• Prior -5.7%
• Market index 180.4 vs 190.3 prior
• Purchase index 132.3 vs 138.4 prior
• Refinance index 432.1 vs 463.8 prior
• 30-year mortgage rate 7.07% vs 7.05% prior

That’s another soft reading as the recent rebound in mortgage activity has all but faded now. The latest drop in the market index brings it to the lowest since the end of February.

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

Let’s talk about risk to
reward ratio. This is something controversial, because setting a fixed RR
(reward to risk) like 3:1 isn’t fully wrong, but it isn’t even right. You need
to understand that there are no certainties that your trade goes to the target,
it may reverse at 1:1.

You may say „yeah,
but I would have already put my SL at BE (breakeven) by that time, because I
trailed it“ and you would be correct, but what if all of your 3:1 trades
end up at breakeven? Your account would be actually down a little because of the commissions
you paid. You would have worked hard for nothing.

That’s why you shouldn’t
have a fixed rule like that, in trading you need to adapt, be flexible and
proactive. Your soft target may be a technical level like a strong support or
resistance zone, or maybe a Fibonacci extension level and so on, but your trade
should remain active until you see that the reasons for the trade
have changed, or you lost conviction in it.

If your reasons are still
there you can keep it active or maybe you can take some profits off the table
at different times and let the rest run. You can also manage the trade by
trailing your stop loss behind strong swing points for example. But if the
reasons aren’t there anymore just close it and get what you gained instead of
hoping and losing all your gain exiting with a BE trade, or worse a loss.

You can even cut your
losses limiting them to a fraction of your original risk, there’s no need to
holding just because of hope. You can see that this way your trade can even
turn into a 5:1 or more and that will compensate for your losing trades. Remember
that it’s not about being right or wrong but how much you make when you’re
right and how much you lose when you’re wrong.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

„I think there is certainly a high likelihood. But it is not inevitable at the moment.“

Until one of the major players pioneer the use of a digital currency successfully, one can expect these „plans“ to be ongoing indefinitely. China has been the leader in this space and even through forceful means, a digital yuan can hardly be said to be a success. So, I wouldn’t expect other major central banks to adopt this any time soon. But if and when the change comes, it will be a swift one across the globe.

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

Fundamental
Overview

The mood in the markets has
been slowly improving this week after the month-end flows last week impacted
the risk sentiment. The US data this week came on the softer side which sent
Treasury yields lower and consolidated the market’s expectations of two rate
cuts by the end of the year.

The risk-on sentiment is
still present in the markets as the data overall has been showing good growth
without worrying inflationary pressures. If this were to continue, Bitcoin could
reach a new all-time high in the next few weeks.

Bitcoin
Technical Analysis – Daily Timeframe

On the daily chart, we can
see that Bitcoin bounced on the 67275 support and extended the rally into the next
resistance around the 72000 level. The buyers continue to buy the dips looking
for a new all-time high as long as the risk sentiment supports the market. The
sellers, on the other hand, might lean on the 72000 resistance with a defined
risk above it to position for a drop back into the 67275 level.

Bitcoin Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can
see that we had some nice confluence around the support with the trendline and the 38.2% Fibonacci retracement level. This technically strengthens
the support zone, so the sellers will need to break below that level to target
the 60000 support next. If we get a pullback from the 72000 resistance, we can
expect the buyers to lean on the trendline again to position for a breakout to
the upside.

Bitcoin Technical Analysis – 1 hour Timeframe

On the 1 hour chart, we can
see that we have some choppy price action at the moment around the 70640 level.
This recent breakout should see the buyers increasing the bullish bets into the
all-time high. The sellers will want to see the price falling below the 70000
level to position for a drop into the major trendline. The red lines define the
average daily range for today.

Upcoming
Catalysts

Today we get the US ADP and the US ISM Services PMI. Tomorrow, we will see
the latest US Jobless Claims figures, while on Friday we conclude the week with
the US NFP report.

This article was written by Giuseppe Dellamotta at www.forexlive.com.

In FX, USD/JPY is the main mover on the day with the pair up 0.9% to 156.20 currently. Besides that, USD/CHF is up slightly by 0.3% to 0.8925 amid a test of key technical support here. But outside of that, the changes are minimal with narrow ranges still prevailing on the day. I mean, EUR/USD is still contained within a 15 pips range so that does say quite a bit.

In other markets, bonds are also settling down a bit after the strong bids since last week. 10-year yields in the US are up 1.3 bps to 4.349% amid another test of the critical juncture here. As for stocks, European indices are up slightly in catching up to the Wall Street rebound yesterday. US futures are a touch higher but nothing outstanding as of yet.

All eyes now are on the US ADP employment roulette data coming up later. This is a report that I’ve grown to detest over the years and I’m sure I am not alone on that. It has lost much of its importance in terms of relating to the overall labour market report on Friday. And the numbers here can even come up to be rather random at times. Hence, the roulette table meme.

Today will be no different with the estimated reading seen at 175K for May, down from the 192K in April.

Still, it is one that markets will look towards to make any moves. Or at least the algos will. That especially if there is a big miss or beat on the estimate. So, do keep an eye out for the data later even if it might not be one that predicts well what to expect from Friday’s non-farm payrolls.

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