Forex basics and my trading with FBS

SebsCubs

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Everyone is interested in trading gold (XAU/USD). The meeting of the Federal Reserve at 21:00 MT time (GMT+3) will certainly drive the price. In this article, however, we’ll look at the technical side of things to see what opportunities lie there.

First, the uptrend since the end of March is still in place. On the weekly chart, there’s a 50-week MA just below $1855 – this level is supporting the price.

Second, on the D1 an Inside bar formed yesterday: it’s a sign that the price is consolidating ahead of the major breakout. The decline below $1855 will open the way down to $1845/$1840 (200-day MA). If XAU/USD stays above $1855, it will rise to $1867. A further breakout will bring the price shoot up to $1874 and $1880.

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Reference: FBS (16.06.2021) Gold: short term trade ideas.
 

SebsCubs

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Nikkei 225 has sharply dropped after the hawkish surprise from the Federal Reserve. The central bank claimed it might raise interest rates in 2023 (or even in late 2022) and also started a discussion on cutting bond buys. Well, that decision pushed the USD dollar up and pressed some stocks down. Which ones? Stocks that were favored in reflation trade or, in other words, those that benefited from higher inflation: value and cyclical stocks. The worst performers of the last week were banks and cyclical-heavy Japanese stocks.

The Japanese stock index Nikkei dropped by 4% – the most since April! It has a huge proportion of economically sensitive stocks, that’s why the hit was so hard. Uniqlo (Fast Retailing Co.), the clothing retailer, and the chip-equipment producer Tokyo Electron Ltd. dropped the most on the index. Besides, the slow vaccination pace in Japan and the dark outlook for the Tokyo Olympics pressed the stock index down as well. Still, the JP 225 is at the all-time highs. This drop may be just a healthy correction ahead of the further rally up.

The JP 225 INDEX is moving inside the descending channel. The long lower shadow of the last candle gives a bullish signal. The sentiment has started changing, and the stock index may rise to the 50-day moving average of 28,900. The breakout above this level will drive the pair to the last week’s high of 29,400. This resistance level won’t be broken on the first try as the stock index has failed to do that a few times. On the flip side, the move below the 200-day moving average of 27,500 will push JP 225 to the next round number of 27,000.



JP225Daily.png




Reference: FBS (21.06.2021) Greatest sale of Japanese stocks
 

SebsCubs

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These days, investors’ attention is on Microsoft ahead of the company’s Windows 11 event on June 24. MSFT will uncover the “next generation of Windows”, that’s why the stock price has surged: the tech giant reached the all-time high of $263.50. It is still unclear what the company will release during the event, but investors tend to follow the rule “buy the rumor, sell the fact”.

Forecasts​

According to TipRanks, Microsoft currently holds a “Strong Buy” recommendation. According to JPMorgan, the stock price will hit $270 – the lowest price target among other banks. Goldman Sachs set a price target at $340, which is 30% higher than the current levels.

Cloud acquisition​

Just to remind you, Microsoft is not only Office 365, it’s a lot more! Think of Xbox and Teams. The company's cloud offerings are Azure infrastructure services, Office 365 productivity software, and Dynamics enterprise software. Besides, Microsoft owns LinkedIn, Skype, OneDrive, and GitHub.

Microsoft takes one of the leading positions in cloud computing among Google and Amazon. After the coronavirus outbreak, cloud services become essential for most companies. In 2020, the company introduced Microsoft Cloud for Healthcare. In April 2021, it bought Nuance, a leading provider of artificial intelligence services for healthcare. You can hardly find any more important industries amid the Covid-19 pandemic than cloud computing, AI, and healthcare. It seems that Microsoft is engaged in almost all high-potential industries!

Technical outlook​

Microsoft is moving inside the ascending channel. Now, it’s getting closer to the psychological mark of $270.00. It’s unlikely to break it on the first try as the RSI indicator is approaching the 30.0 level, which signals the stock will be soon overbought. However, if Microsoft surprises investors on June 24, it may skyrocket! Keep updated! Support levels are at the low of June 16 at $255.00 and the 100-day moving average of $245.00.

MICROSOFTDaily.png


Reference: FBS (22.06.2021) Microsoft hit record high
 

SebsCubs

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Gold managed to regain above its key support area mentioned in our previous reports at 1769 USD/Oz, which represents its 61.8% Fibonacci of the recent rally (April – June). On Friday, Gold advanced further nearing 1790 USD/Oz, while the technical indicators has turned slightly higher. This confirms our bullish outlook in the short and medium terms. In the meantime, we prefer to long gold between 1780 and 1770 USD/Oz with a stop at last week’s lows, as revisiting that low would change the major outlook once again. On the upside view, Gold needs to break above 1800 USD/Oz in the coming days, which would be another positive factor in both short and medium terms.

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Reference: FBS (05.07.2021) New Gold Signal. FBS analytic articles.
 

SebsCubs

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What happened?​

China’s tech companies have lost $823 billion in total since their February highs. The losses are huge! What’s the reason? Beijing expands its crackdown on the technology sector and this fact worries investors as the selloff may be far from over.

China’s authorities tighten the rules for the country’s largest companies, especially for those who are listed overseas or looking for selling their stocks abroad. It happened after Didi, China’s Uber, went public in the US. That triggered the sell-off of other China’s tech giants such as Tencent, Alibaba, JD.Com Inc., Baidu, and Meituan.

“The selling will continue in the third quarter. The measures from authorities will keep coming,” said Pegasus Fund Managers.
Most investors are going to take a “sell first, talk later” approach to reduce risks in their portfolio, claimed United First Partners.
“In case the market sentiment goes into extreme pessimism and we see the Hang Seng Tech Index down 20% from here, it could be a rare opportunity to buy some fast-growing Chinese internet companies at extremely attractive prices,” GAM’s Jian Shi claimed.
*We will analyze the Hang Seng Index (HK50), which is available for trading with FBS. If you notice, the quote above tells about the Hang Seng Tech Index, but both the indices are strongly correlated with each other.

Technical outlook​

The HK 50 index has reversed up from the 200-day moving average of 27,600. Why? After a big drop always goes the big rise. Now the index is getting closer to the 23.6% Fibonacci retracement level of 28,335. If it crosses it, the way up to the 38.2% Fibo level of 28,900 will be clear. Support levels are the 200-day moving average of 27,600 and the psychological mark of 27,000.

HK50Daily.png




Reference: FBS (07.07.2021) China's tech selloff. Time to buy the Dips? Fbs analytic news.
 

SebsCubs

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EUR/USD declined for the third session in a row, reaching as low as 1.1780 but managed to close yesterday’s trading above 1.18 support area, while the technical indicators are heavily oversold on most timeframes, especially on the daily chart. So far, our pending orders to short EURUSD remain unchanged, but the pair is trading far below our orders. Since the technical indicators are heavily oversold, it might be wise to risk some long positions from the current area at 1.18, with a tight stop of 1.1750, with a possibility to retest 1.19 in the coming days. This is just a short term play and won’t change our bearish outlook, especially after the pair broke its trendline on the daily chart which began back in March 2020.

Short-term trade idea for EUR/USD​

BUY 1.1800; TP 1.1900; SL 1.1750

EURUSD d1.png




Reference: FBS (08.07.2021) Let's Risk some USD/EUR here. Fbs Analytic news.
 

SebsCubs

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What will happen?​

The much-awaited earnings season is about to start! The first companies that will deliver their financial results for the second quarter will be Goldman Sachs, JPMorgan Chase, and PepsiCo.

Goldman Sachs and JPMorgan Chase are American multinational investment banks. They are going to deliver their Q2 financial results on July 13 at 14:30 and 15:30 GMT+3, respectively. The GS’s forecast is $9.96 earnings per share. The JPM’s forecast is $3.16 earnings per share. Last time, the banks beat the estimates due to the rise in wealth and consumer banking revenues after the Covid-19 crisis. However, this time, the result may be weaker than expected as Wall Street analysts have predicted trading revenue at top US banks slumped by 28%.

If Goldman Sachs reveals better-than-expected EPS, it may break above the psychological mark of $380.00, which will open the doors towards the high of June 4 at $390.00. Support levels are the low of June 8 at $360.00 and the 100-day moving average of $350.00.

JPMorgan is getting closer to the key resistance level at the 50-day moving average of $158.00. If the Q2 earnings are strong, it may jump above $158.00, clearing the way up to the all-time high of $167.00. On the flip side, the drop below the low of July 8 at $150.00 will push the stock down to the next support at $147.00.

PepsiCo, the giant beverage company, will reveal its Q2 earnings on July 13 at 13.00 GMT+3. The market expects the company to deliver earnings of $1.53 per share. Most analysts are optimistic about Pepsi’s earnings. Indeed, the coronavirus-related costs should be reduced due to a successful vaccine rollout in the US, which accounts for roughly 2/3 of total Pepsi’s profits.

If PepsiCo reveals strong financial data, its stock price may jump above the $150.00 psychological mark, which will open the doors to the next round number of $155.00. Support levels are the 50-day moving average of $147.00 and the low of June 24 at $146.00.

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Reference: FBS (12.07.2021) Earnings season starts! FBS analytic news
 

SebsCubs

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USDCAD began the week slightly higher reaching as high as 1.2510 but failed to sustain these gains and dropped back by the end of the US session and closed the day at 1.2440 forming a bearish shooting star on the daily chart. On the other hand, the RSI indictors has broken its up-trend line which confirms the downside retracement move. With that being said, we would like to short USDCAD for a short term play at the current area around 1.2455 with a stop at yesterday’s high at 1.2510 only, with an initial target at 1.24 followed by 1.2360 which could be see in the coming days, especially if the Bank of Canada decided to taper again this week.

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Reference: FBS (13.07.2021) USD/CAD short trade. FBS analytuc news.
 

SebsCubs

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297 0

What will happen?

International Business Machines, a huge IT company, which provides integrated solutions and services worldwide, will announce its earnings results for the first quarter on July 20 at 00.00 MT. Let’s get ready!

How to trade on earnings?​

It’s really easy! Just compare the forecasted earnings with the actual and follow the rule below.

  • If the results are better than expected, IBM will increase its value.
  • Otherwise, if earnings are worse than the forecasts, IBM will fall.
The good news for FBS traders is that they can make both buy and sell trades while trading stocks –the rules are almost the same as for the currency pairs. So, you don’t need to already have an asset to sell it.

What are fundamental factors?

Not great, but with good potential! IBM has issues with its financial position as short-term assets cover neither short-term nor long-term liabilities. Also, IBM’s debt to equity ratio (260,7%) is considered high. Nevertheless, IBM is undervalued based on the cash flows the company is expected to generate in the future.

How has IBM been doing?

It was doing good! Global digitalization is increasing a positive trend for IBM’s earnings. This trend is expected to continue. The company primarily generates revenues from Cloud & Cognitive Software Segment. During the 2nd quarter of 2021 IBM has signed contracts with Verizon offering their Cloud services to run its 5G networks. Also, the company entered 30 new partnerships in the edge computing market segment, such as Intel, Lumen Technologies, NetApp, etc. These facts indicate a possible increase in IBM's financial performance during the 2nd quarter of 2021.

Let’s look at the chart!

On the 4-hour chart, IBM located between 145$ and 137$ lines. 145$ trend line, also, is an interception point of 50 and 100-period moving averages, so it seems to be a very strong resistance level. If IBM would break this resistance the goal would be 152$.

On the other hand, the move down to the 200-period and breaking through it could send IBM price down to 137$ and 132$ support lines.

IBMH4.png




Reference: FBS (14.07.2021) IBM earning report July 20
 

SebsCubs

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297 0

What happened?

It seems that Saudi Arabia and United Arab Emirates are still discussing a potential agreement over OPEC+ policy about cooling oil prices by increasing oil supply.

Oil demand forecast.

After OPEC+ reduced oil production by almost 10 million barrels per day in 2020 to control the supply level during the pandemic, the world economy has started to go through a recovery stage. According to OPEC+ forecast, by Q4 2021, global oil demand will average 99.45 million b/d, compared with 99.98 million b/d in 2019. That is why during the last two weeks OPEC+ has been discussing an increase in oil production. In case this decision is approved, the price correction will be inevitable.

Technical analyses.

On the daily chart, Brent is trading above 50, 100, 200-day moving averages. It has formed a rising wedge with a divergence on the RSI oscillator, which is a bearish pattern. As soon as the price will cross the bottom line of the wedge it might go down to the 73$, 69.50$, 57$ support levels. Until the bottom line of the pattern has not been crossed the main goal is 77$.

XBRUSDDaily.png




Reference: FBS (15.07.2021) How will the Brent OPEC+ decision influence the price? FBS analytic news
 

SebsCubs

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China released GDP: good or bad?

15 July, China released the data about the national gross domestic product. GDP growth in the 2nd quarter of 2021 was 7.9% comparing with the same period of 2020. The growth rate in the 2nd quarter was slower than the 18.3% growth registered in the 1st one. This fact describes how much the Chinese economy had suffered from COVID-19. Rapidly recovered China’s economy basically reaches pre-covid trend.

The growth rate of the world's 2nd largest economy has slowed down. However, it is still on track to reach 6% annual growth. Retail sales in June rose 12.1% year over year, which means that people are still spending money, mostly on restaurants and catering services. At the same time, the production of steel and cement decreased in June from the previous month. The combination of these factors suggests that China’s economy is going to rely more on consumer demand. This fact fueled optimism that China’s economic growth is becoming more balanced.

How about COVID-19?

On Wednesday, the National Health Commission reported that the country has vaccinated at least half of its population at least with one dose as 1.4 billion vaccines have been used. For now, the main goal of China’s anti-Covid-19 campaign is the vaccination of teenagers between 12 and 17 years old by the end of October. As the National Health Commission reports the main goal is to vaccinate at least 70% of the population by the end of the year.

What does it mean for traders?

As China’s economy is 2nd largest in the world it makes a significant impact on the number of assets from the trader’s list. First, the growth of China’s economy has a significant impact on the oil demand in the world.

Second, China is the main export destination for goods from Australia and New Zealand. Chinese economic growth increases the demand for key goods from these countries which leads to an increase in capital flow and respectively forms a tendency for AUD and NZD to appreciate against a basket of currencies. Last but not the least, traders from all over the world use HK50 and Alibaba stocks to invest in China’s economy. Let’s check what is going on with these assets in the next paragraph!

Technical analyses of HK50 and Alibaba stock price.

On the daily HK50 chart, the bullish flag has occurred. The price bounced off the bottom line of the flag and broke through the 200-day moving average. Right now, it is heading towards the top line of the flag, which is 29100. If the price breaks this resistance level the target will be 31000. This is a great opportunity to open a long position! On the flip side, in case the price breaks the support level of 26900, it will aim towards 24900.

ALIBABADaily.png




Reference: FBS (16.07.2021) China: the worst has happened? FBS analytic news.
 

SebsCubs

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Crude Oil dropped sharply last week right from our selling zone mentioned in our weekly video between 75.50 and 76.60, Brent Crude declined to 72.20’s nearing our 72.14 target mentioned in our weekly video as well. Now when OPEC+ drama is over, the trend hasn't necessarily changed. There are two factors that we need to keep in mind, i) Iran's supply is still expected to hit the global market soon ii) Covid19 is spreading again with a new variant affecting vaccinated people. Some countries already took new measures such as a partial lockdown. If this continues, Oil is likely to remain under pressure. In the meantime, it's wise to close some of the short positions and wait for another opportunity, while it is also possible to move the stop to our entry

oil daily.png




Reference: FBS (19.07.2021) OPEC+ drama is over, what about oil? FBS Analytic news.
 

SebsCubs

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297 0

What is happening?

Bitcoin has closed its daily candle under the 50-week moving average for the first time since April 2020. The last time Bitcoin broke through this resistance it fell by 57%. If the situation repeats the price will reach approximately $13000 during this bearish market. Also, it broke through the key support level of $31000, which was holding the price from January the 4th, 2021.

The plunge in bitcoin came after a big sell-off in the global stock market. Traders and investors try to hedge their savings, that is why they prefer the US dollar and Treasuries to risky assets like bitcoin.

What puts bitcoin under pressure?

In May 2021, China banned mining and trading cryptocurrencies. China’s central bank also reminded finance and fintech companies not to offer crypto-related services to customers. China was one of the major countries in cryptocurrencies mining, that is why the situation around bitcoin will remain questionable for a while.

Technical analyses

Short-term trade:

On the daily chart, the falling wedge with a bullish divergence has occurred. If the price breaks the top line of the wedge the target will be $34500, which is approximately the 50-day moving average. If the price does not break this resistance, it will drop to the $23500 level.

Long-term trade:

The 50-week moving average is historically the key sup

port level for bitcoin. If the price does not stick above this line by the end of July 25th, the first long-term target will be $23500.

BTCUSDDaily.png




Reference: FBS (20.07.2021) Bitcoin: Bullish market is over. FBS analytic news.
 

SebsCubs

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EV’s market is going to explode in the 2020s

By the end of 2020, there were 10 million electric cars registered in the world. The number of electric cars registrations increased by 41% in 2020. Electric bus and truck registrations reached global levels of 600,000 and 31,000, respectively.

Three factors supported EV markets during the pandemic:

  • A legislative framework. Many countries accepted regulatory laws about the amount of CO2 emission and zero-emission vehicles.
  • Government protection of EV market additional intensives. Many European countries kept electric purchases stimulation and China continues its subsidy campaign.
  • Battery cost decrease.
Vehicle manufacturers stay optimistic about the electrification of the car industry. 18 out of 20 announced plans for new electric vehicles models. The availability of heavy electric models is also going to grow together with the four main manufacturers pointing towards the electric future of this segment.

Despite the great support from the government’s campaigns for the EV markets during the pandemic, the amount of stimulus governments spend to support this sector decreases year-to-year. This fact points to the increasing consumer demand: producers are now able to survive on their own.

The near-term perspectives are looking great as, during the Q1 of 2021, global electric car sales grew by 140% compared with the same period of 2020.

In the most common scenario, analysts predict global EV markets to reach 145 million models by 2030, which will be 7% of the road vehicle fleet. However, if governments activate their plans to achieve global ecological plans the global EV market might grow up to 230 million units (12% of the road vehicle fleet).

Despite the success of the EV market during the last years, the ecological problem is still far from being solved. Although new technologies in battery and mass manufacture will reduce the costs of EVs, governments will have to cooperate to reach the climate goal by creating and promoting zero-emission EVs.

Global EVs programs

Electric Vehicles Initiative
In 2010 the Electric vehicles Initiative (EVI) was established under the Clean Energy Ministerial (CEM). The main goal of this forum is to understand the main political problems connected with electric mobility and accelerating the adoption of EV’s worldwide. At 2020-2021 15 countries are taking an active part in this organization, these are Canada, Chile, China, Finland, France, Germany, India, Japan, Netherlands, New Zealand, Norway, Poland, Portugal, Sweden, and United Kingdom.
[email protected] Campaign
In 2017 the [email protected] Campaign was launched. The main goal of this campaign is to accelerate EVs deployment all over the world and reach the number of 30% EVs sales in each country member. By 2021 besides 14 countries this campaign is supported by 30 organizations including C40; FIA Foundation; Global Fuel Economy Initiative; Hewlett Foundation; Natural Resources Defence Council; REN21; SLoCaT; The Climate Group; UN Environment Programme; UN-Habitat; World Resources Institute; ZEV Alliance; ChargePoint; Energias de Portugal; Enel X; E.ON; Fortum; Iberdrola; Renault-Nissan-Mitsubishi Alliance; Schneider Electric; TEPCO; Vattenfall and ChargeUp Europe.

Trends in EVs markets

Europe
In 2020, the overall European car market fell by 22%. However, the amount of EVs doubled to 1.4 million overall. Germany registered 395,000 new EVs, France reached the level of 185,000 new units. The UK doubled the number of EVs and reached the level of 176,000 EVs over the country.
China
The overall number of new car registration dropped by 9% during 2020 in China. However, EVs sales grew up to 5.7% comparing with 4.8% in 2019. Subsidies aimed at EV market growth were due to expire by the end of 2020, but the government decided to cut them by 10% and extend them till 2022.
The United States
The overall US car market dropped by 23% in 2020, but the electric one felt stronger. In 2020, 295,000 new EVs were registered. Government stimulus decreased in 2020, as the federal tax credits for Tesla and General Motors reached the limit.

Consumer spending vs government spending

Governments across the world spent USD 14 billion on EVs market stimulus during 2020. This is 25% higher than in the previous year, but the overall tendency declines as the total amount of spending dropped by 10% from 2015.
Consumers, on the contrary, spent USD 14 billion, which is 50% more than they did in 2019. These facts describe the global tendency of rising interest from consumers and a great potential for the EVs market in the future.

Tesla, GM, Ford stocks analyses

Tesla
Tesla became profitable in 2020, for the first time since it was founded. Earnings are forecast to grow by 32% per year. Short and long-term liabilities can be covered by short-term assets. Fundamentally Tesla seems to be a strong company, but the giant P/E ratio makes investors feel scared about the future of the stock price. On the daily chart, the descending triangle has occurred. Moreover, the price “retested” this triangle from the top twice, which means the pattern is strong enough. The closest resistance is $700, which is a strong psychological level. If the price breaks this level, it will fly up to $770 shortly.
GM
General Motors’s earnings grew by 90,6% over the past year. Moreover, earnings are expected to grow by 8.15% per year in the future. GM’s current net profit margins (7.3%) are higher than last year (3.5%).
It looks like GM stock price follows the S&P500 movement since the market crash in March 2020. After the price dropped on Monday, July 19, it shows decent growth. If it breaks the resistance at $58, which is the cross point of 50 and 100-day moving averages, it will have a chance to renew the historical maximum, overwise, it will go down at least to the 200-day moving average at the price range between $51 and $52.
Ford
Company’s earnings are expected to grow 17.3% yearly. Ford stock looks to be undervalued based on the predictions of future cash flows. It has a good PE ratio (13.9x) compared to the US Auto industry average (23.9x), which makes Ford an attractive company for investors.
As well as GM’s, Ford’s price will try to break through the 50-day moving average. In the positive scenario, the price will have a chance to fly up to $16 resistance. On the flip side, it will try to break the 100-day moving average again and go down to the $11.5 price level if it does.
FORDDaily.png


Reference: Electric vehicles: infinite potential. FBS nalytic news
 

SebsCubs

Well-known member
297 0
What will happen?

The European Central Bank will present the monetary policy statement on June 22. It is the primary tool the ECB uses to communicate with investors about its monetary policy. It contains the outcome of the bank’s decision on interest rates and commentary about the economic conditions that influenced it. Most importantly, it discusses the economic outlook and offers clues on the outcome of future decisions. The ECB usually changes the statement slightly at each release. These changes affect the strength of the European currency.

Technical analyses

EUR/USD has formed the descending channel with divergences on RSI and MACD oscillators. This fact gives us the signal that correction is about to happen. If the ECB is less dovish than expected, EUR/USD will break the upper line of the channel and head towards the 100-period moving average, which is approximately 1.183. The next target, in this case, will be 1.188.

On the flip side, the downtrend will continue if traders get another confirmation that the ECB will do more monetary stimulus than the Fed. The price might drop to the support line at 1.175 and even lower at the bottom line of the channel at approximately 1.173.

EURUSDH4.png




Reference: FBS (22.07.2021) How will ECB drive EUR? FBS analytic news.
 
 
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