News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site. See our updated Privacy Policy here.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
Oil - US Crude
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
More View more
Real Time News
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here: https://t.co/arxYmtQeUn https://t.co/rFlQtyQS81
  • Canadian Dollar snapped a three-week losing streak after USD/CAD stalled at key technical resistance. Get your CAD weekly forecast from @MBForex here: https://t.co/BPHuKecwnz https://t.co/73OmuCKfU9
  • Forex quotes reflect the price of different currencies at any point in time. Since a trader’s profit or loss is determined by movements in price, it is essential to develop a sound understanding of how to read currency pairs. Learn how to read quotes here: https://t.co/CNtqrKWDBY https://t.co/KzhQnGiLyt
  • A currency carry trade involves borrowing a low-yielding currency in order to buy a higher yielding currency in an attempt to profit from the interest rate differential. Find out if the carry trade suits your trading style here: https://t.co/7t4BzmLg8w https://t.co/cuneuJNZlH
  • Get your snapshot update of the of top level exchanges and key index performance from around the globe here: https://t.co/d8Re5anlG5 https://t.co/danCiP5vqK
  • Traders utilize varying time frames to speculate in the forex market. The two most common are long- and short-term-time frames which transmits through to trend and trigger charts. Learn more about time-frame analysis here: https://t.co/9S5tXIs3SX https://t.co/JhYoQ7I19K
  • The Nasdaq 100 index is aiming to breach a key resistance level at 14,950 for a second time. A successful attempt may open the door to further gains, although the MACD indicator flags signs of weakness. Get your equities forecast from @margaretyjy here: https://t.co/BEYupi32qB https://t.co/PWeXE8tZVY
  • Currency exchange rates are impacted by several factors. Are different world leaders a contributing factor? Find out here: https://t.co/4jsORznRTE https://t.co/t34kotPE8R
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here: https://t.co/BdgFmkRxVw https://t.co/lM1OIJdjhr
  • Trading Forex is not a shortcut to instant wealth, excessive leverage can magnify losses, and sentiment is a powerful indicator. Learn about these principles in depth here: https://t.co/lZFM8youtX https://t.co/6qGEVjDlN6
Market Context for Setups Like GBP/USD and US Oil

Market Context for Setups Like GBP/USD and US Oil

John Kicklighter, Chief Strategist

There seems to be a material lack of confidence which plagues opportunities across various markets. Can setups in crude oil and GBP/USD overcome the lack of conviction amidst illiquidity and low volatility?

Talking Points:

  • I believe there is a third analysis technique in addition to technicals and fundamentals - market conditions
  • Market conditions evaluates systemic considerations behind a market or financial system: liquidity, regulation, asset maturity
  • If we start our analysis through an assessment of conditions, the pictures of US oil and GBP/USD can materially change

What makes for a 'great' trader? Strategy is important but there are many ways we can analyze to good trades. The most important limitations and advances are found in our own psychology. Download the DailyFX Building Confidence in Trading and Traits of Successful Traders guides to learn how to set your course from the beginning.

Breakouts set against the backdrop of fading liquidity are not good trades. And yet, a fixation on technical analysis alone encourages many traders to pursue such developments despite the conditions stacked against them. Fundamental traders are not immune to tunnel vision either. Focus on a particularly important theme or the presence of a key event risk can raise traders' confidence that a productive market development is at hand even when there is no market to convert those lofty beliefs into tangible momentum. I am a strong believer in a third type of analysis in 'market conditions'. In generally, its focus is on factors that lead to systemic changes in the underlying financial structure: liquidity, regulation, cross-asset correlations, the emergence or deterioration of assets, etc. For those that do account for these big picture factors, it is too often grouped into one of the two traditional analysis techniques and in turn its importance minimized relative to a breakout or monetary policy shift. Yet, there is material value in setting this out as its own analysis filter and starting our evaluation of opportunities with it in mind.

One of the most prominent features of an analysis into market conditions presently is conviction. There are a number of dramatic breakouts and high-profile trends across various markets, but there is a material lack of confidence that these developments will offer productive opportunities. While this unease can be assessed in subsequent levels of technical analysis and lack of pace via technical analysis or explanations of a waning theme through the likes of monetary policy speculation, the better assessment is through the conditions underlying the markets themselves. We have seen through the past months and years a steady and material reduction in participation that has come hand in hand with volatility. That is a systemic change brought on by among other things the massive amount of monetary policy across the globe. Yet, with this reality in mind, our understanding of any pace from global equities, breakouts on markets like emerging markets and so much more can take on a very different outlook.

With a backdrop of structural illiquidity and low volatility combined with the seasonal drain typical in the Thanksgiving holiday period, I look at two dramatically different technical and fundamental pictures. First is US oil. This commodity has thrown off its conviction in the supply-demand debate and references to OPEC headlines, but it has seen another provocative break to close this past session. The commodity cleared $58 just before the holiday drain, and speculators are no doubt hungry for some emergent trend. Yet, how much follow through can we expect without a reliable fundamental wind to affix to and the knowledge that markets will be extremely thin. Are these the conditions that can override the hesitation that has plagued us for months and years? Alternatively, we have GBP/USD. A budget and FOMC response pushed it to a seventh consecutive advance; but the entirity of the move fits neatly into a restrictive range. This pair and all Sterling crosses have been sidelined consistently due to Brexit uncertainties. Yet, perhaps that less appealing range in normal trading circumstances is much more appropriate given our conditions. We discuss a higher top down approach starting with market conditions in today's Quick Take Video.

To receive John’s analysis directly via email, please SIGN UP HERE.

Market Context for Setups Like GBP/USD and US OilMarket Context for Setups Like GBP/USD and US OilMarket Context for Setups Like GBP/USD and US Oil

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES