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Understanding ECB's key interest rates

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How to trade forex economic news events

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Simple but effective risk management technique

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How real interest rates impact gold prices

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Bitcoin is up by 16% post halving

What's happening in bitcoin after the halving? The third bitcoin halving happened on May 11 during the coronavirus chaos. But the king of crypto seems unstoppable. Despite the biggest financial trials of our time, bitcoin was able to climb by 16% since the halving took place. BTCUSD was trading at $8,436 last Monday and started an upturn, briefly touching the $10,000 mark ­- a bullish surge erasing its weekend crash. It is going up past $9,700 as of writing. BTCUSD price swings before and after halving on May 11, PrimeBit WebTrader The halving reduced bitcoin mining rewards in half from 12.5 BTC to 6.25 BTC, decreasing also the daily supply of newly minted bitcoins from 1,800 BTC to 900 BTC. The increased scarcity of bitcoin and the current economic turmoil affecting most risky assets are believed to have contributed to bitcoin's current high volatility. BTCUSD rallied to its $10,000 mark 3 days before the halving. This is doubled the March low of about $4,000. Yet, BTCUSD experienced a huge 17% drop on Sunday (a day before the event) from trading at $9,756 down to $8,105 in only 5 hours due to massive sell-offs. Many anticipated a significant price drop as an aftermath of the halving. This was proven otherwise as bitcoin was steadily going up to $9,500 within 48 hours after the event. The halving was eventless. Bitcoin continues to climb and is trading at $9774 at the time of writing. The price stability of bitcoin after halving excites traders and could lure in more investors mounting for bullish positions. Bitcoin's high volatility offers endless profit potentials for crypto-contract traders.Buy or sell BTCUSD contracts as you predict its price swings. The beauty of it is that you can earn huge from both rising and falling markets. PrimeBit WebTrader is the leading P2P crypto-contracts trading app that lets you trade BTCUSD and other crypto and Tether pairs with fair price marking, low transparent fees, and up to 200x leverage. Take advantage of profit opportunities using leveraged trading, which lets you borrow funds easily to trade in bigger positions. For example, with only $10 traded at 200x leverage, you can open an order worth $2000. Our contracts have no expiry dates and you can earn on fixed value. Trade BTCUSD, ETHUSD, LTCUSD and Tether pairs 24/7 using your computer, tablet, or smartphone. Our affiliate program grants you more rewards of up to 20% of the taker fee paid by your affiliates and another 5% of the taker fee from your affiliates' affiliate. Join us just in time for PrimeBit's Pizza Weekend Promo. On May 22-24, all traders enjoy 20% off the taker fee on all orders. The more you trade, the more you save, the more chances to gain! T&C may apply. Pizza Weekend is our way to celebrate how, 10 years ago, a man from Florida paid 10,000 BTC for two large pizzas - the first-ever recorded BTC payment to buy real-world goods. Bitcoin has gone a long way. At PrimeBit, you can trade BTCUSD contracts and other hot assets anytime anywhere. Discover unlimited profit potentials. It is easy. Just sign up using your email address and start trading!


Airlines on the verge of bankruptcy: Should we sell stocks?

A more in-depth look at airlines stocks A month has hardly passed since the publication of my article about airlines, and the market is already full of rumors about one of the largest airlines approaching bankruptcy. In that post, I tried to give the soft version of the situation; moreover, it was my individual opinion which could be a mistake. However, time shows that things are worse than I expected. Today, I will reveal other aspects of risks in the sector of air transportation and give hints on how to make money on airlines stocks; also, we already have the information about the income of airlines in the first quarter. As I wrote earlier, 10 airlines asked the US government for financial help, thus increasing the debt load. As long as the flow of passengers has dried out, the debts will be extremely hard to pay off. Apart from the debt, the company also needs maintenance, which includes expenses on salaries, the maintenance of airplanes, etc. Before airlines got in trouble, clients used to buy tickets several months before the flight with a good discount. One side spent less on their trips while the other could plan flights more efficiently. What has changed these days? Rumors started creeping in the market about the upcoming bankruptcy of one of the largest airlines. The first person who mentioned this is officially considered to be the director-general of Boeing (NYSE: BA) David L. Calhoun. However, he never mentioned the exact name of the company that may face it. Nonetheless, his statement alone made many investors doubt whether it is wise to invest in stocks nowadays and many passengers - whether they should buy their tickets beforehand. Income from early booking under threat These days, it has already become very tiresome to seek a refund for your ticket. Only two small companies - Allegiant Air (NASDAQ: ALGT) and Spirit Airlines Inc. (NYSE: SAVE) - keep returning money to their passengers if they refuse to fly, however, even some of their clients have complained that they failed to get their money back. Large airlines generally tend not to give the money back - only in case the flight has been canceled by the airline itself. Otherwise, the client gets a voucher for the sum of the ticket that they may use until a certain date. It is quite easy to draw a conclusion from the current situation. In the case of a company's bankruptcy, the clients will not get their money back; hence, the number of pre-booked tickets will keep decreasing, and clients will most likely go to smaller airlines. Of course, some might say that it is safer to fly with large airlines. Normally, this is true. They have newer airplanes, technical maintenance is more modern, however, if they cut down on the expenses, this may touch upon their airplanes as well. Small airlines have more chance to find financing, especially if they get the clients of their larger rivals. Warren Buffett got rid of airlines stocks It turns out that the situation is getting worse or large airlines. There must be something behind the fact that Warren Buffett sold the stocks of all the 4 companies he had bought - with a loss for the fund - regardless of being a long-term investor. Such investors normally enlarge their portfolios but never sell if stocks fall. The only exception is a company being on the verge of bankruptcy. Financial results Now, let us have a look at the companies that have increased their debts and those that are still generating a net profit. The first quarter is over, so we can have a look at the financial results of the companies. We will analyze the 4 largest air carriers that control 80% of the US market, starting with the smallest one - Southwest Airlines (NYSE: LUV).      Southwest Airlines Co. Southwest Airlines finished the first quarter with a loss of 9 million USD - while in the preceding quarter it made a profit of 513 million USD. Its debts have grown to 17.81 billion USD, and its assets amount to 26 billion USD. It turns out that the company's debt has reached 65% of its assets. The situation is not critical, so the bankruptcy of Southwest Airlines is unlikely.      United Airlines Holdings, Inc. United Airlines Holdings, Inc. (NASDAQ: UAL) finished the first quarter of 2020 with a net loss of 1.7 billion USD, while in the previous quarter its profit reached 641 million USD. Its debts grew to record 43.63 billion USD. Last time they were so huge after September 11th - the company then went bankrupt and merged with Continental Airlines.      Delta Air Lines, Inc. Regardless of the decision of Delta Air Lines (NYSE: DAL) to use passenger airplanes for cargo transportation, the company failed to remain profitable in the first quarter of 2020. Its net loss reached 534 million USD, while its debt reached 54 billion USD. This is the largest debt in the company's history. Meanwhile, the company's assets amount to only 68.7 billion USD, hence its debt makes 80% of its assets.      American Airlines Group, Inc. The most losing company turned out to be American Airlines Group (NASDAQ: AAL). It finished the first quarter with a loss of 2.24 billion USD, while in the previous quarter its profit amounted to 414 million USD. The company's current debt is 61 billion USD, which are, happily, not the highest values. However, the worst thing is that the debt has already exceeded the assets of the company which amount to 58 billion USD. Hence, American Airlines is the first candidate for bankruptcy. What do traders think? As you see, no company has managed to remain profitable in the current situation, which is not surprising. There is evidence that the flow of passengers has decreased by 97%. Clearly, air carriers cannot generate profit. Anyway, let us have a look at what traders think and which stocks they are selling, counting on the company's bankruptcy. For this, we need to have a look at the Short Float value; I will show you the data on the diagram. From the diagram, we may conclude that they have put their stake on American Airlines. Traders are in short positions on more than 19% of its stocks. Airlines stock price technical analysis Now, it is time for the technical analysis of the companies.      Southwest Airlines On the chart, there is a Triangle and its lower border is already broken, which means that the price will start declining. After September 11th, the stocks declined below 10.00 USD. The crisis of 2009 drew the price to 4.50 USD. As long as the terror act of September 11th affected specifically airlines, we will consider 10.00 the aim of the decrease. However, we must account for the financial results of the company. Out of the four air carriers mentioned above, this one is the smallest, and its financial results are much better than those of the others. Hence, if the level of 29.00 USD is broken away, this may even signal growth. The company may also merge with another one. Thus, it is too risky to put your stakes on the decline here.      United Airlines Holdings, Inc. The situation with the stocks of United Airlines is identical. The price of the stocks has already broken the lower border of a Triangle. This airline failed to survive in 2001, so we will take the level of 2008 as a landmark - after that crisis, the stocks fell to 2.70 USD.      Delta Air Lines, Inc. The chart of Delta Air Lines stocks does not differ a lot from the charts of other airlines. There is also a Triangle with the lower border broken, which signals a further decline of the price. After September 11th, the company did not escape bankruptcy, its stocks cost nothing, and it reappeared in the exchange in 2007. After the crisis of 2008, the stock price fell to 3 USD. So, in the current situation, the worst level will be 3 USD.      American Airlines Group, Inc. Out of the 4 companies, the stocks of American Airlines Group are the cheapest. This is no surprise as it has the largest debt and losses. The company had hard times after September 11th and failed to survive in 2008, going bankrupt and merging with US Airways. The previous stocks of the company went invalid while the new ones started trading at NASDAQ under the ticker AAL. The chart of the stocks allows having a look at the prices before the bankruptcy and thus find the possible low to which the stock may decline. This is the level of 2 USD per stock. Summary Extremely low stock prices always attract investors. However, there are two reasons for the stock price to be low. The first reason is the company being underpriced by investors. The second reason is the company becoming losing so that investors want to get rid of the stocks. In our case, the prices are low due to the financial state of the companies deteriorating. Risks are huge. Out of the 4 airlines, only Southwest Airlines managed to live through the crises of 2001 and 2008 without going bankrupt, and even now it looks stronger than its rivals. So, if you do think about investing in an air carries, choose this company. However, keep in mind that as soon as one company announces bankruptcy, investors will be scared and start selling the stocks of other companies, which will draw the prices deeper down. This is the moment when the stocks may become underpriced; however, I will say it once again - the risk is extremely high. The simplest decision will be speculation on stocks: open short position for several days, then lock in profit. American Airlines Group looks the weakest company among the rivals, so it is highly probable that the stock price will go on falling and the company goes bankrupt. So, you may count on this events and trade accordingly. This is going to be an optimal decision - or choose another sector for investments. By Dmitriy Gurkovskiy, financial expert and author at RoboForex Blog DisclaimerAny predictions contained herein are based on the authors' particular opinion. This analysis shall not be treated as trading advice. RoboForex shall not be held liable for the results of the trades arising from relying upon trading recommendations and reviews contained herein. See here for global coronavirus case data


S&P back to the future

A look at what's in store for the S&P Limitation The stock market behaves pretty strangely. That's normal for a human being when any kind of crisis happens, but for us, traders, this general acknowledgment is not enough to build our strategy upon. We intend to look into the future - to lift the shroud of mystery. With the limitations of cognition, corruption of information, and an ever-changing environment producing new data inputs, there is little more than what humans normally do to predict the future - look into the past. Such an approach cannot be applied blindly, of course, and sometimes may even mislead an imprudent examiner, but at times gives valuable insight into what the future may hold. Let's do the same with the S&P which recently made one of the strongest advancements since its epic rise from the ashes in March. Observation We are seeing the S&P tip at 2,940. The question is: this is another peak of a sideways cascade between 2,775 and 2,965, or it's a precursor to a bigger drop? It may be none of that: very possibly, it is just a short stop before a new upward move. The latter, though, seems too optimistic as even the MACD suggests that the current level is at least a local high. Therefore, the most well-balanced question will probably be: will the S&P bounce upward to rise further or it will drop deeper? Maybe, much deeper... Let's rewind a year ago and look at the last summer. There was a similar picture of recovery after a drop. S&P started with large leaps upwards and continued the trajectory with a milder curve pulled tighter to the horizon. In the end - it made a big drop erasing almost of its gains. Quite importantly, note that the chart of the S&P was in a similar configuration with the MACD: the former was rising, gradually slowing down the upward velocity, the latter was slowly going down in waves. Expectation As we mentioned, the coming drop is very likely. This likelihood - although not a certainty - puts us in a comfortable position to consider whether this drop will be just tactical or strategic. To make this judgment, let time align all the indications, among which the first one will be the behavior of the S&P against the support of 2,775. Let's watch it and come back together to re-group for new observations and conclusions. This post is written and submitted by FBS Markets for informational purposes only. In no way shall it be interpreted or construed to create any warranties of any kind, including an offer to buy or sell any currencies or other instruments.  The views and ideas shared in this article are deemed reliable and based on the most up-to-date and trustworthy sources. However, the company does not take any responsibility for accuracy and completeness of the information, and the views expressed in the article may be subject to change without prior notice. See here for global coronavirus case data


Which fundamental factors to look at each week?

Weekly analysis Looking to conduct fundamental analysis on the weekend?  Checkout to learn more. See here for global coronavirus case data

BASICS Wed 20 May

Crude oil inventories biggest focus for USDCAD today

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There are times when moving average technicals don't say much to me...

The USDCHF is not saying much to me at the moment, but I will talk about it anyway.... Most times, I can make some logical sense from the picture of a chart.  It's no secret, the 100 and 200 bar MAs are important in my analysis. They tell me a story every day. Why?   Because traders ALL over the world are looking at the same picture and the same (similar) moving averages (MAs). Trading decisions can be made that focus on defining risk. Technical's - like MAs - provide a basis for defining risk.  That creates levels that tend to solicit a reaction either up or down.   You will see me write...."Stay above more bullish. Move below more bearish."   That is what technicals do for me.  The "borderline" - where it is bullish above and bearish below (like the borderline of a state or country) - tells me if I am in New York or in New Jersey, in Spain or Portugal, in Italy or Switzerland.   The fundamental story influence price action, but that story does not define risk.  Where is the risk defined from a fundamental story? When a new fundamental story tells a different story?  When the story is debunked?  When gold does this, the stock market does that, or oil does something else? Typically, the fundamental story is cahoots with the technicals.  If the price moves higher, the story can often be written to support the move. Sometimes the FX guy is writing about gold. The gold guy is writing about FX. The bond guy is writing about FX and gold. The stock guy is writing about bonds and FX.   Anyway, there are times when I look at a chart and I don't see much. In fact I see "a market" (note in quotations) that is ignoring technicals, like my beloved 100 and 200 bar MAs.   Is that ok?  Does misbehaving price action debunk technicals as black magic, some sort of voodoo, or simple craziness?   No..... The "market" (again in quotations) determines the price action.  The "market" is ALL the global traders who move the price up or down in an organized, efficient auction process.  If the fundamentals are bullish, for the EURUSD, they push the price higher and the technicals - like the MAs -  support that move (i.e the price moves above a moving average or stays above a trend line). If the fundamentals are more bearish, the price moves lower and the technicals support that move (i.e. a trend line or moving average is broken to the downside). Therefore, if the price action does not tell me much. If the technicals, which should give a picture of more buyers or more sellers, is not saying bullish or bearish or if it switches back and forth between bullish and bearish (i.e. stands on the borderline of NY and New Jersey in the middle of the Lincoln Tunnel and hops from one side to the other), it is not a fault of the technicals, but instead the fault of the "market" or collection of traders around the world.  They simple don't know what to do. Looking at the USDCHF hourly chart below, may have some traders saying "All this BS about 100 and 200 hour MA is voodoo, black magic".   Clearly the last three days in particular have seen multiple breaks above and breaks below and breaks above and breaks below (see red shaded area).  There have been quick runs higher and quick runs lower.   It is crazy as standing in the middle of the Lincoln Tunnel under the Hudson River with a borderline saying NY on one side and NJ on the other side. and hopping back and forth.    And like the guy in the middle of tunnel, not knowing where he is going, the "market" is saying the same thing.   That is, "I don't know where I am going". That is frustrating. That can cause getting whipped around as a trader.   However, it should also prompt you to think "I should not be sitting in the middle of the Lincoln Tunnel. I need to disappear" (not go to NY or NJ).  In trading lingo, it means "Don't trade that instrument, UNTIL "the market" shows that it has a direction". Or perhaps.... look for a different borderline that seems to be working. The good news is "the market" may not know now what it wants to do, but at some point it will figure it out.  The fundamental story might be risk on or risk off, or the SNB might do this or the Fed do that. However, when that happens, the price will show it. The price will reflect that "new revelation" and move/trend higher or lower.  If the price stayed at the same place all the time, traders will simply not waste their time.  Thank God, we have a propensity to trade and it is more fun when the price moves somewhere (into NY or into NJ). Markets transition from non-trend to trend at some point.   So how do you know when it is ready to move? You really don't, but if you believe that non -trend will ultimate lead to a trend. it might pay to stick low risk "toe in the water" with an open mind that the "market" might agree.  Typically, that is not near the MAs (which are in the middle of the up and down range), but may stem from a break of the MA and say another hurdle.  Also, it might pay to be patient for an extreme and put a toe in the water there. Looking at the hourly chart above, the 100 and 200 hour MAs have the price action chopping above and below.  UGLY.   However, the two highs today came in at 0.97277.   I like that level better even though it is close to the MAs.  On the downside, the low today was right at the low from Friday. HMMMM. Traders who sold near the earlier high for the day, probably had a stop above the level. They stuck a toe in the water.   Traders who bought near the Friday low, probably had a stop below the level. They stuck a toe in the water.   The MAs ? They can give hope but don't trust them to be the spot to look to trade.  If you stick a toe in the water at an extreme technical level (yes they are still technical levels) and it goes your way, you have hope that the price next trends. However, it still has to get out of the quagmire that has defined the price action.  That is "the market" has to decide it is time to break and move away.  That requires targeting all the levels needed to "get to, and through". If done, you will be able to get out of the quagmire and enjoy some open road ahead for a change (get out of the tunnel and head down Broadway if in NY, or if in NJ, ride on the New Jersey Turnpike toward the suburbs).  Conversely, if the new extreme where you stuck your toe in the water does not work, get out and disappear.  Like a fellow trader in my distant path used to remind me, "Instead of trading, why don't you lie down until the feeling goes away" Sometimes it requires a nap until "the market" has a better idea (and conviction).  See here for global coronavirus case data


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