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USDCHF Long Trade- Trading The Fundamentals With The TechnicalsIf you understood the fundamentals you would've bought the USDCHF after the fall on Friday, why? Because while we had beautiful technicals for the the sell going down we also had the passage of the US tax bill which if you understood the fundamentals you know would result in a rally in the USD. So many traders lost all their profit from the fall because they were unaware of the fundamentals, don't be unaware learn to trade both. Now one of the first steps to trading fundamental analysis is understanding the cause of the most recent price move , now in this case the move down was cause by political news. News that Flynn was prepared to testify against President Trump, this pushed the dollar lower and presented a great opportunity to buy the dollar at a lower price. Political news normally only create short term market sentiment as the market is mostly focused on economic news that indicate an increase in production or an increase in inflation. Therefore a trader that understands both the technical and fundamental and knew that we have the US tax bill that would be passed shortly would be looking to buy the dollar at a good price. From the chart you can see that we have prices falling into the support zone and we have the completion of an AB=CD near the backside of the trend line. You could also draw your fibs and add indicators for more convergence. This is an example of trading the fundamentals with the technicals and although there is a lot more to trading fundamenatal analysis this is a good example.
by Forexmentor
Senate&House tax bill clash pushes dollar lowerThe US Senate released its soft version of tax-cut plan on Thursday featured with two stages of implementation. In particular, firms may need to wait for tax breaks till 2019 what leaves a little from anticipated stimulus boost, though less risky for government budget. The budget committee has already approved a reform option and next week the House of Representatives will vote, which is expected to point out the Senate's unjustified caution. The development of reform can lock into a cycle where the initiatives of the Upper and Lower Chambers will be reviewed several times until they work out common decision. The more differences between the reform options, the longer markets will be kept in suspense. Investors in the fixed income market seem to expect a more aggressive version of the reform as they hastened to sell bonds after Senate update. Yield of 10-year US sovereign debt jumped from 2,320% to 2,372% on Thursday and keeps rising on Friday. The US dollar holds moderate declines, preferring to save optimism for the next week. This week turned out to be the most unsuccessful for US currency during the last month as investors were disappointed with the news about a potential delay in tax breaks for firms. It is noteworthy that both bills will cost the government $1.5 trillion for 10 years, so in terms of the amount of expenditures they are identical and can not cause any discord. Also, both plans want to tax $ 2.6 trillion of US profits abroad, with the Senate offering a tax rate of 12% for cash and liquid assets, and the House of Representatives - 14%. From this point of view, the version of Senate look more attractive. Morgan Stanley called the slip of tax plan as the main reason for increasing short positions on Dollar, as against the backdrop of a global recovery the US economy needs to warrant faster growth outlook to remain attractive to investors. If this is not shown, the outflow of capital will begin in search of greater yield in foreign markets. The uncertainty that will drag on next week will probably take the dollar even lower, before it can move into growth. Medium-term dollar selloff look quite reasonable given the current development of the tax reform situation. Arthur Idiatulin
Short
by Tickmill
Senate tax-cut bill may delay corporate tax breaksThe ECB is ready to postpone the introduction of more stringent rules on bad debts after European Parliament and Italy took swipe on the project, one of ECB governors said on Thursday. The regulator is seemingly prevented to take security measures against the background of a gradual stimulus downgrade as the regions are still heavily dependent on cheap cash and soft credit conditions are simply necessary for them. The banking sector of the European Union rose, euro gained 0.15% against the dollar, keeping the defense at 1.16. Sterling has been spending a lot of time in the red zone despite the recent interest rate increase by the Bank of England. Obviously, that sunk into discord Brexit talks significantly undermine the prospects of British economy, which is also reflected in the national currency. Internal contradictions in May’s conservative party are also dissuading markets about the ability to conclude a trade deal with the EU. The rebound from level 1.30 has been traded out from last week, so in case of further weakening the pair has all chances to go below the key level of 1.30. The dollar continued its retreat on Thursday, as investors are waiting for a version of the Senate tax bill that may differ significantly from the version of the House of Representatives controlled by Republicans. For Democrats, this way of opposing the reform remains the only one and judging by the reaction of markets causes considerable concerns. Recall that Trump's tax plan is the largest episode of fiscal stimulus in the past almost 40 years (since Reaganomics). Regarding the economic reports for today consumer inflation in China rose to 1.9% with the forecast of 1.8%, which dragged oil prices in positive territory on the prospects of demand of the world's largest consumer of oil. Commodity markets met this news with joy. Mortgage loans in the Australian economy declined easing concerns about the real estate bubble, Germany's trade surplus once again exceeds the forecast, indicating that the economy has gained enough height and fare well without support of the Central Bank. Unemployment benefits in the US due later today will help to assess the dynamics of the labor market, as well as the state of the economy in the fourth quarter. Arthur Idiatulin
Short
by Tickmill