectations is a quarterly survey aimed at measuring household views of inflation, the labour market and household finances, as well as topical issues of interest to the Bank of Canada.
A look at the day ahead in U.S. and global markets by Amanda Cooper.
Today marks the start of a new week, a new month, a new quarter and a new set of data to get investors going. Friday’s personal consumption expenditures price (PCE) index landed when most markets were closed, making this the first real chance to digest the numbers.
XAUUSD ONE-HOUR CHART – APRIL FOOLS DAY?
XAUUSD’s relentless rise is no joke as it continues to move into uncharted record-high territory. This makes looking for resistance pure guesswork so use the most recent high (2265) as the closest key level.
The two blue AT lines off the high raise a risk of a pause but only one that might be confirmed if XAUUSD moves below 2250.
On the downside, look for support as long as it trades above 2200-20, a stronger bid should 2250 becomes support.
Holiday almost everywhere in EU markets today. Here’s the monthly outlook from Alpha Picks for EUR/USD. Apologies if taking up too much space…
The ECB will be meeting on April 11th, and this should play out interestingly. Looking at the EURO on the 1 month time frame is where we will begin. We have observed massive demand for put buying relative to calls, and I do believe that this will continue to be the case into the ECB meeting as the market starts to anticipate a much more dovish ECB relative to the FED. This should start to put some downside on the EUR/USD. Hence, there is anticipation for this sideways chop in EUR/USD spot to start to fade, and for the EUR to move lower relative to USD. Implied vol on the one month has started to rise with a 40bps rise in implied vol now sitting at 5.40 vols.
Looking at the EUR/USD 1m Risk Reversal 25 delta, we are now witnessing rollover. Currently, we are seeing more buying of puts than calls. However, since COVID the overall level is relatively in line with where the options activity has been. Looking at the implied vol. this is also relatively low, and it does not appear that anything interesting is happening on the vol front with vol continuing to remain relatively suppressed.
Regarding the meeting for the ECB. I would expect the potential of witnessing the demand for puts to outstrip the demand for call buying, and potentially adding to some downside in the EUR/USD which over the last 3 months has been stuck in a range between 1.07-1.10.
Now observing the EURO, we witness something rather interesting happening with the term structure. We are only just starting to see widening until further out the maturity of the term structure. This implies that there is a macro risk that is being priced into the EURO, and thus traders are cautious about the outlook. This is driven by low expectations for growth, low productivity, and geopolitical issues within the Red Sea that seem more likely to hurt the EU compared to the US. Once again supporting the thesis that we should observe weakness in the EURO overall.
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What is Risk Management in Trading – Forex Forum
For any trader, managing risk is essential to success. But what exactly is risk management? In this blog post, we’ll explore what risk management is and how it can help you become a successful trader.
We’ll also look at some common mistakes that traders make when it comes to managing their risks. After all, if you’re not managing risk appropriately, you’re just a gambler. So if you’re ready to learn more about risk management, read on!
What is Risk Management in Trading?
Risk management is the process of assessing, controlling, and managing risk within a trading portfolio. This involves defining trading goals and understanding potential losses that could occur as part of the trading process.
It also includes identifying potential risks, such as market volatility or sudden changes in the market, understanding how these risks can affect your profits, and taking steps to limit potential losses.
In general, risk management should be a priority for all traders. By properly managing your risks and using effective strategies, you can minimize potential losses and increase the chances of making successful trades.
Common Mistakes When Managing Risk in Trading
Unfortunately, many traders make mistakes when it comes to managing their risks. Here are some of the most common mistakes that traders make when it comes to risk management:
Not Setting a Trading Plan:
Many traders don’t have a detailed trading plan, which is a key component of risk management. Without a trading plan, traders are more likely to take risks that could have otherwise been avoided. It’s important to establish clear trading goals and a plan for how to reach those goals.
Not Understanding Risk:
Many traders fail to understand the risks associated with certain trades, which can lead to serious losses if they don’t take the time to research and understand the risks involved. It’s important to have a thorough understanding of the markets you’re trading in before taking any risks.
Not Taking Advantage of Stop Losses:
Stop losses are an essential component of risk management, as they help to limit potential losses in the event of a market downturn or sudden changes in the market. However, many traders don’t take advantage of stop losses and end up taking larger risks than necessary.
Over-Trading:
Over-trading is a common mistake made by many traders. This involves taking too many trades, which can lead to losses if the market turns against you. Look, all traders love the price action. It’s exciting to take a position and watch your P/L go up and down. But don’t become addicted to the price action for the sake of just having a position. It’s important to only take trades when the setup is right and avoid over trading.
Not Diversifying Risk:
Diversification is another important part of risk management. By diversifying your trades, you can spread out risk and limit potential losses if the market turns against you.
Why is Risk Management Important in Trading?
Risk management is a critical factor in success when trading in the markets. It involves understanding and controlling what could potentially impact your trades and actively analyzing scenarios that may occur.
Without proper risk management, traders are leaving themselves vulnerable to potential losses which could be catastrophic for their investments.
Good risk management also allows traders to effectively assess opportunities and make better decisions that take into account volatility or leading indicators of future market performance.
Simply put, risk management can provide peace of mind so traders can enjoy the highs of profitable investments while minimizing losses when markets start to dip.
What are Some Common Risk Management Strategies?
Common risk management strategies used by traders include setting stop-loss orders, limiting capital exposure, and diversifying investments to minimize volatility.
Another essential approach for traders is to set predetermined targets for both profits and losses to help stabilize your exposure. To further limit potential losses and maximize gains, traders should always be aware of economic news and other world events that might affect the market.
How to Implement Risk Management in your Trading Plan
Implementing effective risk management into your trading plan is incredibly important for successful and profitable trading. It can help you to control the amount of draws you take in any given trade, and it can also protect against large losses which could potentially wipe out your entire trading account.
A good risk management plan should include determining the amount of capital at risk on each trade, setting predetermined stop-losses to limit downside exposure, and having a strict, disciplined approach towards minimizing losses:
never increasing position size
never risking more than you are comfortable with, and always controlling potential risk-reward ratios.
Taking the time to set up a comprehensive yet flexible risk management plan will put you in a better position when it comes to positive returns in the long run.
Risk management is an important part of trading. It allows you to trade with less stress and more confidence. There are many different risk management strategies, so it is important to find one that fits your trading style.
Proper risk management can help you make money in the long run by preserving your capital and preventing you from making careless mistakes.
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