Demand for risky assets has weakened amid a record number of new COVID-19 cases in the United States. Investors are concerned about possible introduction of new restrictive measures in the United States and other countries. During yesterday’s and today’s trading sessions, the drop in EUR/USD quotes has exceeded 60 points. At the moment, the trading instrument is consolidating in the range of 1.1260-1.1290. The single currency is tending to decline. Positions need to be opened from key support and resistance levels.
The news feed on 2020.07.10:
– The US producer price index at 15:30 (GMT+3:00).
Indicators do not send accurate signals: the price has crossed 100 MA.
The MACD histogram is in the negative zone, indicating the bearish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy EUR/USD.
Trading recommendations
Support levels: 1.1260, 1.1220, 1.1195
Resistance levels: 1.1290, 1.1305, 1.1330
If the price fixes below the level of 1.1260, a drop in the EUR/USD quotes is expected. The movement is tending to 1.1230-1.1200.
An alternative could be the growth of the EUR/USD currency pair to 1.1310-1.1340.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.25959
Open: 1.26063
% chg. over the last day: +0.03
Day’s range: 1.25668 – 1.26109
52 wk range: 1.1466 – 1.3516
The GBP/USD currency pair has stabilized after a prolonged rally. The pound sterling is currently consolidating. Local levels of support and resistance are: 1.2570 and 1.2625, respectively. In the near future, the technical correction of GBP/USD quotes is possible. Demand for risky assets has weakened. Positive data on jobless claims provides additional support for the greenback. Positions must be opened from key levels.
The news feed on the UK economy is calm.
Indicators do not send accurate signals: the price has crossed 50 MA.
The MACD histogram is in the negative zone, which gives a signal to sell GBP/USD.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which indicates the bullish sentiment.
Trading recommendations
Support levels: 1.2570, 1.2520, 1.2470
Resistance levels: 1.2625, 1.2675
If the price fixes below 1.2570, a correction of GBP/USD quotes is expected. The movement is tending to the round level of 1.2500.
An alternative could be the growth of the GBP/USD currency pair to 1.2670-1.2700.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.35107
Open: 1.35872
% chg. over the last day: +0.43
Day’s range: 1.35752 – 1.36313
52 wk range: 1.2949 – 1.4668
Purchases prevail on the USD/CAD currency pair. During yesterday’s and today’s trading sessions, the growth of quotations has exceeded 100 points. The trading instrument has reached local extremes. Loonie is currently testing the resistance level of 1.3630. The mark of 1.3585 is already a “mirror” support. USD/CAD quotes are tending to grow. We recommend you to pay attention to the dynamics of prices of “black gold”. Positions must be opened from key levels.
At 15:30 (GMT+3:00), a report on the labor market of Canada will be published.
Indicators point to the power of buyers: the price has fixed above 100 MA.
The MACD histogram is in the positive zone, which gives a signal to buy USD/CAD.
Stochastic Oscillator is near the overbought zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.3585, 1.3555, 1.3520
Resistance levels: 1.3630, 1.3660, 1.3700
If the price fixes above 1.3630, the USD/CAD quotes are expected to rise. The movement is tending to 1.3660-1.3680.
An alternative could be a decrease in the USD/CAD currency pair to 1.3560-1.3530.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 107.262
Open: 107.149
% chg. over the last day: -0.04
Day’s range: 106.806 – 107.264
52 wk range: 101.19 – 112.41
The USD/JPY quotes show a negative trend. The trading instrument has set new local lows. The USD/JPY currency pair has found support at 106.80. The mark of 107.05 is already a “mirror” resistance. Demand for “safe haven” currencies is still high. The yen is tending to grow. We recommend you to pay attention to the dynamics of yield on US government bonds. Positions must be opened from key levels.
The news feed on the Japanese economy is calm.
Indicators point to the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, indicating the bearish sentiment.
Stochastic Oscillator is in the oversold zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 106.80, 106.50
Resistance levels: 107.05, 107.20, 107.35
If the price fixes below 106.80, a further drop in the USD/JPY quotes is expected. The movement is tending to 106.50-106.20.
An alternative could be the growth of the USD/JPY currency pair to 107.20-107.40.
The Euro continued to stabilise against the region around 1.1150/1200, while still aiming at the 1.1300 mark, as such a sustainable break higher levels the path up to 1.1400/50 and possibly even higher.
Technically, we consider the region around 1.1350 to be the “make-or-break” level, where a sustainable break higher could deliver the fuel for a stint up to the region around the current yearly highs.
But the question is: “What could ignite such a bullish stint and break higher?”, especially given the quite thin economic calendar for the weekly close and the near-future?
Our main focus remains on the developments in 10-year US yields, as they near the important support region around 0.60%, and a break lower would not only drive Gold higher, but also the USD lower (thus pushing EUR/USD higher).
As already pointed out in our last on Gold last Wednesday, the shrinking Fed balance sheet resulting out of a continuing decline in demand for the US central bank’s USD swap lines from foreign central banks like the ECB, BoJ or BoE while rather sooner than later reverse again and thus result in pressure on US yields and on the US dollar again.
Therefore, we should keep a close eye on developments in Equity markets, where rising volatility could trigger such an expansive monetary policy approach from the Fed among market participants.
While short-term a break above 1.1350 brings the focus on the region around 1.1400/50, the broader picture and break above leaves EUR/USD with bullish potential up to the region around 1.1700/1.1800, while only a drop below 1.1150 could trigger a deeper correction with a target around 1.1000:
Source: Admiral Markets MT5 with MT5-SE Add-on EUR/USD Daily chart (between May 10, 2019, to July 9, 2020). Accessed: July 9, 2020, at 10:00pm GMT – Please note: Past performance is not a reliable indicator of future results, or future performance.
In 2015, the value of the EUR/USD fell by 10.2%, in 2016, it fell by 3.2%, in 2017, it increased by 13.92%, 2018, it fell by 4.4%, 2019, it fell by 2.2%, meaning that after five years, it was down by 7.3%.
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– Yes, we certainly live in interesting times. This, the last segment of our multi-part article on the current Q2 and Q3 2020 US and global economic expectations, as well as current data points, referencing very real ongoing concerns, we urge you to continue using common sense to help protect your assets and families from what we believe will be a very volatile end to 2020. If you missed the first two segments of this research article, please take a moment to review them before continuing.
On May 24th, 2020, we published this research article related to our super-cycle research. It is critical that you understand what is really happening in the world as we move through these major 21 to 85+ year super-cycles and apply that knowledge to the data we have presented in the first two segments of this research post. Within that article, we quoted Ray Dalio from a recent article published related to his cycle research.
“In brief, after the creation of a new set of rules establishes the new world order, there is typically a peaceful and prosperous period. As people get used to this they increasingly bet on the prosperity continuing, and they increasingly borrow money to do that, which eventually leads to a bubble. As prosperity increases the wealth gap grows. Eventually, the debt bubble bursts, which leads to the printing of money and credit and increased internal conflict, which leads to some sort of wealth redistribution revolution that can be peaceful or violent. Typically at that time late in the cycle, the leading empire that won the last economic and geopolitical war is less powerful relative to rival powers that prospered during the prosperous period, and with the bad economic conditions and the disagreements between powers, there is typically some kind of war. Out of this debt, economic, domestic, and world-order breakdowns that take the forms of revolutions and wars come new winners and losers. Then the winners get together to create the new domestic and world orders.”
That rather chilling statement suggests one thing that we all need to be aware of at this time: what the current and future economic cycles will likely present and how the world will navigate through this process of a cycle transition.
In our opinion, the massive cycle event that is taking place may not disrupt world order as Mr. Dalio suggests. There is a very strong likelihood that credit/debt processes may become the “collateral damage” of this cycle transition, but not much else changes. The world order and powerful nations across the globe are keenly aware that starting WWIII because of a credit/debt crisis is not in anyone’s interest. The world has enough capability to address these concerns without blowing the planet to pieces in the process.
Our super-cycle research suggests we have entered a period that is very similar to 1919~1920 – a “roaring good time” most likely has already extended beyond reasonable levels. Our research suggests a massive peak in cycle events near 2023~24 after an already substantial support cycle from 2007~08 to 2023~24. This span of time, roughly 17 years, is very likely to be a blend of the Unraveling & Crisis phases of the super-cycle. We believe the broader Crisis phase will continue to transition throughout a span of time lasting well into 2031~2034. This suggests we may have another 11 to 15+ years of a massive unwinding cycle throughout the globe.
SUPER-CYCLE RESEARCHER DATA FROM OUR RESEARCH TEAM
Our research team believes the COVID-19 virus event sent these super-cycles into Warp-Speed recently. The US stock market was poised to rally early in 2020 and may have experienced a multi-year rally had it not been for the COVID-19 disruption that took place in Mid-February. The destruction of the economy related to the COVID-19 shutdown is still playing out. Recent news suggests 41% of businesses that closed on Yelp have shut down permanently. Now, consider that this means for consumers and local governments related to earning and revenue capabilities? Workers have been fired and have completely lost earnings capabilities. Business owners now face credit/debt issues and possible bankruptcies. Local governments have lost revenue from taxes, payroll, sales, and fees and permits. This destructive cycle continues until the economy has shed the “excess” within all segments of core economic function.
MORE DATA & MORE PREDICTIONS
Within the first two segments of this article, we’ve highlighted numerous data points and charts to more clearly illustrate the current global market environment. We have to consider the reality of what is happening on the ground throughout the world and, in particular, what is happening in the US and most major economies right now. If 30 to 40%, or more, of local businesses, are closing permanently, this suggests that 30 to 50% of tax revenues for local governments will also vanish. It also suggests that these displaced workers and business owners will need to find new sources of income/revenue over the next 12+ months.
As much as we would like to think a “V-shaped” recovery is highly likely, it’s not going to happen is 30 to 50% of the US economy is suffering at levels being reported currently. Yes, you could have investors pile into the US stock market because they believe the US economy is the most likely to develop a strong recovery in the future, but that will likely happen after the excess has been processed out of the economy through a business/credit contraction phase. The current stock market valuation levels seem to ignore the fact that consumer and business activity has likely collapsed by a minimum of 25 to 45% (or more) over the past 90+ days – and may not recover to levels anywhere near the early 2020 economic activity levels.
Still, if you listen to the news and watch the data related to the real estate market, you would think there has been no disruption in the US economy. Supposedly, homes are still selling quickly and the market is very robust. The Case-Shiller 20 city home price index is well above 220, the highest levels ever reached for this index. This suggests home prices have risen to levels that are likely 15% to 30% higher than the peak levels in 2006-2007 – yet we’ve just experienced a massive economic disruption across the globe where 25% to 45% (or more) of our economic earning and income capability has vanished. Read between the lines if you must – something doesn’t seem to be reporting valid data at the moment.
The Consumer Price Index has recently started falling. The only times in history where the CPI level has initiated substantial downward trends are throughout major recessionary or contraction economic phases. It is very likely that the decrease in the CPI level is reflecting a supply glut pricing effect as a result of the COVID-19 shutdown process. When consumer activity drops dramatically while supply channels continue as normal, a supply glut happens. When this happens, price levels must adjust and address the over-supply of goods and raw materials stacking up in warehouses, containers, and ships.
If the consumers earning and spending capabilities are disrupted long enough, the manufacturing and supply side of the equation can’t react fast enough to the immediate decline in demand. Therefore, the supply glut continues for a period of time as manufacturers attempt to scale-down the production levels to address for proper demand levels. Obviously, lower demand equates to lower sales volumes and lower-income levels for manufacturers and sales outlets. This translates into layoffs at the factories, sales outlets, and all levels in between. The cycle continues like this until an equilibrium is reached between supply and demand.
This translates into lower-earning expectations for much of the US and foreign markets compared to previous expectations. While the S&P 500 stock price levels have recovered to nearly the early 2020 price levels, it seems rather obvious to us that Q2 earnings data will likely shock the markets with dramatically lower results and forward expectations – in some cases these numbers may be disastrous.
When Nike released their Q4 (May 2020) earnings and showed a nearly $800 loss because of the early COVID-19 shutdown, this should have presented a very real understanding of how all levels of retail, manufacturing, and consumer services would also likely show a dramatic economic contraction taking place. Currently, we are watching for news of new US businesses entering the bankruptcy process. This recent article suggests business bankruptcies are skyrocketing higher – yet are still below the 2008~09 levels. Please keep in mind that we are only 90+ days into this COVID-19 virus event – so this data is still very early reporting.
Still, the numbers are very telling…
“US filings totaled 3,427 on June 24, according to data from Epiq seen by the Times. The reading also closes in on the financial-crisis reading of 3,491 companies entering bankruptcy in the first half of 2008. “
If you are reading the same data I read from that statement, the difference between the 2008 levels and current levels is only 64 additional bankruptcies in the US – less than a 2% difference in total bankruptcies.
The reality of the current market conditions is that we are only 90+ days into this processing of all this new data and attempting to understand what is likely to become a new operating norm for global economies. In 2008-09, the unwinding process took place over a full 12 to 16-month process. The recovery process too much longer – more than 5+ years. Currently, the unwinding process of the COVID-19 collapse took less than 30 days and the recovery process took a little over 90 days.
If our research team is correct, the speed at which the current recovery took place is nothing more than a reactionary recovery to a problem that was sudden and full of uncertainty. The Q2 data will likely solidify the uncertainty and unknowns into very real economic values (losses) and may shock the US stock market into a downward price reversion phase.
We believe one of the best hedging tools any skilled technical trader can use right now is Gold and Silver (Precious Metals). We continue to urge our friends and followers to maintain a portion of our portfolio in precious metals as a hedge against risk and unknowns throughout most of 2020 and beyond. If the Q2 data does what we believe it will do, shock the markets, then a moderately violent and volatile downside price move is pending. Simply put, you can’t destroy 25 to 45% of an active economy and displace millions of workers while sustaining high price valuations – unless you have a bubble-like euphoric investor mentality. That, ladies and gentlemen, is exactly what we believe is happening right now.
The super-cycle event that took place between 1920 and 1929 was nothing more than a euphoric bubble-like event where investors and traders had “no fear”. Everyone was leveraging everything they could to try to jump into the markets because they believed nothing could stop the rally. Keeping this in mind, you may want to read this recent research post about parabolic bubbles we published on June 23, 2020.
When bubbles burst, most commonly done when investors suddenly come to their senses in terms of real valuation expectations, the downside price moves can be extremely distressing. We urge you to properly understand that may happen with Q2 earnings data and new announcements. We also urge you to understand the COVID-19 virus event may have moved the super-cycles into some type of “warp-speed”. If our research is correct, we could be speeding towards a massive unwinding/crisis cycle phase very similar to 1929~1945.
Please read all the previous segments of this article and please properly position your portfolio to protect your assets. There will be lots of other trades in the future for all of us. These bigger price moves are not suddenly going to end because of Q2 or Q3 data. Be patient and stay protected. Q2 data is almost here and we are about to see some realization of the COVID-19 economic destruction process.
Get our Active ETF Swing Trade Signals or if you have any type of retirement account and are looking for signals when to own equities, bonds, or cash, be sure to become a member of my Passive Long-Term ETF Investing Signals which we are about to issue a new signal for subscribers.
Chris Vermeulen Chief Market Strategies Founder of Technical Traders Ltd.
NOTICE: Our free research does not constitute a trade recommendation or solicitation for our readers to take any action regarding this research. It is provided for educational purposes only. Our research team produces these research articles to share information with our followers/readers in an effort to try to keep you well informed.
XAUUSD is trading at 1812.00; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1805.00 and then resume moving upwards to reach 1845.00. Another signal in favor of further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may no longer be valid if the price breaks the cloud’s downside border and fixes below 1775.00. In this case, the pair may continue falling towards 1745.00.
EURUSD, “Euro vs US Dollar”
EURUSD is trading at 1.1358; the instrument is moving above Ichimoku Cloud, thus indicating an ascending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.1325 and then resume moving upwards to reach 1.1445. Another signal in favor of further uptrend will be a rebound from the rising channel’s downside border. However, the bullish scenario may be canceled if the price breaks the cloud’s downside border and fixes below 1.1265. In this case, the pair may continue falling towards 1.1195.
AUDNZD, “Australian Dollar vs New Zealand Dollar”
AUDNZD is trading at 1.0611; the instrument is moving below Ichimoku Cloud, thus indicating a descending tendency. The markets could indicate that the price may test Tenkan-Sen and Kijun-Sen at 1.0620 and then resume moving downwards to reach 1.0530. Another signal in favor of further downtrend will be a rebound from the descending channel’s upside border. However, the bearish scenario may no longer be valid if the price breaks the cloud’s upside border and fixes above 1.0695. In this case, the pair may continue growing towards 1.0755.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
As we can see in the H4 chart, the pair has started forming a new ascending channel. Right now, EURUSD is reversing after forming a Hammer pattern. Considering the current bullish dynamics, the price may finish the correction and then resume trading upwards to reach the resistance level at 1.1420. At the same time, an alternative scenario implies that the instrument may continue falling to return to 1.1330.
USDJPY, “US Dollar vs. Japanese Yen”
As we can see in the H4 chart, after forming an Engulfing pattern not far from the resistance area, USDJPY has started reversing. At the moment, the pair is moving downwards. The current situation implies that after a slight correction the market may resume the descending tendency towards the support level at 106.67. Still, there is an opposite scenario, which says that the instrument may grow and return to 108.08.
EURGBP, “Euro vs. Great Britain Pound”
As we can see in the H4 chart, after testing the rising channel’s downside border and forming a group of reversal candlestick patterns, including Hammer, EURGBP has started reversing. The upside target remains at 0.9120. In the future, the instrument may continue trading upwards to update the highs. However, there might be another scenario, according to which the asset may correct towards the support level at 0.8950.
Attention! Forecasts presented in this section only reflect the author’s private opinion and should not be considered as guidance for trading. RoboForex LP bears no responsibility for trading results based on trading recommendations described in these analytical reviews.
The EUR/USD quotes have moved to growth. During yesterday’s and today’s trading sessions, the single currency has added more than 90 points in price relative to the greenback. At the moment, the trading instrument is consolidating in the range 1.1330-1.1370. The United States recorded a new world record of COVID-19 infections. Investors are concerned about the introduction of new restrictive measures. Today, the focus is on data on jobless claims in the United States. Positions need to be opened from key support and resistance levels.
The news feed on 2020.07.09:
– The number of jobless claims in the United States at 15:30 (GMT+3:00).
Indicators point to the power of buyers: the price has fixed above 50 MA and 100 MA.
The MACD histogram is in the positive zone, indicating the bullish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which gives a signal to sell EUR/USD.
Trading recommendations
Support levels: 1.1330, 1.1300, 1.1285
Resistance levels: 1.1370, 1.1400
If the price fixes above 1.1370, EUR/USD is expected to rise. The movement is tending to 1.1400-1.1430.
An alternative could be a decrease in the EUR/USD currency pair to 1.1300-1.1280.
The GBP/USD currency pair
Technical indicators of the currency pair:
Prev Open: 1.25338
Open: 1.25959
% chg. over the last day: +0.55
Day’s range: 1.25947 – 1.26525
52 wk range: 1.1466 – 1.3516
The GBP/USD currency pair continues to show a steady uptrend. Sterling has set new local highs. GBP/USD quotes have found resistance at 1.2650. The mark of 1.2585 is already a “mirror” support. The UK government has introduced a new plan to support the economy in times of crisis, which provides incentive measures totalling about 30 billion pounds. The trading instrument is tending to grow. Positions must be opened from key levels.
The news feed on the UK economy is calm.
Indicators point to the power of buyers: the price has fixed above 50 MA and 100 MA.
The MACD histogram is in the positive zone, which gives a signal to buy GBP/USD.
Stochastic Oscillator is in the neutral zone, the %K line is below the %D line, which indicates a bearish sentiment.
Trading recommendations
Support levels: 1.2585, 1.2520, 1.2470
Resistance levels: 1.2650, 1.2700
If the price fixes above 1.2650, further growth of GBP/USD quotes is expected. The movement is tending to the round level of 1.2700.
An alternative could be a decrease in the GBP/USD currency pair to 1.2540-1.2500.
The USD/CAD currency pair
Technical indicators of the currency pair:
Prev Open: 1.35985
Open: 1.35107
% chg. over the last day: -0.68
Day’s range: 1.34941 – 1.35251
52 wk range: 1.2949 – 1.4668
The bearish sentiment is prevailing in the USD/CAD currency pair. The trading instrument has overcome and fixed below the key extremes. Loonie is currently consolidating in the range of 1.3490-1.3525. USD/CAD quotes are tending to decline. We recommend you to pay attention to the dynamics of prices of “black gold”. Positions must be opened from key levels.
At 15:30 (GMT+3:00) statistics on the real estate market in Canada will be published.
Indicators point to the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, which gives a signal to sell USD/CAD.
Stochastic Oscillator is located near the oversold zone, the %K line has crossed the %D line. There are no signals at the moment.
Trading recommendations
Support levels: 1.3490, 1.3450
Resistance levels: 1.3525, 1.3555, 1.3580
If the price fixes below 1.3490, a further drop in the USD/CAD quotes is expected. The movement is tending to 1.3460-1.3430.
An alternative could be the growth of the USD/CAD currency pair to 1.3550-1.3570.
The USD/JPY currency pair
Technical indicators of the currency pair:
Prev Open: 107.544
Open: 107.262
% chg. over the last day: -0.24
Day’s range: 107.181 – 107.364
52 wk range: 101.19 – 112.41
The USD/JPY currency pair is still in a flat. The technical pattern is ambiguous. At the moment, the trading instrument is consolidating in a rather narrow range of 107.20-107.35. Participants in financial markets expect additional drivers. We recommend you to pay attention to the dynamics of yield on US government bonds. Positions must be opened from key levels.
The news feed on the Japanese economy is quite calm.
Indicators point to the power of sellers: the price has fixed below 50 MA and 100 MA.
The MACD histogram is in the negative zone, indicating a bearish sentiment.
Stochastic Oscillator is in the neutral zone, the %K line is above the %D line, which gives a signal to buy USD/JPY.
Trading recommendations
Support levels: 107.20, 107.05, 106.80
Resistance levels: 107.35, 107.60, 107.75
If the price fixes below 107.20, USD/JPY is expected to fall. The movement is tending to 106.90-106.70.
An alternative could be the growth of the USD/JPY currency pair to 107.50-107.80.
The UK finance minister Rishi Sunak’s Summer Statement can be expected to spook many higher earners into considering the available international financial planning options, affirms the CEO of one of the world’s largest independent financial advisory and fintech organizations.
The comments from Nigel Green, chief executive and founder of deVere Group, follows the UK Chancellor’s so-called ‘mini Budget’ in which he announced a raft of measures to help the UK economy recover from the worst effects of coronavirus.
Mr Green notes: “The Chancellor Rishi Sunak has set out a series of extra measures to help kick-start the UK economy, whilst revealing that the Treasury has allocated £188bn of economy-bolstering measures since the start of the Covid-19 pandemic.
“He has galvanised his position as Santa Sunak and has, rightly, been praised for his handling of the economy; he has done an impressive job.
“But what happens when, in the Budget in November, he is forced into becoming Scrooge Sunak to pay for his record-beating level of support measures.”
He continues: “Many higher earners and investors will now be looking forward and thinking that the result of Sunak’s largesse, inevitably, means higher taxes to help plug the enormous £300bn blackhole in government coffers.
“Taxes on income contribute the highest proportion of the government’s tax-take, meaning even a small change would have a disproportionately positive impact for the Treasury.
“But they will not want to be hitting household incomes too much at this stage, as it will move to raise taxes in the medium to longer-term in order to indicate to financial markets that they are intent on controlling the deficit.
“There is also the potential of the oft-mooted one-off or continual tax on personal wealth.”
Mr Green goes on to add: “This can all be expected to spook higher earners into considering the available international financial planning options.”
Back in May, the deVere boss said: “It is almost inevitable that pension tax relief will be a target as the government looks to plug gaps in November’s Budget.
“As it’s likely the pension contribution relief for those on higher incomes will be reduced, an increasing number of people are now mulling making a larger one-off contribution before the Budget, in order to benefit from the higher tax relief whilst they still can.”
Nigel Green concludes: “We’re in highly unusual times economically and taxes will need to be raised to fund the gap. Those who will be likely expected to carry the burden can be expected to be exploring all the legitimate financial planning options, including international ones, to safeguard their wealth.”
About:
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of more than 70 offices across the world, over 80,000 clients and $12bn under advisement.
– Elliott Wave International’s online trading course teaches traders how to identify, draw, and use trendlines to seize high-confidence set-ups in any market, on any time frame — Now FREE through July 14!
Today, the lines between what life looked like before the global pandemic of 2020 — and what it’ll look like after — seem forever blurred. Will we have the same job? Will our formerly college-bound children ever leave the house? Will we even live in the same state, or the same country?
Being a trader in times like these, even if only as a fallback option, is not a bad idea.
If that thought has crossed your mind, how would you like to learn a simple technique to identify new trading opportunities?
That technique is drawing trendlines. Elliott Wave International’s trading instructor Jeffrey Kennedy says:
“Trendlines are the simplest and most effective analytical tool traders can apply, be it to a stock, currency, or commodity.”
“They’re more effective than people realize.”
“And so simple, a kid with a ruler can use them.”
Hey, just think! You can add trendline drawing to your child’s at-home school curriculum…
But seriously, folks! There is a reason why Elliott Wave International is bringing back Jeffrey Kennedy’s popular online course “How to Use Trendlines to Spot Reversals and Ride Trends” now.
Today, millions of people around the world are turning to trading at home for the first time. The search for guidance is at an all-time high. If you’re one of them, or even if you’re an experienced trader, this course is for you … and you can take it today 100% free. (More on that below.)
But first — trendlines are simple straight lines connecting two price extremes on a chart. When you draw more than one, you create a so-called trend channel and see both the future trend and trend reversals.
Simple? Yes. And the results can be impressive.
Here’s a real-life example from Elliott Wave International’s Trader’s Classroom, which Jeffrey Kennedy edits: Tesla Motors, Inc. (TSLA).
Tesla’s shareholders are used to the fact that the company’s CEO Elon Musk can be a loose cannon, prone to unpredictable behavior like performing a striptease at a new model launch in China.
But in his November 21, 2019Trader’s Classroom — before TSLA zoomed above $1000 — Jeffrey showed how simple trendline analysis made the coming rally quite predictable:
“We’ve gotten above the upper boundary line of the developing base channel.”
“I think we’re going to see a run on say 475-500″ by the end of 2019.”
“This is a ‘very confident buy-side opportunity.'”
From there, TSLA rocketed 60% in December and January to new all-time highs:
Today, as you know, TSLA is an investor darling, with prices hovering well above $1000.
But what got the rally started — before most people would look twice at the stock — was a simple bullish trendline break.
“How to Use Trendlines to Spot Reversals and Ride Trends” gives you 90+ minutes of trading lessons that teach you how to effectively use this tool.
You’ll learn how to:
Quickly identify a trend — up, down or sideways
See if investor psychology is supporting the trend
Define critical support and resistance levels for tight risk management
See when a correction is over and the trend is resuming
Most importantly, you’ll learn to recognize when a new opportunity is REAL or “fake.”
AND HERE’S THE BEST PART … THIS COURSE IS FREE!
Through July 14, you can take Jeffrey Kennedy’s online trading course, “How to Use Trendlines to Spot Reversals and Ride Trends,” 100% free as a member of Elliott Wave International’s Club EWI.
Club EWI really is free — there is no fee or credit card required to join its 350,000+ online members.
By the way, at Elliott Wave International’s online Store, this course sells for $79. So, don’t miss this free opportunity to learn a useful skill. Take this online course now, FREE.
Financial markets in the post-Soviet space improved drastically. With the development of technology and the Internet, a lot of people started trading various instruments from stocks to crypto. Actually the former is considered to be the most popular instrument in most of those countries, but gold and crypto are also rampant. In this article, we will talk about them.
Crypto
Estonia, as well as Russia, are at the forefront of crypto innovations in the post-Soviet space. Also, Belarus became the first country in the space to launch a cryptocurrency exchange.
The exchange accepts Bitcoin and Ethereum, as well as fiat money and a lot of people started trading.
Tokenized assets for raw materials, stocks, indices linked to the base market value of traditional financial assets are also traded on the exchange. It is possible to make money using Visa and Mastercard bank cards issued by any banks, including foreign ones.
Crypto is a very popular instrument in Russia and Estonia as well. As trading is evolving gradually, people use Bitcoin and Ethereum for the most part to earn some money. Other countries are still emerging, however, crypto has not gained a foothold there yet.
Stocks
Stocks have become a very popular option among post-Soviet citizens. The trend is very visible in Russia and Ukraine, but interestingly Georgia has turned a country in recent years, where investors and people turn to stock trading. When an ordinary citizen wants to get information on how to buy stocks in Georgia the material is available on various websites on national banks. Because of this, many found the material useful, thus it became a driver to start trading stocks, which in general was not characteristic until 2010.
The choice in favor of trading stocks on the stock exchange in post-Soviet countries is due to several reasons. In part, they are psychological, as they provide the investor with tangible guarantees of return on investment. But there are objective factors. For example, all securities have liquidity due to material wealth: real estate of the enterprise, its raw materials and inventories.
The following is also attractive: The stock price does not depend directly on the value of currencies, raw materials (trading due to the lack of correlation is less dependent on interventions on currency pairs). Also, a crisis in a country or in a global market may not affect individual companies. Furthermore, investments in the assets of large companies are easier to predict than changes in the cryptocurrency market, precious metals.
Gold
And we have come to the final instrument, which is gold. Residents from post-Soviet countries pay particular attention to gold trading in financial markets. However, it could be regarded as the most complicated form of trading.
Gold trading on Forex and in the post-Soviet space is highly complex because accurate information on this market is practically not publicly available – no one can say how much gold is on the gold market, where it is located, how much is offered for sale, etc. In trading this instrument, traders rely on a number of indirect factors that accurately affect the market for this asset.
First, gold is considered a safe asset and this determines the demand for it. In times of crisis or in times of uncertainty in markets, demand for gold is growing – it is considered a safe haven for cash, which will at least preserve, and at a maximum, increase capital after the situation stabilizes.
Citizens from the post-Soviet know a very simple concept. The traditional rule that is followed in the gold trade is that, in unfavourable periods for the economy, the demand for gold grows, and in an atmosphere of dynamic growth, interest in gold decreases, since there are more opportunities to invest profitably.
Another rule of thumb is that gold can protect against inflation, which is why precious metals are also in high demand in the period of high values. This rule implies the importance of monitoring the policies of central banks – the super-soft monetary policy raises inflationary expectations in the market, which means it can serve as an indicator for timely investments in gold.
Finally, the dynamics of the US dollar is in itself considered an indicator of demand for gold – the dollar exchange rate and the price of this metal, as a rule, are inversely related, largely due to the fact that the lion’s share of world gold trading occurs for dollars on US exchanges and their allies.
Let’s (again) delve into the connection between the stock market and news
The stock market is a fractal — i.e., a self-repeating form at all degrees of trend. Meaning, without the time or price labels, you can’t tell if you’re looking at a 2-minute chart or at a monthly one.
What’s more, stock market trends unfold in repetitive and recognizable price patterns.
What’s more, these patterns — Elliott wave pattens — emerge regardless of the news.
Yes, there may be very brief reactions to news, but then the main trend continues. That’s because the larger stock market trends aren’t driven by the news, they are driven by market participants’ bias, bullish or bearish. What we call, market psychology.
That’s why you often see headlines with the word “despite” in them — like, “Stocks rally despite U.S. unemployment at the highest level since the Great Depression,” or “Stocks fall despite stronger-than-expected consumer confidence report.” That word, “despite,” tells you everything you need to know.
Review Part I and Figures 1 through 5 in Chapter 12 of Robert Prechter’s 2017 book, The Socionomic Theory of Finance, and you’ll see evidence that the market is not priced according to external conditions.
And, here’s what the book says about those brief reactions:
Evidence for even temporary emotional reactions in markets is surprisingly suspect. All market observers have seen futures prices gyrate more intensely for a few seconds or minutes before and/or after an announcement perceived as major news. However, ensuing market movement may be totally opposite to the tenor of such news, even when it is a total surprise.
This quote came to mind when, on June 29, this sobering news appeared on a major financial website (CNBC):
Nearly half the U.S. population is without a job, showing how far the labor recovery has to go
The employment-population ratio — the number of employed people as a percentage of the U.S. adult population — plunged to 52.8% in May, meaning 47.2% of Americans are jobless.
Interestingly, on that very day, the DJIA closed up 580 points.
Plus, as you know, the stock market has bounced back substantially since the March lows, despite a historic slew of negative news.
Indeed, the June Elliott Wave Theorist, a monthly publication which has offered subscribers analysis of financial markets and cultural trends since 1979, showed this chart and said:
The first reports of economic contraction came out in March and continued through May. … Stock prices not only rose for seven weeks but also jumped higher on nearly every report of a rise in unemployment claims. A particularly big up day occurred when statistics suggested an increase in employment, but analysts quickly recognized that the numbers were untrustworthy due to restrictions in data collection deriving from the pandemic. No matter; stocks went up the next day, too.
In fact, you can also see that the stock market rose more than it fell when Covid-19 dominated the headlines! It also rose on the day of the first protests — and continued to climb for two weeks, despite the vandalism, looting and clashes between protestors and police not seen in decades.
The real driver of the stock market’s trend is investor psychology, which Elliott waves reflect.
As the book, Elliott Wave Principle: Key to Market Behavior, notes:
The Wave Principle is governed by man’s social nature, and since he has such a nature, its expression generates forms. As the forms are repetitive, they have predictive value.
Sometimes the market appears to reflect outside conditions and events, but at other times it is entirely detached from what most people assume are causal conditions. The reason is that the market has a law of its own.
This article was syndicated by Elliott Wave International and was originally published under the headline Stock Market: “Relevant Waves Vs. Irrelevant News”. EWI is the world’s largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.
