TECHNICAL A NA LYSIS ST R AT E G IE S
TRADER MAGAZINE
GBP
UK ELECTION IMPLICATIONS
FINANCIAL
LOSS TRAUMA
GOLD FIX HISTORY
next stop
Grexodus?
POLITICAL RISKS AND POSSIBILITIES OF GREECE’S EXIT FROM THE EURO AREA APRIL - JUNE 2015
NOK 3 MONTHS OUTLOOK
CONTENTs
WHAT THE FUTURE HOLDS FOR THE POUND STERLING
FX
18
What traders should expect in the next 18 months
31
TECHNICAL ANALYSIS
25 07 Editor’s note FUNDAMENTAL ANALYSIS 36 The Euro: Its Beginning, Its End, and Its Future: Long-term, Swing, and Mid-term EUR/USD trading considerations 45 What to Make of the Up and Coming UK General Election: A look at how the UK elections could impact the GDP and the FX market volatility 41 Exploring the market implications of May’s UK general election: looks at the implications of the UK elections on the markets ASK THE COACH 11 Should you focus on a number of pips or a percentage gain per day? Steve Ward answers your questions CURRENCY WATCH: 22 NOK – NORWEGIAN KRONE:
Using Bollinger Band and Stochastic along with Price Action
POLITICAL RISKS IN EUROPE: NEXT STOP GREXODUS? Looks at the risks and possibilities of Greece’s exit from the euro area
further weakening expected within the 3 months horizon TECHNICAL ANALYSIS 47 Trading Candlestick Patterns With Moving Averages TRADING METHOD: 14 How Time Consuming is Forex Trading? Techniques and tools to produce a much more time-efficient and productive approach to trading. 54 How to profit from news trading without being psychic: learn to play news release odds in your favour TRADING PSYCHOLOGY: 51 Psychological Trauma Through Financial Loss: how spectrum therapy can help traders recover from psychological damages MARKET WATCH 58 History of the Currency and Gold Fix: looks at a 96-year daily tradition at
the heart of the FX market BOOK REVIEW 63 Mindful Trading: Mastering Your Emotions and the Inner Game, by Rande Howell TECHNICAL REPORTS: 65 Trends and Targets: Majors US Dollar Rate Major Cross Rates Selected Asian FX Rates FX Emerging Markets 65 Featured Markets: EUR/USD, EUR/GBP, USD/SGD, EUR/PLN 69 CONFERENCES & SEMINARS INTERNATIONAL DATA 70 FX Spot Monitor 71 Central Bank Rates 72 Economic Data - FX Poll 73 Markets View 74 ECONOMIC CALENDAR FX TRADER MAGAZINE April - June 3
MACROECONOMICS
FX
by Sergio Capaldi
Political Risks in Europe:
Next Stop Grexodus?
Despite the rhetoric of the heads of the major institutions and of the government leaders of the European Union, the risk of Greece exiting the euro area is by all means tangible. The distance between the parties are by now too great to be bridged. Even assuming that the Greek PM, Tsipras, if forced to choose between a watereddown compromise and a default,
would opt for the former, acceptance of the decision by his party, Syriza, should not be taken for granted. In fact, Tsipras is unlikely to be able to hold in check a formation so ridden within malcontent that even only the initial concessions made at the Eurogroup of 20 February opened an internal front of total opposition to the possibility of a compromise being
reached on austerity. A domestic political crisis would open a very uncertain phase in which the radical wing of Syriza would be replaced by parties with markedly different manifestos, even at odds with Syriza’s. The government’s action would become a struggle if a radical and swift implementation of reforms were imposed.
FX TRADER MAGAZINE April - June 31
FX
MACROECONOMICS
Economic policy uncerttainty index
To be extremely brief, based on its actions and declarations, the Greek government seems to hold the view that current level of public debt is not the responsibility of Greece, but rather the result of the fiscal bailout strategy imposed by the Troika; that the social cost of the efforts required to reach and maintain the fiscal targets laid out by Europe is too high; and that a definitive solution to the crisis cannot imply a significant reduction of debt. For propagandistic reasons, or possibly out of true conviction, the emphasis of the Greek government is focused on the issue of its sovereignty, mistaken for its solvency. What’s more, the current government does not seem to have a full grasp of the actual functioning of the European institutions, and its decoy moves, in addition to wasting precious time, have deeply irritated the country’s European partners. It is hard to imagine the main creditor countries in Europe
32 FX TRADER MAGAZINE January - March 2015
Source: Datastream
accepting such a political approach. Also, the countries that have benefited from bailout loans and
met strict conditions, would find it hard to justify such a difference in treatment to their electors. Last but not least, the administrative elections in France and in Andalusia, Spain, have indicated that inflexibility towards Greece is “paying off ” in electoral terms. In France, the outcome of the first round has reduced the chances of a victory at the Presidential elections of 2017: Marine Le Pen’s Front National stopped at 25.1% of the vote, against 27.9% for Sarkozy’s UMP. According to voting intention surveys reported
While Greece’s exit from the euro area seems to be a real possibility, the phases and timeline of the process remain to be defined