<p>Headlines:</p><ul><li><a target=“_blank“ href=“https://www.forexlive.com/news/icymi-the-agenda-for-the-jackson-hole-symposium-20220826/“>ICYMI: The agenda for the Jackson Hole symposium</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/dollar-holds-steadier-so-far-awaiting-powell-20220826/“>Dollar holds steadier so far, awaiting Powell</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/looking-past-powell-what-should-markets-look-out-for-next-20220826/“>Looking past Powell, what should markets look out for next?</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/british-energy-regulator-ofgem-lifts-gas-electricity-price-cap-by-80-to-3549-20220826/“>British energy regulator Ofgem lifts gas, electricity price cap by 80% to £3,549</a></li><li><a target=“_blank“ href=“https://www.forexlive.com/news/germany-september-gfk-consumer-sentiment-365-vs-318-expected-20220826/“>Germany September GfK consumer sentiment -36.5 vs -31.8 expected</a></li></ul><p>Markets:</p><ul><li>EUR leads, NZD lags on the day</li><li>European equities lower; S&P 500 futures down 0.3%</li><li>US 10-year yields up 4.7 bps to 3.071%</li><li>Gold down 0.8% to $1,743.62</li><li>WTI crude up 1.1% to $93.16</li><li>Bitcoin down 2.1% to $21,185</li></ul><p style=““ class=“text-align-justify“>Markets are caught in no man’s land at the moment, as all eyes are on Fed chair Powell’s speech at Jackson Hole later in the day.</p><p style=““ class=“text-align-justify“>The dollar was steadier early on but is now trading more mixed with EUR/USD weaving in and around parity but is now up just 0.1% to 0.9987 on the day. USD/JPY is keeping a steady advance as bond yields creep a little higher, with the pair now sticking closer to 137.00 from around 136.80 earlier in the day.</p><p style=““ class=“text-align-justify“>Elsewhere, the pound took a slight knock to 1.1775 against the dollar after British energy regulator Ofgem said that it would lift its energy price cap by a whopping 80% to £3,549 and warning of more increases in the months ahead. Still, with the focus on Powell, cable bounced back to settle down 0.1% around 1.1815 at the moment.</p><p style=““ class=“text-align-justify“>In the equities space, European stocks were initially higher but are now softer as US futures are also looking more tepid on the day. The back and forth mood during the week isn’t helping and it is now down to Powell to settle the score before the weekend.</p>

This article was written by Justin Low at www.forexlive.com.

<p style=““ class=“text-align-justify“>While they are less dependent than other countries in Europe, there is still little comfort when power prices are some 10 times more expensive than they were last year. The energy crunch in the region isn’t going to skip France.</p>

This article was written by Justin Low at www.forexlive.com.

<p class=“MsoNormal“>Recession is
a buzzword in the news right now, as due to a variety of factors—ranging from
the post-Covid-19 recovery period to the conflict between Russia and
Ukraine—one might be just around the corner for many countries in the world. In
fact, in mid-August, <a target=“_blank“ href=“https://www.bloomberg.com/features/2022-federal-reserve-recession-inflation-response/?sref=yEXR9lTX“ target=“_blank“>Bloomberg</a>
wrote that there was almost a 100% probability of a recession before the end of
2023. </p><p class=“MsoNormal“>The higher
interest rates needed to tame inflation were expected to trigger a period of
slow economic growth and high unemployment. <a target=“_blank“ href=“https://www.investopedia.com/articles/economics/08/past-recessions.asp“ target=“_blank“>Tight</a>
central bank monetary policy is often a catalyst for recession, but another
potential cause can be a surge in energy prices, which has also occurred in
2022. At other times, when consumers hold back on spending, or when the prices
of houses slip, the economy can also be tipped into a downturn. </p><p class=“MsoNormal“>Despite the
warning signs, not all traders have been convinced a recession is on the way.
In June, <a target=“_blank“ href=“https://www.bloomberg.com/features/2022-federal-reserve-recession-inflation-response/?sref=yEXR9lTX“ target=“_blank“>the
S&P 500</a>, which tracks risk assets, went on a rally, boosting economic
confidence. No one wants to believe in a recession since the results are
sometimes dire for people’s financial wellbeing, and we saw this fairly
recently during the 2008 recession. </p><p class=“MsoNormal“><a target=“_blank“ href=“https://www.investopedia.com/articles/economics/09/lessons-recessions-depressions.asp“ target=“_blank“>In
a recession</a>, demand from consumers and businesses goes down, which forces
companies to cut costs. As a result, workers have to be laid off, creating a
further drag on demand. Thereafter, the low production and sentiment feed off
one another, and the economy quickly loses altitude.</p><p class=“MsoNormal“>In <a target=“_blank“ href=“https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp“ target=“_blank“>2008</a>,
US unemployment reached 10% and nearly four million Americans lost their homes
in a downturn that spread all the way to Portugal, Spain, Greece, and Ireland. However,
each recession emerges in a distinct context and follows unique rules, so the
consequences are not always this bad. In addition, central banks have the
benefit of learning from historical recessions, and they try not to make the
same mistakes. In this article, we’ll take a look at some past recessions with
an eye out for relevant lessons—especially where <a target=“_blank“ href=“https://www.iforex.com/products/commodities“ target=“_blank“>commodity trading</a> is
concerned.</p><p class=“MsoNormal“>The US Recession
of 1973-75</p><p class=“MsoNormal“>Students of
commodity trading know that, after the American embargo on Arab oil, oil prices
mushroomed by a factor of four, which was a key factor in sparking this
downturn. The background to this 16-month recession was a period between August
1972 and August 1973 when inflation in the US rose from 2.4% to 7.4%. </p><p class=“MsoNormal“>The Fed
responded by doubling the federal funds interest rate to 10% by mid-year 1973,
and then adding on another 3% in the first half of 1974. The result was an
unemployment issue that outlasted the recession into 1975. One of the more
obvious lessons from all this goes out to the recession-doubters in 2022: the combination
of high interest rates and elevated energy prices can be difficult for the
economy to resist.</p><p class=“MsoNormal“>The Volcker
Recession of 1980</p><p class=“MsoNormal“>As 1979 was
getting underway, inflation in the US had risen to 7% due to dovish Fed
monetary policy aimed at <a target=“_blank“ href=“https://www.investopedia.com/articles/economics/08/past-recessions.asp“ target=“_blank“>solving</a>
an unemployment problem. At this time, the revolution in Iran led to a
ballooning of oil prices. </p><p class=“MsoNormal“>Fed Chair
Paul Volcker responded to the twin threats by raising interest rates from 10.5%
in August 1979 to 17.5% by April 1980, spawning a severe recession in which <a target=“_blank“ href=“https://www.bloomberg.com/features/2022-federal-reserve-recession-inflation-response/?sref=yEXR9lTX“ target=“_blank“>millions</a>
of people ended up out of work. Following this, however, came a long period of
good economic growth and low inflation, which was Volcker’s goal. His
predecessor, Arthur Burns, by contrast, was criticized for allowing inflation
to rise too high and stay that way too long. The result in that case was
stagflation, <a target=“_blank“ href=“https://en.wikipedia.org/wiki/Stagflation“ target=“_blank“>which is</a> a
period in which high inflation, high unemployment, and slow growth all
co-exist. </p><p class=“MsoNormal“>The present
Fed Chair, Jerome Powell, has responded to rising inflation in a way that is “Closer
to Volcker’s vigor than Burns’s anguished inaction”, even though he may have
not recognized the extent of the problem as early as he might have, says Bloomberg.
</p><p class=“MsoNormal“>A lesson to
draw from the 1970’s and 1980’s may be that the Fed should not spare the
economy the bitter medicine of high rates. Even though the human effects of
rates-driven recessions are painful and real, this is necessary to put healthy
long-term dynamics in place.</p><p class=“MsoNormal“>The 2008
Recession</p><p class=“MsoNormal“>Easy credit
and lenient lending <a target=“_blank“ href=“https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp“ target=“_blank“>standards</a>
in 2007 led homebuyers to borrow more than they could afford, resulting in bloated
home prices. Banks took these mortgages and sold them to investment institutions
on Wall Street, which converted them into financial instruments called CDOs
(Collateralized Debt Obligations). <a target=“_blank“ href=“https://www.investopedia.com/articles/economics/09/financial-crisis-review.asp“ target=“_blank“>Home</a>
prices began to drop in 2006, and people were left with homes worth less than
they were currently paying. </p><p class=“MsoNormal“>Wall Street
banks soon found they had trillions of dollars of securities based on worthless
mortgages. In March 2008, stock markets around the world plummeted and investment
bank Bear Stearns went bankrupt. In September, the same happened to Lehman
Brothers. Millions of people globally felt the pain of the recession.</p><p class=“MsoNormal“>Ben
Bernanke, the Fed Chair back in 2008, <a target=“_blank“ href=“https://www.bloomberg.com/features/2022-federal-reserve-recession-inflation-response/?sref=yEXR9lTX“ target=“_blank“>answered</a>
the problem by cutting the federal funds rate to 0%, buying trillions of
dollars of bonds, and offering forward guidance (assuring the market that rates
would stay low in the short term). By March 2009, stability had been achieved
and then came a bullish rally on the stock market. Powell’s Fed may want to
take advantage of all three of these tools in months to come.</p><p class=“MsoNormal“>The bottom
line</p><p class=“MsoNormal“>Whether or
not a recession comes into full bloom, it’s important to follow the many
factors that can affect key commodity trading instruments such as wheat,
natural gas, and oil—all of which could be impacted by a recession. Armed with
this knowledge, you can make more informed trading decisions during the
best—and worst—of times. </p>

This article was written by ForexLive at www.forexlive.com.

<p class=“MsoNormal“>Market
picture</p><p class=“MsoNormal“>Things are
slow now in crypto, with a slight downward bias for the second day. Bitcoin is
losing 1.5% to $21.4K in the last 24 hours. Ethereum is unchanged for the same
time, remaining at $1680. Top altcoins show mixed dynamics, ranging from a 4.1%
decline (Solana) to a 2.6% increase (Cardano).</p><p class=“MsoNormal“>Total
cryptocurrency market capitalisation, according to CoinMarketCap, was down
slightly, by 0.1% overnight, to $1.04 trillion. The Cryptocurrency Fear &
Greed Index rose 2 points to 27 by Friday and moved into „fear“
status from „extreme fear“.</p><p class=“MsoNormal“>Bitcoin lags
behind the equity market and altcoins on Thursday and early trading on Friday.
And now, it is crucial to understand whether this is a formidable warning of
domestic weakness in the latest demand for risky assets. Alternatively, the
poor performance of the first cryptocurrency might be its own problem. But it
would break the trend of recent months, where Bitcoin has often acted as a
leading indicator for the global equity market.</p><p class=“MsoNormal“>News
background</p><p class=“MsoNormal“>Coinbase CEO
Brian Armstrong said that eventually, cryptocurrencies would be integrated
everywhere, as the internet has previously been, and the catalyst for their
universal adoption will come from large tech companies.</p><p class=“MsoNormal“>Ethereum
co-founder Vitalik Buterin believes that people underestimate how much
cryptocurrency payments are superior to other traditional payment instruments.</p><p class=“MsoNormal“>One of the
world’s leading technology companies, South Korea’s Samsung, is serious about
entering the crypto market by launching its cryptocurrency platform in the
first half of 2023.</p><p class=“MsoNormal“>Olli Rehn,
governor of the Bank of Finland, said the digital euro and the use of private
financial technology could make cross-border payments easier in Europe.</p><p class=“MsoNormal“>This article was written by <a target=“_blank“ href=“https://www.fxpro.com/“ target=“_blank“>FxPro</a>’s Senior Market Analyst Alex
Kuptsikevich.</p>

This article was written by FxPro FXPro at www.forexlive.com.

<p class=“MsoNormal“>The bull market is a term that describes when the market is rising or
expected to rise. On the other hand, a bear market occurs when the price of an
asset falls 20% or more for a continuous period. A bear market is a market in
decline.</p><p class=“MsoNormal“>The market’s direction is a dominant force that affects the portfolio
of any investor or trader. But it isn’t always easy to predict the market’s
direction. However, there are a lot of differences between these two markets,
each with its own pitfalls and advantages. </p><p class=“MsoNormal“>So, knowing what to look out for right from the start will determine
what strategies you use and influence trading decisions as you attempt to take
advantage of the trend or protect your assets.</p><p class=“MsoNormal“>Traders use various methods to figure out the market trends. One of them
is to <a target=“_blank“ href=“https://howtotrade.com/chart-patterns/engulfing-candle/“ target=“_blank“>trade the bullish engulfing candle</a> as an
indicator of when to enter a trade or position. You will learn more about this
method further down the article.</p><p>Differences Between the Markets</p><p class=“MsoNormal“>The best way to know whether or not the market is becoming bullish or
bearish is to examine these key areas:</p><p>1. Market performance</p><p class=“MsoNormal“>In a bull market, the price of assets rises because of the increase in
buyers and investors. Therefore, even when the market experiences a few
corrections, investors are willing to risk their capital because they believe
the market will continue to rise for a while. An increase in GDP growth also
marks a bull market, high employment rate, increase in sales and industrial
output.</p><p class=“MsoNormal“>In a bearish market, the price of assets is either steady or gradually
losing value. Investors‘ fear of falling prices usually facilitates the
continued downtrend.</p><p class=“MsoNormal“>Other areas of the economy will experience a decline as well, with a <a target=“_blank“ href=“https://www.forexlive.com/technical-analysis/gdp-came-out-negative-putting-the-us-in-a-technical-recessionhow-has-it-impacted-the-usd-20220728/“ target=“_blank“>decline in GDP growth</a> and a decrease in
industrial output. The value of the country’s currency also drops during a bear
market.</p><p>2. Interest Rates</p><p class=“MsoNormal“>One of the hallmark traits of bull markets is rising or high-interest
rates. This is done to make the economy more attractive to foreign investors
who will benefit from the higher interest rates.</p><p class=“MsoNormal“>Increasing the interest rate also serves as a means of checking the
rise of inflation or speculative bubbles (a situation where the price of an
asset(s) rises beyond its intrinsic value due to speculation). Plus, it
controls excess liquidity in the economy.</p><p class=“MsoNormal“>By contrast, a bearish market will result in lowered interest rates. As
buyers check out of the market and selling pressure increases, interest rates
will be reduced to encourage more borrowing and business growth. During this
time, foreign investors may pull out of the economy or avoid investing in it.</p><p>3. Changes in Exchange Rate</p><p class=“MsoNormal“>Since the economy is strong in a bull market, the currency also becomes
more valuable. A bullish market increases the demand for a country’s currency,
thereby strengthening it against other currencies.</p><p class=“MsoNormal“><a target=“_blank“ href=“https://www.forexlive.com/Education/the-eur-usd-parity-what-does-it-mean-for-your-portfolio-20220722/“>A strong exchange rate can result in more profit for
forex traders</a> and make importing goods easier.</p><p class=“MsoNormal“>As investors pull out of the economy in a bear market, the demand for
the currency drops, affecting its value and exchange rate. It also makes
imports more expensive and can also affect trading activities.</p><p>4. Inflation</p><p class=“MsoNormal“>Typically, the high demand for goods and services in a bull market will
result in <a target=“_blank“ href=“https://www.forexlive.com/Education/how-to-beat-inflation-by-investing-20220715/“>rising levels of inflation</a>.</p><p class=“MsoNormal“>The opposite will occur in a bear market where the price of goods and
services will drop to increase customers‘ purchasing power. However, it is
still possible for inflation to occur in a bear market.</p><p>5. Consumer sentiment</p><p class=“MsoNormal“>Consumer or investor sentiment does have an impact on which direction
the market goes. In a bull market, consumer sentiment is strong because of how
well the economy is doing. This makes them more likely to spend and invest
because they believe the economy will continue to grow.</p><p class=“MsoNormal“>But in a bear market, investors and consumers are more likely to save
their money because of their distrust of the market. When this happens, it can
cause the market to decline even further because of the increase in the
outflow.</p><p>How to Predict a Bull or Bear Market</p><p class=“MsoNormal“>Predicting the potential direction of the market is always a tricky
task for investors and traders. You want your predictions to be as accurate as
possible to avoid being affected by swings or pullbacks when trading.</p><p class=“MsoNormal“>To determine the possible direction of the market, you should consider:</p><p>Using chart patterns</p><p class=“MsoNormal“>Chart patterns are formed when the market moves in a certain way. The
patterns resulting from past price movements act as a tool for traders to
determine future market movements. In addition, these patterns can be used to
examine different markets, including stocks, commodities, forex, and more,
making them an integral part of technical analysis.</p><p class=“MsoNormal“>Chart patterns can either be bullish or bearish depending on the
information they show and how they influence trading decisions. For instance,
traders identify and trade the bullish engulfing candle as a buying opportunity
to take advantage of the impending bullish trend.</p><p class=“MsoNormal“>Understanding and recognizing chart patterns will give you a
competitive edge in the market and increase the effectiveness of your technical
analysis strategy. But there are several chart patterns, and learning to
identify them can be a difficult task for amateur traders.</p><p class=“MsoNormal“><a target=“_blank“ href=“https://www.forexlive.com/Education/chart-patterns-guide-20220125/“>So, it is advisable to familiarize yourself with popular
patterns</a> like wedges, triangles, and channels, then gradually build
your knowledge as you continue in the market. In addition, some forex brokers
include tools in their programs that make identifying patterns easier for
traders. </p><p class=“MsoNormal“>Remember that while these patterns give indications about future price
movements, they should not be relied on completely and needs to be confirmed
with technical indicators.</p><p>Fundamental analysis</p><p class=“MsoNormal“>Fundamental analysis focuses on various key factors that can affect the
direction of a market. It gives investors or traders crucial insight into <a target=“_blank“ href=“https://www.sciencedirect.com/science/article/pii/S0140988322002341″>economic and geopolitical events</a> that will
have the most impact on the price of assets.</p><p class=“MsoNormal“>There are a lot of elements traders need to pay attention to when it
comes to fundamental analysis, but economists have narrowed it down by creating
the economic calendar. </p><p class=“MsoNormal“><a target=“_blank“ href=“https://www.forexlive.com/Education/!/an-economic-calendar-might-be-an-investors-daily-best-friend-20210315″>The economic calendar is a simplified way to view major
economic events</a> in different countries like interest rate, GDP,
trade balance, and situation of employment.</p><p class=“MsoNormal“>It allows you to gauge the impact the events will have when they are
announced and note predictions from other economists. When using the economic
calendar to make predictions, it is advisable to focus more on <a target=“_blank“ href=“https://www.forexlive.com/news/key-economic-releases-and-events-next-week-20220812/“>events</a> that command the most attention,
especially from countries like the US.</p><p class=“MsoNormal“>Announcements from major
countries tend to have a global impact and can indicate future market
direction. It is necessary to still confirm the analysis with technical
indicators to increase its accuracy and reliability.</p><p>Shifts in Volume</p><p class=“MsoNormal“>Examining volume patterns can give you an idea of how strong the
bullish or bearish trend in the market is going to be. For instance, if a bear
market is in place, but the volume of assets rises, it means that more buyers
are entering the market, and there is an imminent reversal. </p><p class=“MsoNormal“>But if the volume of assets falls in a bullish market, it shows that
the buyers have reduced, and there could be a potential reversal.</p><p class=“MsoNormal“>For analyzing the volume in the market, traders use:</p><ul><li>On-Balance Volume Indicator: This is a cumulative indicator that measures
buying and selling pressure. It is relatively simple to use as volume is added
on up days and subtracted on down days.</li><li>Volume Price Trend Indicator: This volume indicator analyzes the strength of
changes in price and also the direction of the asset.</li><li>Chaikin Money Flow Indicator: This is an indicator that calculates volume
based on the price change of an asset.</li><li>Klinger Oscillator: This is a volume indicator that sums up the
buying and selling volumes over a specific period of time.</li></ul><p class=“MsoNormal“>Although volume indicators are handy tools for measuring the strength
or weakness of the market, they do not always give precise information.
Therefore, it is preferable to make them a part of your trading strategy rather
than a standalone method.</p><p>The Bottom Line</p><p class=“MsoNormal“>The common mantra is to buy when the prices are low and sell when the
prices are high in order to make some profit. While this is good advice, it is
also important not to make trading decisions based on the price of the security
alone.</p><p class=“MsoNormal“>The best way to have an edge is to conduct an analysis to uncover the
factors influencing the price of the asset. Also, combining fundamental
analysis with your technical analysis strategy will provide you with the strong
foundation needed to make trading decisions. Both markets present opportunities
to traders, and regardless of the market in place, your success depends on how
your ability to maneuver through it.</p>

This article was written by ForexLive at www.forexlive.com.