FX trading has always been subject to considerable financial risks. The degree of FX volatility seen this year does amaze even the most experienced Forex traders out there. Hantec Markets, one of the best client-oriented brokers in the contemporary Forex industry, recommends be cautious when trading Forex these days since there are a lot of economic, and geopolitical factors driving the market at this point. On top of that, it is always a good idea to cap your exposure to the market wisely so as to avoid major losses resulting in some big-scale and sometimes unexpected price moves. In particular, you shouldn’t trade big, at least bigger than you can actually afford without going to emotional about every market tick as you follow the trade.
Moreover, Hantec Markets ahs a lot of talented experts on board to the company’s clients be armed with knowledge as well as various tips and tricks. For example, Richard Perry shares his own standpoint regarding the drivers hat are going to move the FX market in the near future.
Greece, Interest Rates and Other Drivers
Greece has been one of the key focuses of the international trading community over the last few months. Most of the representatives of this community assume that Greece is mainly responsible for the recent weakness of the common European currency against the U.S. Dollar and other major currencies. Even though no news can influence the market forever, some events do generate pretty logical effect from time to time. While, the negative bias is still backed by Greece’s inability to sustain itself without external financial support, some major advancements leading to a more positive state of affairs may result in a recovery in the market of EURUSD. That is why Mr. Perry recommend stay tuned ant closely watch everything that relates to Greece and the entire Eurozone if you trade Euro currency pairs.
In particular, Mr. Perry recommends paying attention to interest rates set by the world’s major central banks, including the FED and the ECB. The interest rates are going to be some of the key drivers for the FX market throughout the rest of the year.
Fore example, the latest announcement made by Janet Yellen, Chair of the Federal Reserve, increased the overall market sentiment regarding the likelihood of forthcoming interest rate hikes by the Fed in the near future. Not so long ago, the likelihood used to be fairly low. Now, everything has changed. At this point, chances are the Fed will start raising the rates until the ned of 2015. This may result in a stronger dollar.
Still, the Fed leaves some space for maneuvers. Most likely, the central bank is trying to keep the intrigue alive, which promotes further speculative sentiment in the market. In particular, she says that the Fed is going to consider interest rate hikes only if the U.S. economy keeps on showing sings of growth. That is why it is worth monitoring the USA’s key economic indicators and news.
The same holds true for the Bank of England. The central bank is also hinting on the possibility of raising its own interest rates by December 2015. This may result in a stronger pound. At least, if that’s the case, we may well see increased volatility in the market o GBPUSD and other GBP pairs by Christmas.
What about the prospects of the common European currency?
According to Richard Perry, the likelihood of a major recovery is extremely low for now, especially as the Euro has turned into a highly speculative asset. Traders buy EUR to purchase riskier assets. A cheaper currency is a very good means to acquire something else. By the way, that’s why the USD index has recently reached the highest level since April 2015. At the same time, we cannot exclude the opportunity of seeing further strengthening of USD against EUR.
On the other hand, such commodity currencies as the Australian, New Zealand and Canadian Dollars are under pressure and trying to set new local lows against the U.S. Dollar amid an economic slowdown in China and other factors affecting he global consumption of commodities. In particular, it is a good idea to may attention to the fact that the Bank of Canada unexpectedly cut the interest rates not so long ago. Now everyone seems to wonder whether the Reserve Bank of New Zealand will do the same.
All in all, Richard Perry recommends watching the news coming from the U.S. housing market as well as the results of the forthcoming BOE meetings.
What financial assets to pay attention to?
As usual, EURUSD is going to be one of the most popular currency pairs. Expert recommend watching a major low located at 1,0818. If the price does break and consolidate below it, we are likely to see a further sellout. Still, Greece is going to be one of the deciding drivers for the Euro. Anyway, EURUSD is expected to keep on trading around 1,1050 in the near future. If the price recovers up to the level, the odds of seeing a reversal and a further round of Euro weakness will grow. If May’s low fails to let the Euro find the bottom, we may well se a further decline all the way down to 1,0658 and even 1,0456.
USDCAD may well be another interesting asset worth trading. Most likely, the currency pair will open excellent opportunities for the bulls on reaching levels of support. At the same time, the 6-month resistance level may be hard to overcome. Therefore, bull traders should reconsider heir expectations regarding any price move above current local highs. At this point, the former level of resistance 1,2800/1,2830 is considered as support. The 1,3060 level set in March 2009 looks a major resistance level as well.
At the same time, Richard Perry recommends paying attention to stock indexes. NASDAQ is trading around its lows. S&P 500 is also suitable for trading. The near-term fate of American indexes depends on the Fed’s interest rate decision as well as the state and prospects of the U.S. economy. DAX (Germany) and CAC 40 (France) are going to be influenced by the situation around Greece. A carry trade in the market of the common European currency may well help the 2 indexes. FTSE 100 (UK) may well stay a weak spot among the indexes. If you want a more comprehensive forecast by Richard Perry, please visit Hantec Markets’ official website.
