Trading with the trend is one of the easiest ways to make money out of the forex market. This is true not only to forex but also to all other trading instruments, whether it be penny stock trading, index trading, binary options, commodities, etc. This is common knowledge among many traders. You would often hear the trading adage, “Trade with the trend.” But even though most traders know this, many are at a loss when determining the direction of a trend.
The final trading hours of May are upon us and the USD Index is on the ropes. Losses against the Swiss franc and Japanese yen have highlighted today’s forex action for the Greenback, sending June USD Index futures much lower. At this hour (1:30 PM EST), rates are near 97.770, well off of Thursday’s high of 98.195.
Safe-havens are in vogue today as trade war fallout is dominating market sentiment. Significant intraday gains in the Japanese yen, Swiss franc, and GOLD have come pass as investors are actively limiting risk. It appears as though a majority of traders are interested in hedging their bets ahead of the weekend break.
The fresh round of U.S. tariffs on Mexico has thrown the commodity markets into chaos. Agricultural commodities, as well as crude oil, have fallen out of bed as traders prepare for retaliatory tariffs on American exports to Mexico. At this point, ag products and oil are trending south in a big way.
The sentiment in financial markets shifted to negative at the end of last month as the trade war escalated once again after Donald Trump increased tariffs on China. Since then, risk aversion has been the name of the game in financial markets and we are seeing a similar price action almost everyday. Safe havens have been going up while risk assets keep declining and that’s what’s been happening today.
A fresh round of tariffs has equities investors running for the hills and the U.S. indices driving lower. The first half-hour of trade has been a tough one on Wall Street, led by a 300 point loss in the DJIA. New U.S. tariffs being slapped on Mexico are the primary fundamental at work, generating an abundance of negative sentiment .
EUR/USD has been on a bearish trend for more than a year, although this trend has slowed down considerably in recent months. But, the pressure is on the downside and the safest way to trade this pair is to wait for a pullback higher and then go short on it after the retrace has ended.
What’s up, traders.It’s been a volatile session for crude oil as WTI crude oil slipped below $59.61 to place a low around $54.90. On Friday, crude oil prices trade bearish after data showed the US crude inventories sank less than estimates from last week.
The recent yield inversion in US bond markets may have investors worried about a possible recession looming in the US economy, but the Fed isn’t worried just yet. Even as the US-China trade war concerns continue to weigh on markets, analysts expect Fed to continue holding off on any rate cuts in the near future.
GBP/USD turned bearish at the beginning of this month and it looks like it will close the month on a bearish foot. So far this pair has lost 600 pips from the top at the start of May and from the price action of the last couple of hours, it seems like the decline will stretch further to the downside.