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I regularly trade on EUR/USD so I have decided to analyse fundamental factors for the growth of EUR last year. As this year, from the last three months EUR/USD trending sideways so my attempts is to find out which side it may break.
I have deliberately mentioned speculation in the title of my article, as in 2017 on many occasion there were several discussions about the topic that, European Central Bank may end quantitative easing programme as scheduled in December 2017. When I look back in history, Eur's downfall started in 2008 as Eurozone and world witnessed a recession. Falling growth, rising unemployment rate, falling inflation so ECB started Quantitative Easing means a bond buying programme in 2015, to raise money supply in the system and lowered interest rates to negative. Rising money supply makes loan cheaper and so tends businesses and people to spend more on various fronts. Like investments in business expansion may grow up which in turn leads to rising employment and economic growth.
Disclaimer : Made by me from data source on ECB website.
Last year we have witnessed a low of 1.034 in EUR/USD and from there it has grown almost 2000 pips and this year…
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Zodiak avatar
Zodiak 25 Apr.

good work

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drferre avatar
drferre 25 Apr.

Good job

Annyrio avatar
Annyrio 26 Apr.

very good!

Maxim3 avatar
Maxim3 30 Apr.

very well!

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Hello Friends
Above images gives history of EUR and its adoption as a common currency of Euro zone.
We all know these days market participants are looking at the meeting of European Central Bank ( ECB) which will be held on 26 October 2017 to get some clue on the prospects of Quatitative Easing Programme ( QE) which is suppose to end at the end of the year 2017. We all are looking what will be effect on EUR if ECB ends QE in December 2017 and what if they don't end it. So friends lets have a look at nitty-gritty of Quantitative Easing Programme of European Central Bank.
It is a bond and asset purchase programme of Central Bank of a region or Country to boost inflation to desired level. In context of Euro region European Central Bank buys Bonds from regional Banks, this increases the price of these bonds and creates money in the system, as money rises in the system it results into cheaper loans and interest rate falls, this helps to business and peoples to borrow more and spend less on their debt, as a result of this consumption and investment rises which in result creates more jobs and supports economic growth.
European Ce…
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FXRabbit avatar
FXRabbit 30 Oct.

An excellent article! Well written as well my friend!

Yulia10 avatar
Yulia10 30 Oct.

nice article

mtakira avatar
mtakira 31 Oct.


Eco avatar
Eco 23 Nov.

Всё очень странно. Мы проводим безнальную эмиссию, и типа количество бумажных денег не увеличивается. Снижаем процентную ставку, что способствует большему объёмы выданных кредитов - но как бы денежная масса не увеличивается.))

Anechka2017 avatar

супер статья

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Central Banks are clustering negative interest rates as a new fashionable monetary policy tool. After Sweden, Switzerland and Denmark, the new fellows are the Bank of Japan and the European Central Bank.
The ECB has cut a key rate further into negative territory in March 2016. It now charges banks 0,4% to hold their cash overnight. Draghi said that the central bank’s stimulus measures are intended to last until March 2017 or longer if necessary.
The Bank of Japan has also adopted the negative interest rates strategy. It is now charging banks 0,1% for parking additional reserves, with the aim to encourage lending and prompt businesses and savers to invest.
It seems that central banks are all seeking a weaker exchange rate without weighing the risk of an open currency war, losing their ability to boost prices and competitiveness through currency devaluation.
Negative interest rates reduces the cost of borrowing and perhaps should spike demand for loans. Jana Randow and Simon Kennedy [1] noticed:
that when banks absorb the cost themselves, it squeezes the profit margin between their lending and deposit rates,
and might make them even less willing to lend. (...) negative rates haven’t spa
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zarina avatar
zarina 16 Apr.

good work!!! Thank you

black_box_xx avatar

great! thank you for your article :)

Kivetat avatar
Kivetat 19 Apr.

Good job))

rajib217 avatar
rajib217 23 Apr.

Great article

TaniaS avatar
TaniaS 5 May

Very interesting!

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In this article USDJPY will be analyzed both fundamentally and technically and as known nothing is impossible in Forex so different scenarios will be drawn to express about the most probable scenarios with the USDJPY.
What is affected the move of USD/JPY nowadays:
Fundamental analysis:
USD/JPY is affected now by two different policies by both Bank of Japan (BOJ) and United States Federal Reserve (FED) and also affected strongly by BOJ quantitative easing which strongly hit Japanese Yen, finally Yen and other currencies is affected due to strong growth in US in the last months which make US$ to be favored.
Different policies by BOJ and FED:
In last Octeber,2014 BOJ Bank of Japan to inject 80 trillion yen into its economy “In a week when In a week when the US Federal Reserve announced it was calling time on bond buying program, the Bank of Japan moved in the opposite direction by increasing stimulus through an expansion of its quantitative easing (QE) program” (Source: theguardian).
In different, US FED is ready to raise interest rate for the first time from years, FED delayed its first rate hike more than once in order to prevent broad US$ gains which may dampen …
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9jakas avatar
9jakas 23 Sep.

Useful article.

Olga18375 avatar
Olga18375 23 Sep.

Yes. Useful!

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I didn’t expect to be writing this article so soon. The idea first came up after the Bank of Japan unexpectedly eased monetary policy on October 31st The BOJ increased its bond buying program from 70 to 80 trillion and tripled its ETF purchases from 1 to 3 trillion yen. The surprise move lead to a 292 pips rally in the USD/JPY and on October 31st the currency closed off the week at 112.32. In the next month the Yen continued to be sold aggressively and last Thursday the Dollar/Yen spiked at a high of 118.97. But let’s start from the beginning.
The Rise of Abenomics
The latest round of easing is a continuation of a BOJ policy started back in 2012. After coming to power in December of 2012, the current prime minister of Japan, Shinzo Abe, started to implement a set of policies termed ‘’Abenomics’’. The aggressive policy changes involve radical quantitative easing, increase of public investment and structural reforms. Abe appointed Haruhiko Kuroda as head of the Bank of Japan with a mandate to generate 2 percent inflation. The inflation goal lead to the bank embarking on a massive buying spree during which the BOJ balance sheet almost doubled.
What’s Behind the Japanese Obsessio
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Convallium avatar
Convallium 30 Nov.

wonderful job!

fxigor avatar
fxigor 17 Dec.

I agree with this article.My aproach to forex market is technical but I agree that There Will be No Japanese Bailout.

fxsurprise8 avatar

fxigor glad you agree with me :)

Durden avatar
Durden 26 Jan.

Good job

driven avatar
driven 3 May

Extremely well-written article. I think your long-term assessment is probably true, but there is always danger in making short-term predictions.

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The EURUSD has been in an uptrend since July 2012. Recent monetary policy changes have triggered a sell off in the pair creating speculation that the uptrend has concluded, The reversal in progress, has the capacity to take the pair much lower, this article will shed some light on the catalyst required to drive the trend change, as well as a trade plan.
Fundamental Outlook
Disinflation remains a concern for the Eurozone. HICP is the measure of inflation used by the ECB. The most recent reading came in at 0.5%, while targets are to be as close to 2% without going over.
Figure 1.1 - HICP on steady decline after a high of 3% posted on September 2011
The ECB has several different tools for battling disinflation. In April, an attempt at verbal intervention was made. See my blog post from April 12 - Possible EURO sell off at Open for details. The results was a 20 pip gap down, followed up with a 2 day sell off taking the pair 90 pips lower. The method proved to be ineffective as buyers stepped in and did not allow the pair to close lower.
The ECB Press conference on May 8, however had a major impact when Draghi indicated a clear time frame for when action would be taken.
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FXdream avatar
FXdream 16 July

nice work

sonjatrader avatar

Very interesting!!! Thanks

khalidamassi avatar

Good work.

sukeshroy avatar
sukeshroy 21 July

Very good article for finding combination of profitable orders using fundamental and technical analysis both.

Jignesh avatar
Jignesh 23 July

UPDATE - The trade idea is invalidated at this point with the daily close below 3500.  There is still a possibility of an irregular expanded flat, and I do like the setup with revised targets of 1.3750, but at this point the trade carries much less conviction.  it's worth keeping an eye on USDCHF for direction at this point to see if it breaks the high

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In the near future, perhaps we will see the nice big face of Angela Merkel in the 1 euro coin?

In this article, which is composed of 4 parts, I want to focus on what the EBC could do in the coming months to try to get out of the crisis which is stagnant in europe.
Mario Draghi spoke last conference of non-conventional measures, implying that the ECB would take into consideration the QE.
We see in this first part, what is QE?
Stripped of jargon sophisticated (and mystifying), the QE (quantitative Easing, QE) simply means increasing the quantity of money supply, or easing credit conditions in the hope of stimulating the economy stagnant. It is usually performed by injection by the central banks of a certain amount of money into the coffers of commercial banks in exchange for its financial assets, which consist largely of government bonds. Although typically is done electronically or on paper, its practical effect is identical to that which is obtained by printing money.
This would be an expansionary monetary policy designed to aid economic recovery. The rationale behind this policy is that the addition of new funds to t
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FUNDAMENTAL MOVEMENT , RULES SHORT VIEV As i see many traders have a little troubled too read when forex market does not move according to purely technical rules , when is fundamental movement activated. So i decided to bring this fundamental principles , and will try to shed light on the time and period that can be expected. Briefly and succinctly as possible clearly show these issues using simple words too evryone , even beginner would be able catch point . Fundamental rules give us - they say , are designed - such a way that the value of money is closley correlated with supply and demand of the currency - a simple an explanation saying value of money fall when we have it a lot on market economy and they not are invested , in inverse proportion when little or not enough on market . For example when market of country has large amounts free money or extra pumped (print-QE)value of this currency will fall and thing will be analogous to inflation , vice versa when money a little available in market and know they invested - value should be grow up.Based on example of last period , reprint us dolars - we hear form many sides call them cheap cash , loses its value through cos not genera…
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Likerty avatar
Likerty 6 Nov.

In my opinion fundamentals are ust too complex for everage folk to understand - it is a bit simplier with techs as these come in exact numbers..

SpecialFX avatar

I think one of the reasons most retail traders do not care about fundamentals is because they focus on very short term trading, where fundamentals are mostly irrelevant. But it is always good to know the inner workings of the market (and fundamentals are what ultimately move the markets, no matter what the technical indicators or patterns indicate), so even if people do not open trades based on fundamentals, they should still pay some attention to them :)

doctortyby avatar
doctortyby 26 Nov.

Fundamentals combined from US and Eurozone show the main possible market movers in the near future : US Fiscal Cliff, Greece Bailout, possible Spain Bailout request, eurozone Budget.

WallStreetBlog avatar

good article!!!

xtrader360 avatar
xtrader360 16 July

good article

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  INTRODUCTIONWith my previous article I introduced a study about the policy done in last years by central banks: the purpose was to analyze the impact into stock markets (since correlated with forex) to better understand the current situation and possible developments in the coming days/weeks. With this article I will show my study about U.S. monetary policy, the impact occurred in some world markets, and my attempt to understand whether this policy has produced the desired effect or not. QUANTITATIVE EASINGAs previously underlined, QE is an unconventional monetary policy used by central banks to stimulate the national economy when conventional policy has become ineffective. When I read this sentence for the first time, I thought that in any other circumstance in which this type of expression is used, it simply means that the situation is far more serious than you think, and normally any kind of extreme solution will cause serious damage in some other macro/micro systems directly or indirectly connected.In our contemporary history, this type of policy has been introduced (and widely used) by the American central bank (FED) with a 2 trillion dollars (12 zeros) of new money created…
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scramble avatar
scramble 22 Aug.

yes i said about other conditions. anyway whole commodities have the same charts. almost a copy n paste. can't be only weather ;)

SpecialFX avatar
SpecialFX 26 Aug.

QE increases money supply, but if you have more money chasing the same amount of goods then the price of those goods will go higher (or at least not go as low as they should without QE). Producing goods and services is what creates wealth, not printing money. If everyone was given 1 million euros we would all be poor, because hyperinflation would make those euros worthless and we would have a huge recession :)

scramble avatar
scramble 31 Aug.

hello, sorry didn't notice your comment here! yes wh

scramble avatar
scramble 31 Aug.

unable to post comments.

fxigor avatar
fxigor 26 Oct.

Nice article about QE and correlations.I wrote article about it and I use correlations in my statistical arbitrage trading strategy. Correlations between the USD and 6 major world currencies in last several years went down. Do you use correlations in your own trading strategy? Thank you.

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 INTRODUCTION We are required (as traders) to make a lot of research, study, analysis, test new strategies or improve our favorite ones. But the most important thing required is the ability to make the correct correlations between fundamental changes, technical study, and our perception about prices. This explain in few words why trading is not simple! QUANTITATIVE EASINGIt's an unconventional monetary policy used by central banks to stimulate the national economy when conventional monetary policy has become ineffective. A central bank buys financial assets to inject a pre-determined quantity of money into the economy. A simple explanation of what happens with a QE is found in BOE's website where in a quick 'cartoon' they explain the meaning about this important topic.Main QE program was introduced by the Federal Reserve in November 2008 after market's heavy crash in previous months. I decided to study the evolution of markets since that date, because there are some interesting facts happening. DOW JONES INDUSTRIAL AVERAGE (DJIA)Founded in 1896, this stock market index shows how 30 U.S. large publicly owned companies have traded during a standard session. The index is composed for …
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SpecialFX avatar
SpecialFX 19 Aug.

Stocks are correlated with AUD because they are both "risk-on" investments, same as with other typical high interest rate currencies NZD, MXN, ZAR, PLN, RUB... When the sentiment is negative investors look for safe-havens, so stocks and riskier currencies usually go down, CHF and JPY go up, German and American bonds go up as well. There are basically 2 types of instruments: risk-on and risk-off, and within each group the instruments are more or less positively correlated with each other, and negatively correlated with the other group. Correlations can and do change though :)

Myprox4x avatar
Myprox4x 20 Aug.

best article, I know you will and always rocks ...good luck +1

scramble avatar
scramble 20 Aug.

@specialfx: yes that's the correlation about aud and stock! :)

scramble avatar
scramble 20 Aug.

@my prox4x: thanks for nice words n supporting :)

scramble avatar
scramble 30 Aug.

just an update about DJ30IA: price found reject near previous top 13300 and back under 13000 while writing this comment. UsdX bullish behavior, while AUD USD going down together with DJIA leading the move together with EU and GU. Quite a bearish scenario just behind the corner. Will be very interesting to see if the FED will react soon after seeing pressure increasing....

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The Office for National Statistics produces two main measures of consumer price
inflation: the Consumer Prices Index (CPI) and the Retail Prices Index (RPI).
The RPI was introduced in 1947 and was made
official in 1956. The CPI was introduced in 1996 as the Harmonized Index of
Consumer Prices (HICP).
In May 1997, the new government handed control
over interest rates to the politically-independent Bank of England Monetary Policy Committee (MPC). In few
words, the committee is given the responsibility of adjusting interest rates in
order to meet the inflation target set by the Chancellor. (related article here)
In December 2003 the National Statistician
decided that the UK version of the HICP would be renamed the Consumer Prices Index (CPI) and the UK
inflation target would in future be based on the HICP, replacing the Retail Prices Index excluding mortgage
interest payments (RPIX).
The difference between the RPI(X) and the CPI
is a bit complex and out of the topic
of this article, where I will consider the CPI as the most important data,
since it is the BOE’s inflation target and also for length purposes.
Actually the CPI tracks th…
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scramble avatar
scramble 10 July

@jose: yes that's what i'm doing! since i have a huge lack in fundamental study, i will go deep and deep in all main aspects, showing main things after i understood them. this will certainly improve my perception in markets. prize or not ;-)

AdrianWS avatar
AdrianWS 11 July

Very nice article once again, keep up the great work :)

Ficlubi avatar
Ficlubi 18 July

Nice work! It helps me to understand a bit more the factor behind GBP. It will definitely helps my trading in gbp/jpy which so far need more improvement.

shaukat113 avatar
shaukat113 20 July

yet another good article from a trader how know the art of trading

projectx44 avatar

Great article!Forex Community is looking forward to reading your next article about trading...

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