FX Fundamental Breakdown – 15 Mar 2021

USD

It was steady for the USD in the past week, with not much change in economic data and some high impact events missing the mark. The Core CPI data missed the forecast of 0.2%, coming in at 0.1%, while the Michigan Consumer Sentiment had a positive reading of 83.0, higher than the forecasted value which was 78.5. Last week, President Biden officially signed the $1.9 trillion Covid-19 stimulus relief bill into law. The package is set to immediately boost the US economy, alongside the growing numbers of citizens getting vaccinated.  

In the coming week, look out for the Gross Domestic Product data on Monday (22/03). 

 

EUR

There was not much economic data from the EU in the last week. A negative impact for the EU was the Gross Domestic Product data, which dropped lower than the forecasted value of -0.6% to -0.7% which is a bearish factor for the EUR. The ECB left the interest rate unchanged and the Employment Change data remained the same. 

In the coming week, important economic events for the EUR include the Markit PMI data on Monday (22/03) and the European Council Meeting on Thursday (25/03). 

 

AUD

It was also quiet for the AUD in the last week, with no major high impact events. Some positive data for Australia was the Westpac Consumer Sentiment, which beat the forecast value of 1.8% to 2.6% actual, as well as the MI Inflation Expectation which came in at 4.1%, which is bullish for the AUD. 

There are no high impact events for the AUD in the coming week. 

 

GBP

The pound continued to be supported within the last week, as it settled again on Friday. As vaccinations continue to rollout, the UK began its first transitions of removing the lockdown laws. Economic data from the UK was mixed, with the Trade Balance data coming in better than expected, as well as the GDP data which was -2.9% vs the -4.9% forecast. On the other hand, Manufacturing Production data was negative, coming in at -2.3% vs the -0.8% forecast, which is bearish for the GBP. Industrial Production data also missed the mark, with a reading of -4.9% vs -4.0% forecast. 

In the coming week, there’s a few high impact events to look out for. These include the Claimant Count Change and ILO Unemployment Rate on Tuesday (23/03) and the CPI data and Markit Service PMI on Thursday (25/03)

 

JPY

The JPY also had a week of mixed data, with mostly negative results. The GDP data dropped to 2.8%, down from the previous reading of 5.3% as well as the Current Account and Overall Household Spending data which were quite negative results. Some positive data for the JPY included low impact economic events like the Coincident Index and the Labor Cash Earnings data.

In the coming week, keep an eye on the BoJ Monetary Policy Meeting Minutes on Tuesday (23/03). 

 

CAD

In the last week, there was some positive economic data for the CAD. The Employment Change data was greatly positive, coming in at 259.2K vs the 75K forecast. This also supported the Unemployment Change data which was forecasted at 9.2% but came in at 8.2%, which is bullish for the CAD. The BoC once again left interest rates unchanged, as the CAD continues to be supported by rising oil prices. 

There are no high impact events for the CAD in the coming week. 

 

This article is by TradeProofer.

Leverage

In terms of trading, leverage is borrowed capital that allows you to increase your potential profits or losses. In Forex a common leverage amount offered is 100:1, meaning that for every $1 you have you can control $100 in equity.

Margin

Margin is the collateral you must keep in your account to maintain a leveraged position.

Open A Forex Trading Account

Opening a trading account with an Australian Forex Broker is an easy process that can typically be completed within a matter of minutes. To open an account with a forex broker there are three main steps:

  1. Fill out personal information
  2. Verify account with documents
  3. Client Qualification questionnaire

To open an account, you will need to provide your full name, nationality, email and phone number. Once you’ve completed these and set up a password you will typically be asked to choose the type of account and the trading platform, as well as your base currency. You will also be asked for your country of tax residence and tax details (TFN for Australians). Typically, providing specific tax information such as TFN is not compulsory. Brokers will also ask if you are a politically exposed person. The final personal information you must provide is your contact information, including your full address and how you would prefer to be contacted

The next section is financial information. Here you must provide your employment status information, annual income bracket and liquid net worth. Once you are through this section, the broker will ask your about your trading experience (Years) on securities, options, commodities, futures, CFD’s and OTC Forex Exchange, and if you understand the risk of margined transactions.

The client questionnaire assesses whether your knowledge of CFD’s is suitable for opening an account.

Margin Call

A margin call is a demand from the broker for the client to deposit funds to meet margin requirements for open/closed positions.

Short Position

A short sell is a position where the trader anticipates the price of an instrument to decrease, and sells a borrowed asset to buy it back in the future.

Long Position

A long position is a buy position, where the trader anticipates the price of an instrument to increase.

Test2

This is a test, all systems go!

Indicator

An indicator is something that assists traders finding where to enter and exit trades. An indicator could be calculated like a moving average or RSI or a drawn support/resistance level.