Hi, as of this morning Italy has now “locked down” a quarter of its population in a bid to stop the spread of the coronavirus after an alarming increase in cases of over 1200 more in the previous 24 hours.
Rome had already closed its schools and colleges, which has now been extended to at least 3rd April and all sporting events will now be played in empty stadiums.
Over the last few days the IMF have pledged $50 BILLION and the US over $8 billion and currently the Eurozone has done nada and yet the Euro continued to break higher last week! If you can not see that this is a crazy time to try and trade then listen up. Back in 2008/2009 when the financial crisis hit, I like many traders, continued to trade and like most I lost a significant amount of money.
I explained in an article 3 weeks ago, why you need to know when to trade and when to walk away. if you missed it you can find it here:
Gold (the ultimate safe haven) has hit a multi year high, 2012 was the last time it was in the $1700 region and then went higher. Oil is on the floor at just over $45 and OPEC have fallen out and Saudi Arabia is increasing production so its probably going lower, which of course should mean greatly reduced petrol prices at the pumps, which always take an inordinate amount of time to filter through to garage forecourts. When oil goes sharply up the price often goes up the next day!
Technical traders are looking at repeatable patterns and areas of support and resistance which are simply being ignored. Why? Because sentiment has taken over.
Fundamental traders (I use a mixture of both) are looking at data, however the NFP figures on Friday were much better than expected and yet the markets ignored it. The Usa has been proactive in committing to spend and cut rates to try both prevent the spread of the virus and support the markets yet they have only a handful of cases at the moment.
The Eurozone on the other hand (of which Italy is the 3rd largest economy and was already financially on its knees) has done nothing. Net result? The Euro kept going up! The Euro has technically broken a major trend line but there is no way I would consider buying it and trying to sell at the top continues to bite a lot of traders on the butt and in their wallets.
My best advice is to study. Do NOT trade a live account. If you really “need to trade” then do it on a demo account, but trade with rules and only take those trades that look stronger than the rest, 3 of which I detail below and share in the video.
If you are new and keen to get going this is not the news you want to hear BUT if people are being prevented from going to work as in Italy, then the ability to make a living trading from your back bedroom suddenly becomes a lot more attractive. The economic impact of locking down entire regions does not bear thinking about. How are people going to be able to pay for food, their mortgages, rent and bills? What are the banks going to do and do they have the capital to stand another big hit? The implications are quite terrifying.
Go through the courses and you can also study the economies of the major pairs to have a better understanding of what drives currency prices under normal circumstances. Here is an article from one of our USA members who did a case study on Australia in an attempt to understand what makes it tick. What does it export and to whom? What is the current stance of the central bank and what are they focusing on? All of which helps you understand which news events to focus on and give a better understanding of why the Aud is so weak and unlikely to turn anytime soon (except of course with the current meltdown, any pair could go in any direction)!
What I do find strange is that the conspiracy theorists who were looking at the laboratory in Wuhan province, which is only 20 miles away from the epicentre of the outbreak in China, were very quickly shot down, but my suspicious nature does make me wonder, what are they not telling us!
Here is an article from January which explains the concerns of some of the non-Chinese scientists as to the safety of this lab:
Here is the article I show in the video where a gentleman with far too many qualifications and job titles! explains the different possible financial outcomes of the virus, non of which from a survival rate estimation of worst case scenario 98% of those who catch the virus will live, down as low as 99.3% seem to support the current hysteria. “Global Macroeconomic Implications of COVID-19: Seven Scenarios
Personally, I will not trade. I am away on a private matter anyway so would not be tempted no matter what happens.
This week you have Pierre all to yourself in the live training session. He will go through his Earth & Sky system with you and ask any questions. If you have a specific topic you would like him to cover then this is a good week to do so. Please submit questions or topics via the helpdesk.
Please register for this week’s Forex Mentor Pro Live Training on
Tuesday’ at 11:00 AM GMT (London Time)
Click on the following link to register now:
If you have a topic you would like us to discuss, please let me know in the comments below or via the helpdesk.
We show in real-time what we are looking to trade and are happy to analyse any setups you may have found.
A live training session with Pierre du Plessis this week. He will assess his Earth & Sky system for potential trades. Followed by a Q & A session.
After registering, you will receive a confirmation email containing information about joining the webinar.
If you miss it, you will find a recording here on the blog, later the same day.
Forex Week Ahead
I explained last week that these were “stupid markets” and that I wouldn’t trade and why. I also cautioned against “buying the dips” for those looking to profit from the stock market crash. As we saw, after the initial retrace price on world stock markets continued to tumble.
If you missed it, here is the article, my thinking is exactly the same:
Price is currently miles away from potential set ups on most pairs.
The only ones that MIGHT be interesting later in the week IF things calm down, which seems unlikely right now.
Aud/Yen short at 75.00.
Cad (which did work last week) long at 1.3320
Nzd short at 0.6500
New members, please note: If I am looking to take a trade long, for example, 1.5000, I place my order 10 pips above & 10 pips below for a short. This is because price often does not quite reach a major line and you need to allow for spreads.
We are NOT a “tipping service” and our aim is to teach you how to trade for yourself.
For more up to the minute updates, do not forget to drop by the forum in Pierre’s corner.
Watch the video for more detailed explanations of this week’s detailed analysis and trade plan.
Click on the square button bottom right to watch in full-screen mode
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