This builds on the earlier story here: USD/JPY retests highs for the year as dollar stands its ground

The pair now is up to a high of 149.15 as buyers seek a firm break of the January high around 148.80 on the daily chart.

Despite the push higher here, the dollar is only marginally higher against the rest of the major currencies bloc. Adding to that, 10-year Treasury yields are also just slightly higher by 1.9 bps to 4.117% on the day. So, this looks to be more of an isolated move more than anything else.

Sure, we did see some dovish commentary from the BOJ earlier here. But when you weigh that against the bank’s recent rhetoric, I don’t see it as being that much different. As of now, it is still all about the spring wage negotiations and then we’ll see how much the BOJ actually wants to change up the narrative.

In any case, we definitely can’t ignore the charts as traders. And the technical story is now suggesting that buyers are trying to push for a break. If so, the 150.00 mark will be the next critical point to watch.

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

USD

• The Fed left interest rates unchanged as
  expected while dropping the tightening bias in the statement but adding a
  slight pushback against a March rate
  cut.
• Fed Chair Powell stressed
  that they want to see more evidence of inflation falling back to target and
  that a rate cut in March is not their base case.
• The latest US GDP beat
  expectations by a big margin.
• The US PCE came
  mostly in line with expectations with the Core 3-month and 6-month annualised
  rates falling below the Fed’s 2% target.
• The US NFP report
  beat expectations across the board by a big margin.
• The ISM Manufacturing
  PMI
  surprised to the upside with the new orders index, which is considered a
  leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
  expectations across the board with the employment sub-index erasing the prior
  drop and prices paid jumping above 60.
• The US Consumer
  Confidence report came in line with expectations but
  the labour market details improved considerably.
• The market now expects the first rate cut in May.

EUR

• The ECB left interest rates unchanged as
  expected maintaining the usual data dependent language.
• The recent Eurozone CPI came
  in line with expectations with the disinflationary process continuing steady.
• The labour market remains historically
  tight with the unemployment rate hovering at record lows.
• The Eurozone PMIs beat
  expectations on the Manufacturing side but missed on the Services one with both
  measures remaining in contraction.
• The ECB members recently have been pushing back
  against the aggressive rate cuts expectations.
• The market expects the ECB to cut rates in April.

EURUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that EURUSD bounced
from the key support zone at
the 1.0723 level and pulled back into the blue 8 moving average. The
price was overstretched following the US NFP report as depicted by the distance
from the 8 moving average. In such instances, we can generally see a pullback
into the moving average or some consolidation before the next move. We indeed
got a pullback into the moving average which is where we should start to see
some action on the lower timeframes.

EURUSD Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that the pair pulled
back to retest the bottom trendline of the falling wedge pattern
where we can also find the confluence of the
38.2% Fibonacci retracement level
and the previous swing low level. This is where the sellers should step in with
a defined risk above the resistance to position for a drop into new lows. The
buyers, on the other hand, will want to see the price breaking higher to
invalidate the bearish setup and position for a rally into the top trendline
around the 1.0850 level.

EURUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see that the
price rejected the key resistance zone around the 1.0785 level and it’s now at
the upward trendline where we have also the red 21 moving average for
confluence. This is where the buyers are likely to step in with a defined risk
below the trendline to position for a break above the resistance. The sellers,
on the other hand, will want to see the price breaking lower to increase the
bearish bets into new lows.

Upcoming Events

Today we will see the latest US Jobless Claims
figures which is going to be last notable event of the week.

This article was written by FL Contributors at www.forexlive.com.

Once again, it’s shaping up to be another session with not much to really say anything about. It’s all part of the waiting game it seems, as we count down to the US CPI data next week. Major currencies are little changed for the most part, with only the Japanese yen slightly weaker on the day. USD/JPY did run up to retest the highs for the year but is keeping just below that now:

Besides that, other dollar pairs are seeing minimal change and trading rather flattish overall. That’s a clear signal of more subdued appetite thus far on the session.

In other markets, US futures are also not doing a whole lot for now. All eyes will be on Wall Street to see if tech shares can carry their weight once again, with the S&P 500 nearing the 5,000 mark. In the bond market, Treasury yields are also little changed at the moment with 10-year yields sitting flattish at 4.104% on the day.

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

Yesterday,
the S&P 500 closed the day at new all-time highs as the market continues to
be supported by the Mag7 stocks. This week was basically uneventful with just
the ISM
Services PMI being the only notable release and, although it
surprised to the upside across the board, the jump in prices paid index could
be a worrying signal. Today we will see the latest US Jobless Claims
figures and then the calendar is empty until the US CPI next Tuesday. The
market should start to think about how it wants to position itself into the
inflation report.

S&P 500 Technical
Analysis – Daily Timeframe

On the daily chart, we can see that the S&P 500
last week pulled back into the trendline following
a bit more hawkish than expected Fed but bounced back strongly and rallied all
the way up to fresh new all-time highs. If we get another pullback into the
trendline we can expect the buyers to lean on it again to position for new
highs.

S&P 500 Technical
Analysis – 4 hour Timeframe

On the 4 hour chart, we can see that we
got a small pullback recently into the 4930 level where the buyers stepped in
immediately and pushed the price to new highs. The sellers don’t have much to
lean onto here and they should keep on waiting for the break of the major
trendline before starting to look for bearish opportunities.

S&P 500 Technical
Analysis – 1 hour Timeframe

On the 1 hour chart, we can see that we
have a minor support around
the previous high at the 4973 level where we can also find a trendline for confluence. This
is where the buyers should step in with a defined risk below the trendline to
position for new highs. The sellers, on the other hand, will want to see the
price breaking lower to pile in and target a drop into the major trendline.

This article was written by FL Contributors at www.forexlive.com.

The role of forex brokers in South Africa has become increasingly pivotal in 2024. These companies, akin to their multi-asset counterparts in the broader financial landscape, play a crucial role in facilitating trading endeavors for a diverse range of traders.

Whether you’re a seasoned forex investor navigating the intricate currency markets or a novice embarking on your trading journey, the selection of the right broker stands as a paramount decision, wielding the potential to shape your trading success and optimize returns in a dynamic market.

Effective risk management and the pursuit of diversified portfolios are key strategies. Forex brokers, much like their multi-asset counterparts, offer traders access to a wide array of financial instruments, presenting significant advantages.

Diversification also emerges as a core rationale, allowing traders to spread risk across various currency pairs and mitigate the impact of market volatility.

Accessing multiple markets, adaptability to changing conditions, and the ability to employ risk-mitigating strategies like hedging contribute to the allure of forex brokers.

Moreover, the cost efficiency and convenience offered by these brokers, streamlining trades across various currency pairs within a unified platform, add a layer of appeal to traders navigating the complex terrain.

Understanding the Forex Trading Scene in South Africa

Much like the investing and online trading space, where multi-asset brokers have gained prominence for their ability to diversify portfolios across various asset classes, the forex arena in South Africa demands a discerning choice.

The decision hinges on factors ranging from regulatory compliance, trading platforms, and execution costs to customer support, educational resources, and overall reputation.

As such, exploring the world of forex brokers logically entails a nuanced consideration of factors extending beyond individual broker features. Individual preferences and trading objectives vary, making it quintessential for traders to align their choices with specific requirements.

The careful evaluation of these critical factors empowers traders to confidently navigate the landscape, choosing brokers that not only meet their needs but also propel them towards financial success.

We examine the forex trading landscape in South Africa, shedding light on the diverse offerings and nuances that define the market.

Top FX Brokers in South Africa

FBS

FBS emerges as an attractive option, especially for novice traders venturing into the forex arena. With a range of account types such as Cent and Micro, FBS caters to those starting with smaller capital. This flexibility, coupled with a user-friendly trading environment and comprehensive educational resources, positions FBS as a go-to choice for beginners.

Additionally, its copy trading feature enables less experienced traders to glean insights from seasoned professionals, fostering a supportive learning environment.

The variety of account types, including the Zero Spread option for high-volume traders, further emphasizes FBS’s commitment to accommodating diverse trading styles.

Overview:

• Year Founded: 2009
• Regulation: FSCA, FSC, ASIC, CySEC
• Average EURUSD Spread: Floating spread from 0.5 pips with Standard account
• Maximum Leverage: 1:3000 with Standard Account
• Trading Instruments: 40 currency pairs, Commodities, Stocks, Indices.
• Trading Platforms: MT4, MT5, FBS trader & CopyTrade

Review: FBS, established in 2009, is an international CFD broker with a solid reputation. Regulated by FSCA in South Africa, FBS offers a variety of instruments, including stocks, metals, indices, and bonds.

With a user-friendly environment and educational resources, FBS offers flexile trading conditions, catering to both new and experienced traders.

FBS is lauded for its regulation, no commission on most accounts, copy trading services, and local EFT deposit/withdrawal methods.

Pros:

• Regulated with FSCA in South Africa.
• No commission on trading on the majority of account types.
• Offers Copy Trading and Demo accounts.
• Local EFT deposit & withdrawal methods for South African traders.
• Leverage up to 1:3000.

Account Types:

1. ECN Account: Minimum deposit $1000, floating spread from 1 pip, commission $6 per trade, leverage up to 1:500.
2. Zero Spread Account: Minimum deposit $500, fixed spreads starting from zero pips, commission from $20 per lot, leverage up to 1:3000.
3. Micro Account: Minimum deposit $5, fixed spread from 3 pips, leverage up to 3000:1.
4. Standard Account: Minimum deposit $100, floating spread from 0.5 pips, leverage up to 1:1000.
5. Cent Account: Minimum deposit $1, floating spread from 1 pip, leverage up to 1:1000.
6. Islamic Account: Swap-free option available.

HFM

Boasting a global reach across 200 countries and more than 2.5 million live accounts, HFM’s reputation precedes itself.

With its profound standing in the forex and CFD brokerage landscape since 2010, HFM (previously known as HotForex) beckons traders into a world of unparalleled opportunities. For South African traders, HFM becomes not just a broker but a strategic partner in navigating the complexities of the financial markets.

HFM instills confidence in local traders seeking a secure and transparent trading environment by placing a premium on regulatory compliance as it holds licenses from esteemed global regulators such as FSCA, CySEC, DFSA, FSA, FCA, FSC, and CMA. The South African branch, HF Markets SA (PTY) Ltd, is regulated by the Financial Sector Conduct Authority (FSCA) since 2015. This multi-regulatory approach positions HFM as a secure choice for South African traders.

Moreover, by having a local office, HFM establishes a tangible presence in the region, ensuring that traders have easy access to localized support, meaning that the broker is not merely a platform for executing trades; it is a facilitator of success.

Overview:

· Year Founded: 2010

· Regulation: FSCA, CySEC, DFSA, FSA, FCA, FSC, and CMA.

· Average EURUSD Spread: 0.6 points with PRO account

· Minimum Deposit: $0

· Maximum Leverage: 1:2000

· Trading Instruments: 500+ Instruments on Forex, Metals, Commodities, Stocks, Indices and Cryptos.

· Trading Platforms: MT4 and MT5 for PC, Mac, Web, Android, iOS. HFM App

Review: HFM, a global award-winning forex broker established in 2010, is regulated in South Africa by FSCA since 2015. With super Tight spreads starting from 0, HFM offers fixed spread accounts, various trading instruments, and MT4/MT5 platforms. HFM has developed its own mobile trading application. The HFM app is available for both Android and iOS users. Now clients can trade CFDs on more than 500+ assets immediately on the app.

They support ZAR base currency accounts, and deposits/withdrawals can be done through various methods, including local bank transfers. Traders in South Africa enjoy the services of a dedicated account manager for personalized support 24/5. HFM stands out for its best trading conditions and ultra-fast execution.

Key Features:

• Liquidity providers: Backed by reputable liquidity providers such as Barclays UK and BNP Paribas, HFM ensures reliable execution.
• HFM offers competitive starting spreads from 0.0 pips, with commissions starting from $6 per round turn on Forex trades.
• Traders benefit from a maximum leverage of 1:2000, providing flexibility in trading strategies.
• Swap free accounts: HFM offers swap free accounts to all whether or not they adhere to Sharia principles. With Swap-Free Trading you can trade selected commodities and currency pairs and diversify your portfolio without worrying about extra costs.

· Copy Trading: HFM introduced Copy Trading a powerful tool that enables traders, regardless of their expertise level, to follow other traders, known as Strategy Providers, and copy their trades. It allows South African investors to follow signal providers and strategies beyond their countries.

South Africa-Specific Features:

• ZAR trading accounts: HFM supports ZAR accounts, enabling South African traders to manage their accounts in the local currency.
• Dedicated account manager: Traders in South Africa enjoy the services of a dedicated account manager for personalized support.
• Local deposits and withdrawals: HFM facilitates online bank transfers for funding and withdrawals in South Africa, ensuring convenience for local traders.

Tailored Solutions for South African Traders:

With features like ZAR trading accounts, dedicated South Africa account managers, and support for local funding methods through online bank transfers, one can easily see why South African traders gravitate towards HFM.

As a broker that embraces diversity, HFM supports multiple languages on its website, fostering an inclusive environment for traders from different linguistic backgrounds in South Africa.

With a commitment to providing a safe and supportive trading space, HFM aligns its services with the needs of the South African market, making it a broker of choice for those who seek excellence in their trading journey.

Pros:

• Regulated with FSCA in South Africa.
• Swap-free accounts
• Super Tight spreads starting from 0
• Offers Copy Trading and Demo account
• Leverage up to 1:2000
• Negative Balance protection
• Zero fees on deposits & withdrawals.

XM

XM strikes a balance between affordability and reliability, making it an appealing choice for a broad spectrum of traders. The low minimum deposit of $5 and the availability of Ultra Low Accounts with competitive spreads attract budget-conscious traders.

With a solid reputation for order execution and zero fees on deposits and withdrawals, XM Trading ensures a cost-effective trading experience. Its diverse range of trading instruments, including a choice of 11 base currencies for South African traders, also adds versatility.

XM’s commitment to providing a moderate-risk trading environment, regulated by CySEC and ASIC, instills confidence, making it a suitable choice for traders valuing reliability without compromising affordability.

Overview:

• Year Founded: 2009
• Regulation: CySEC (Cyprus), ASIC (Australia), IFSC
• Average EURUSD Spread: On average 0.8 Pips with Ultra Low Account
• Minimum Deposit: $5
• Maximum Leverage: 1:888
• Trading Instruments: Forex, CFDs on 1000+ Commodities, Stocks, Equity Indices, Precious Metals, Energies
• Trading Platforms: MT4 and MT5 for PC, Mac, Web, Android

Review: XM Trading, part of Trading Point of Financial Instruments Ltd, has been a prominent forex broker since 2009. Regulated by CySEC, ASIC, and IFSC, XM offers fast order execution, low spreads with the Ultra Low Account, and attractive bonuses.

They provide three account types: Micro, Standard, and Ultra Low, with a minimum deposit of $5. XM’s trading conditions are favorable, and they support 11 base currency options for South African traders.

Pros:

• Regulated with CySEC & ASIC.
• Moderate typical EUR/USD spread of 0.8 pips with Ultra Low Account.
• Quick order execution & zero Re-quotes.
• Low minimum deposit of $5.
• Negative Balance protection is available.
• Zero fees on deposits & withdrawals.
• Fast & knowledgeable live chat support.

AvaTrade

AvaTrade stands out for its competitive fee structure, particularly with fixed spreads, positioning it favorably among cost-conscious traders.

The EUR/USD spread of 0.9 pips (on average) with a Retail account enhances its appeal, especially for those focusing on major currency pairs.

While AvaTrade imposes non-trading charges, including inactivity fees, its transparent fee model ensures that traders can anticipate costs accurately.

The support for ZAR as a base currency is a notable advantage for South African traders, streamlining transactions.

Despite its slightly limited trading instruments, AvaTrade’s commitment to low fixed spreads and quick withdrawals, coupled with FSCA regulation, makes it a compelling choice for traders seeking a balance between cost-effectiveness and regulatory security.

Overview:

• Year Founded: 2006
• Regulation: FSCA (South Africa), FSA & FFA (Japan), FSC (BVI), ASIC (Australia), CBI (Ireland)
• Average EURUSD Spread: 0.9 pips with Retail account
• Minimum Deposit: $100
• Maximum Leverage: 1:400
• Trading Instruments: Forex, Crypto CFDs, Stock CFDs, Options, Indices CFDs, Commodities CFDs, ETFs CFDs, Bonds CFDs.
• Trading Platforms: MT4, proprietary AvaTradeGo for PC, Mac, Android, iOS, and web browser

Review: AvaTrade, a European forex broker established in 2006, is regulated by FSCA since 2015. With competitive spreads, AvaTrade offers fixed spread accounts, various trading instruments, and MT4/MT5 platforms.

They support ZAR base currency accounts, and deposits/withdrawals can be done through various methods, including local bank transfers. While their customer support is not 24/5, AvaTrade stands out for its low fixed spreads and ZAR base currency support.

Pros:

• Regulated with FSCA (South Africa).
• Zero deposit fees & quick withdrawals.
• Local South African phone number for support.
• Accepts local bank transfers for deposits.
• Low fixed spread for Majors.
• ZAR Base Currency trading accounts are supported.

Tickmill

Established in 2014, Tickmill caters to traders with varying preferences through its diverse account types.

The Classic Account, with an average spread starting from 1.6 pips for EUR/USD, suits those prioritizing simplicity and cost-effectiveness. On the other hand, the Pro account, with a low spread of 0.1 pips (typical) and a nominal $2 commission per Standard Lot, appeals to traders valuing tighter spreads and willing to pay a competitive commission.

The availability of a Rand base currency option enhances convenience for South African traders.

With FSCA, FCA, and CySEC regulation, Tickmill offers a secure trading environment, making it an enticing choice for traders who appreciate account diversity and tailor-made solutions.

Overview:

• Year Founded: 2014
• Regulation: FSCA, FCA (UK), CySEC (Cyprus)
• Average EURUSD Spread: From 0.1 pips with Pro account
• Minimum Deposit: $100
• Maximum Leverage: 1:500
• Trading Instruments: 62 Currency pairs, CFDs on 3 Metals, 32 Stock Indices & Oil, 8 Cryptos & 7 Bonds
• Trading Platforms: MT4 (MetaTrader4), MT5, WebTrader

Review: Established in 2014, Tickmill is considered a safe broker, regulated by FSCA, FCA, and CySEC.

With a low commission of $4 per standard lot and a spread starting from 0.1 pips with the Pro account, Tickmill offers a competitive fee structure. They support instant deposits via online bank transfer in South Africa and provide various account currencies, including ZAR.

While their customer support lacks a local phone number, Tickmill is praised for its quick withdrawals and a variety of account currency options.

Pros:

• Regulated with FSCA, FCA, CySEC.
• Very low commission of $4 per standard lot & 0.1 pips spread with Pro account.
• No fees on deposit & withdrawal.
• 62 major & minor currency pairs available for trading.
• Instant Deposits via online Bank Transfer in South Africa.
• MT4 & MT5 platforms are available.

Octa

Founded in 2011, Octa caters to traders seeking a streamlined and cost-efficient trading experience.

With a focus on variable spreads without additional commissions, Octa positions itself as a broker with transparency in its fee structure. The typical spreads of 0.8 pips for major pairs, including EUR/USD and GBP/USD, make it a competitive choice for traders valuing predictability in trading costs.

Octa’s commitment to not charging inactivity fees or fees on deposits and withdrawals adds to its appeal. Although it offers a more modest selection of trading instruments, including 35 currency pairs, Octa excels in providing a straightforward, no-nonsense approach to trading, making it an apt choice for those prioritizing simplicity and competitive spreads.

Overview:

• Year Founded: 2011
• Regulation: FSCA, CySEC
• Average EURUSD Spread: 0.9 pips with MT4 & MT5 accounts
• Minimum Deposit: $25
• Maximum Leverage: 1:500
• Trading Instruments: 28 Currency Pairs, 11 CFDs on Metals, Cryptos, Indices
• Trading Platforms: MT4, MT5 & cTrader

Review: Founded in 2011, Octa is considered a moderate-risk broker, regulated by CySEC.

Octa charges variable spreads for each trade, with competitive typical spreads of 0.8 pips for EUR/USD and GBP/USD. They offer a variety of trading instruments, including CFDs on commodities, indices, stocks, and cryptos.

Moreover, Octa supports local internet banking for deposits and withdrawals in South Africa, with no additional fees. Despite lacking a local phone support option, this broker is praised for its quick live chat support and negative balance protection.

Pros:

• Regulated with CySEC.
• Very competitive typical spread of 0.9 pips for EUR/USD with MT4 & MT5 accounts.
• MetaTrader platform & Copytrading is available.
• No fees on deposits & withdrawals.
• Live Chat support at Octa is quick & helpful.
• Local bank transfer is available for deposits & withdrawals in SA.

Conclusion

The quest for the right broker becomes a pivotal decision that shapes the trajectory of traders‘ journeys. In an ever-evolving market, the best Forex brokers in this region prove their mettle by consistently adapting to investors‘ dynamic needs. These brokers stand at the forefront of the industry, offering not just a platform for trading but a comprehensive trading experience that transcends the competition.

The South Africa FX trading landscape demands a discerning approach, acknowledging that individual preferences and trading goals are subjective. As traders meticulously weigh these factors, they forge a path towards confidently choosing an FX broker tailored to meet their specific requirements.

FAQ

How do I choose the best forex broker in South Africa?

Selecting the right Forex broker in South Africa involves considering several key factors. Look for brokers with diverse tradable assets, robust trading platforms, regulatory compliance, efficient order execution, competitive trading costs, responsive customer support, comprehensive educational resources, and a positive reputation in user reviews.

Why does the range of tradable assets matter when choosing a forex broker?

The diversity of investment options becomes a crucial factor for traders looking to build well-rounded portfolios. A broker’s range of tradable assets, spanning stocks, commodities, forex, indices, bonds, and cryptocurrencies, empowers traders to seize opportunities across various market segments. The breadth and depth of these assets serve as the building blocks for crafting portfolios that align with individual risk appetites and investment goals.

How important are a forex broker’s trading platforms and tools?

A broker’s trading platform is essential for executing trades and conducting market analysis. Look for platforms with real-time data, advanced charting capabilities, technical indicators, risk management tools, and customizable interfaces. Ensure compatibility with desktop, web, and mobile platforms for convenient trading.

Why is regulatory compliance crucial when choosing a forex broker?

Regulatory compliance ensures trust and security. Choose a broker regulated by reputable financial authorities such as the Financial Conduct Authority (FCA), the Securities and Exchange Commission (SEC), or the Australian Securities and Investments Commission (ASIC). Regulatory bodies set standards for ethical practices, segregated client funds, and a transparent trading environment.

Should I be concerned about execution and trading costs?

Efficient order execution and competitive trading costs can significantly impact trading outcomes. Low-cost trading is advantageous, especially for frequent traders. Look for brokers offering fast and reliable order execution with minimal slippage. Consider the broker’s fee structure, including spreads, commissions, and other charges.

How important is customer support when choosing a forex broker?

Quality customer support is vital for a seamless trading experience. Prompt assistance in resolving queries, technical issues, and account-related matters enhances your overall satisfaction. Choose a broker with responsive and knowledgeable customer support available through various channels, including phone, email, and live chat.

Do educational resources matter when trying a FX broker?

Access to educational resources empowers traders to make informed decisions and improve their trading strategies. Look for brokers offering comprehensive educational materials such as tutorials, webinars, seminars, market analysis, and trading guides. Educational resources support your knowledge and skill development.

How much weight should I give to a broker’s reputation and user reviews?

User reviews provide valuable insights into a broker’s strengths and weaknesses. Research the broker’s reputation, and read user reviews to gauge the experiences of other traders. Look for brokers with a strong track record, positive feedback, and a solid reputation for customer satisfaction and reliability.

Can South African traders use local bank transfers for deposits and withdrawals with these brokers?

Yes, several of the featured Forex brokers in South Africa offer the convenience of local bank transfers for both deposits and withdrawals. This option allows South African traders to seamlessly fund their accounts and withdraw funds in their local currency, providing ease of transactions.

Are there any specific benefits for South African traders, such as ZAR base currency options or local customer support numbers?

Yes, some Forex brokers cater specifically to South African traders by offering ZAR (South African Rand) as a base currency option. Additionally, certain brokers provide local customer support numbers, ensuring that traders in South Africa can easily reach out for assistance during the company’s business hours. These benefits contribute to a more tailored and user-friendly trading experience for South African investors.

This article was written by FL Contributors at www.forexlive.com.

Trading is the act of buying and selling goods, services, financial
instruments, or any other items of value between two parties. It can take place
in various markets such as stock markets for trading shares of companies, forex
markets for exchanging currencies, commodity markets for trading goods like oil
and gold, and many more specialized markets.

At its core, trading involves the exchange of assets,
typically with the goal of making a profit. Traders capitalize on fluctuations in
the prices of assets by buying low and selling high. The concept is simple, but
mastering the process can be complex and risky.

How Trading Works

In financial markets, trading is facilitated by brokers who
match buyers with sellers. For equities, these are typically stock exchanges
like the New York Stock Exchange (NYSE) or the NASDAQ. These platforms provide
the infrastructure needed for the execution of trades. When an investor decides
to buy a stock, their broker sends the order to the exchange, which finds a
seller to match the buyer’s bid price. Once a match is found, the trade is
executed, and the stock changes hands. Forex, commodities, and other markets
work similarly but may have different types of brokers or trading venues.

Types of Trading

There are several types of trading:

• Day Trading: This involves buying and selling stocks within the
  same trading day, with traders aiming to profit from short-term price
  movements.
• Swing Trading: Swing traders hold onto their assets for several days
  or weeks to capitalize on expected upward or downward market shifts.
• Position Trading: As a longer-term strategy, position traders hold
  stocks for months or even years, depending on their analysis of the
  market’s trends.
• High-Frequency Trading (HFT): Utilizing algorithms and advanced technologies, HFT
  firms make thousands of trades per second to exploit minute price
  discrepancies.

Factors Affecting Trading Decisions

Traders must consider various factors when making trading
decisions:

• Market Trends: Understanding whether a market is bullish or bearish
  can help in planning entry and exit points for trades.
• Economic Indicators: Data like employment rates, inflation, GDP, etc.,
  influence market sentiments and asset valuations.
• News and Events: Earnings reports, political developments, and
  unexpected events can lead to market volatility.
• Technical Analysis: Many traders use charts and historical data to
  identify patterns that can suggest future price movements.

Tips for Successful Trading

1. Educate Yourself: Knowledge of both the markets and trading techniques
   is essential.
2. Start Small: Begin with small investments to manage risk as you
   learn.
3. Develop a Strategy: Stick to a well-thought-out trading plan and avoid
   impulsive decisions.
4. Use Stop Losses: Set stop-loss orders to automatically sell your asset
   when it reaches a certain price, limiting potential losses.
5. Monitor Your Trades: Regularly check on your trades to adjust your strategy
   as needed based on market changes.
6. Avoid Emotional Trading: Don’t let fear or greed dictate your trading
   decisions.
7. Keep Up With News and Trends: Stay informed about global events and economic
   indicators that affect market conditions.
8. Diversify: Spread your investment across different assets to
   mitigate risk.
9. Record Your Trades: Keep a journal of your trades to review your
   performance and strategy over time.
10. Understand Taxes: Be aware of the tax implications of your trades to
    avoid surprises during tax season.

In conclusion, trading requires careful analysis, strategic
planning, and emotional discipline. It operates on the foundational principle
of supply and demand, influenced by various external factors. Successful
trading is not just about making profitable trades, but also managing risk and
learning continuously to adapt to the ever-changing market environment.

This article was written by FL Contributors at www.forexlive.com.

It says that if current trends persist, the US is set to overtake China as Germany’s most important trade partner by 2025 at the latest.

DIHK’s chief executive of foreign trade, Volker Treier, said that „at the moment there are no signs of a significant increase in demand for products made in Germany from China“. Adding that „the US economy is currently doing significantly better than in many other important sales markets for Germany, such as the countries in the EU“.

According to Reuters, the preliminary data from the German stats office should show that German exports and imports to China should total around €253 billion last year. That will still see China as the number one trade partner for Germany for an eighth straight year but only just. German trade volume with the US should see a total of around €252.3 billion last year.

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

It’s tough to gather much conviction in markets this week. 10-year yields in the US are up 3.1 bps to 4.123% in European morning trade today. And that comes after a drop yesterday, which followed a rise on Monday. The push and pull sees yields continue to move around its 200-day moving average of around 4.103% currently:

In the bigger picture, the ceiling near 4.20% and floor near 3.80% are key levels to watch on the chart.

But for now, we’re staying in between that with very little conviction to really test those boundaries. The slight nudge higher in yields today is keeping the dollar steadier overall but trading more mixed. Dollar pairs are mostly little changed so far on the session. The only slight movers are GBP/USD, which is up 0.2% to 1.2627, and USD/CHF, which is up 0.4% to 0.8725 currently.

Going back to the bond market, I want to highlight that we do have two upcoming Treasury auctions this week.

The first will be for 10-year notes later today and then another for 30-year notes tomorrow. Considering the lack of key data releases this week, the auctions might end up driving the moves in the bond market in the sessions to come.

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

USD

• The Fed left interest rates unchanged as
  expected while dropping the tightening bias in the statement but adding a
  slight pushback against a March rate
  cut.
• Fed Chair Powell stressed
  that they want to see more evidence of inflation falling back to target and
  that a rate cut in March is not their base case.
• The latest US GDP beat
  expectations by a big margin.
• The US PCE came
  mostly in line with expectations with the Core 3-month and 6-month annualised
  rates falling below the Fed’s 2% target.
• The US NFP report
  beat expectations across the board by a big margin.
• The ISM Manufacturing
  PMI
  surprised to the upside with the new orders index, which is considered a
  leading indicator, jumping back into expansion. Similarly, the ISM Services PMI beat
  expectations across the board with the employment sub-index erasing the prior
  drop and prices paid jumping above 60.
• The US Consumer
  Confidence report came in line with expectations but
  the labour market details improved considerably.
• The market now expects the first rate cut in May.

NZD

• The RBNZ kept its official cash rate
  unchanged at the
  last meeting stating that demand growth continues to ease and it’s expected to
  decline further with monetary conditions remaining restrictive.
• The New Zealand inflation data printed in line with expectations
  supporting the RBNZ’s patient stance.
• The labour market report beat expectations across the
  board with lower unemployment rate and higher wage growth.
• The Manufacturing PMI fell further into contraction with
  the Services PMI following suit.
• The market expects the RBNZ to start
  cutting rates in Q2.

NZDUSD Technical Analysis –
Daily Timeframe

On the daily chart, we can see that NZDUSD bounced
once again on the key support zone
around the 0.6050 level and pulled back into the trendline. This is
where we can expect the sellers to step in again with a defined risk above the
trendline to position for a breakout below the support and target the 0.59
handle next. The buyers, on the other hand, will want to see the price breaking
higher to invalidate the bearish setup and start targeting new highs with the
0.6170 swing level as the first target.

NZDUSD Technical Analysis –
4 hour Timeframe

On the 4 hour chart, we can see that the latest leg
lower diverged with the
MACD right at
the key support. This is generally a sign of weakening momentum often followed
by pullbacks or reversals. In this case, we are still in the pullback territory
as long as the price doesn’t break above the trendline. We can see that we have
also the 61.8% Fibonacci retracement level
around the trendline which adds some extra confluence to the bearish setup.

NZDUSD Technical Analysis –
1 hour Timeframe

On the 1 hour chart, we can see more
closely the recent price action and the resistance zone around the trendline.
What happens here will likely define where the pair will go in the next few
weeks. A strong rejection should see the sellers taking the pair to new lows,
while a break to the upside is likely to trigger a rally into new highs.

Upcoming Events

This week is basically empty on the data front with just
the latest US Jobless Claims figures on Thursday being the only notable
release.

This article was written by FL Contributors at www.forexlive.com.

Given
the prevailing optimism in financial markets, the long-awaited recession is
being postponed again, even though central banks are cautious about tightening
monetary policy.

Moreover,
the Organization for Economic Cooperation and Development revised its 2024
global economic forecast upward by 0.2 percentage points. This contrasts with
forecasts of a hard landing…

The
projections now point to a global GDP of 2.9% for 2024, up from November’s
estimate of 2.7%, and for 2025 it is expected to remain at 3.0% ). India leads
the way over the next two years, followed by Indonesia.

January
also brought positive news from the JP Morgan S&P Global PMI indices, with
Manufacturing at 50 (vs. 49.0 previously), Services at 52.3 (vs. 51.6) and
Composite at 51.8 (vs. 51.0).

Despite
supply chain disruptions due to tensions in the Red Sea, inflationary
pressures are slowly easing.

Overall,
the data seem to suggest that central banks could cut interest rates sooner
than expected, keeping the economy afloat. So is the optimism in the stock
market more than justified?

Not
necessarily.

A closer
look at the US reveals possible triggers for the crisis, such as a public debt of over 34 trillion dollars. The
substantial challenge lies in paying interest to creditors, which exceeds
national defense spending.

While
cutting spending, especially military spending, might be a rational solution,
geopolitical tensions make this unlikely. Cutting social programs poses its
challenges, with the risk of social unrest and protests, particularly ill-timed
in the run-up to presidential elections.

To
complicate matters, the federal government continues to spend more than it
generates through taxes and other revenue sources, leaving no clear way out of
this financial cycle.

As for
the consequences:

• Rising indebtedness could lead credit rating agencies to downgrade
  the country’s creditworthiness, translating into higher interest rates on
  public debt and exacerbating the debt problem.
• An inflationary trap is another risk if the government resorts to
  money printing to meet debt obligations, which would harm savers and
  investors.
• Ultimately, difficulties meeting debt obligations may force
  negotiations with creditors, implementing austerity measures, or even debt
  default.

To avoid
worst-case scenarios, the government can try to reduce debt levels. However,
this also implies a reduced ability to respond to emerging problems. Thus,
if crises in regional banks or in the commercial real estate market intensify,
they may not all be salvageable, with the consequent risk of a new crisis.

Although
current forecasts maintain an optimistic outlook, the repercussions of the
present prosperity may become more evident in the longer term. In
conclusion, allocating part of the portfolio to hedging instruments such as
precious metals and closely monitoring macroeconomic indicators, including the gold
price chart, is advisable.

This article was written by FL Contributors at www.forexlive.com.