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| | | | Welcome to the latest issue of EarnForex.com newsletter — January 2017. In this issue of EarnForex.com newsletter, I will remind you about the most important Forex-related events of the last month and will also show you the list of the site's latest updates. | | EDITORIAL: Trading Timeframes 📈 | | For traders, a lot of confusion comes from the incorrect understanding of what they actually trade. The greatest misconception of this sort is a conviction that it is somehow possible to trade specific timeframes. For example, trader Alice says that she trades EUR/USD only on hourly and 4-hourly timeframes, while trader Bob says that he only trades weekly chart of EUR/USD. In reality, they both trade the same thing — the EUR/USD currency pair. The fact that a trading instrument looks to be trending up in one timeframe and at the same time seems to be going down in another one is largely irrelevant. Irrespective of what tools you are using to analyze the pair, the currency pair is going to move the same amount of pips and in the same direction across all of its charts (yes, even on Heikin-Ashi). This means that once you have done your analysis using a map (some timeframe chart), you have to look at the actual landscape (the currency rate) as the only relevant measure of your trade's success. By falling into a trap of trading a timeframe instead of an asset, you simply blindfold yourself, limiting your attention to just one representation of the market behavior out of many. | | Overview of the major currency pairs' performance in December | | EUR/USD — was up during the first and the last days of the month with a downtrend during the most part of December. It was at the maximum at 1.0873 on December 8, at its minimum at 1.0352 on December 20, finishing the month at 1.0553. GBP/USD — was going down in December. The highest monthly rate was at 1.2774 on December 6, while the lowest — at 1.2200 on December 28. GBP/USD finished December trading at 1.2346. USD/JPY — was in an uptrend during the first two weeks of the month and in a half as strong downtrend during the last two weeks. The pair rose to as high as 118.66 on December 15, reaching a bottom at 112.83 on December 5 and closing the month with the 116.75 rate. EUR/JPY — traded a bit up and sideways in December. The monthly high was at 124.09 on December 15, the monthly low — at 118.70 on December 5. Trading ended at 123.24 for this currency pair. GBP/JPY — increased in the first half of December but ended the month near the opening as it fell during the second half. The maximum level for this pair was 148.44 on December 15, while the minimum — 142.17 on December 29. The month's trading ended at 144.16 for GBP/JPY. | | Fundamental background of the past month | | The major event for December was the Federal Reserve policy meeting. It turned out to be very positive for the US dollar as the Fed not only hiked interest rates but also updated its economic forecasts, promising more hikes in 2017. The currency paused its rally by the year end due to profit-taking, but most market analysts maintained the optimistic outlook for the greenback. The European Central Bank made the opposite move, making its policy more accommodative. Traders pushed the euro higher initially as the ECB reduced the size of its monthly asset purchases. But then they realized that the prolonged running time of the asset-purchase program means that overall quantitative easing was expanded, not reduced. The Great Britain pound suffered from the resurgence of Brexit fears. In particular, Scotland and Northern Ireland felt that the Brexit hurts their rights as they were voting for staying in the European Union, therefore they will make attempts to avoid leaving the EU, perhaps going as far as having an independence vote. The Japanese yen was also among soft currencies, partly due to disappointing economic growth, though the Bank of Japan improved its economic forecasts after the December policy meeting. The Swiss National Bank did not change its policy, continuing to insist that the Swiss franc is overvalued, therefore the central bank will continue to perform interventions to weaken the currency. The Canadian dollar was strong in December due to the rally of oil prices that followed the announcement from the Organization of Petroleum Exporting Countries at the end of November about cutting production of oil. The currency was hurt a bit by the unexpected drop of gross domestic product and inflation. Australia's GDP contracted as well, and that was hurting the Australian dollar. While the Reserve Bank of Australia left its monetary policy unchanged and even did not complain about the exchange rate, analysts considered the dovish tone of the meeting's minutes as a sign that the bank may cut interest rates in the future. The New Zealand dollar did not perform well last month even though the hawkish stance expressed in the speech of the central bank's head led to speculations that the Reserve Bank of New Zealand may start raising interest rates in the near future. Gold continued to demonstrate an awful performance, falling for seven weeks in a row before rising a bit during the last days of 2016. With that said, the commodity ended the year with a gain for the first time since 2012. | | Interest rate changes in December | | Brazil | 14.00% | -0.25% | 13.75% | | Iceland | 7.00% | -0.25% | 6.75% | | Mexico | 5.25% | +0.50% | 5.75% | | United States | 0.375% | +0.25% | 0.625% | You can see the current interest rates by the world's central banks in our interest rate table. | | Top 5 Forex brokers of the last month | | No new MetaTrader indicators have been added to EarnForex.com since the last issue of the newsletter, but one indicator received a major update: You can always view the previously uploaded Forex indicators. | | One new Forex VPS provider has been added to EarnForex.com since the last issue of the newsletter: You can always browse the previously added VPS companies. | | Five new Forex brokers have been added to EarnForex.com since the last issue of the newsletter: - Binary.com — one of the oldest binary option brokers now offers MT5 Forex trading accounts with 1:100 leverage and $10 minimum size. It is regulated in Malta.
- FP Markets — a regulated Australian FX broker with standard and ECN MT4 accounts. The minimum size for the standard account is $100, and the minimum for ECN is $10,000. Leverage is capped at 1:500 for both account types.
- Fortrade — a regulated UK broker with a proprietary trading platform and $500 account minimum. The fixed spreads are quite high while the maximum leverage for FX trading is 1:200.
- 1Broker — one of the oldest Bitcoin brokers. It is operated by an offshore company. Deposit and withdrawal work only in BTC. Forex trading is provided via a light-weight proprietary web-based platform that offers a maximum leverage of up to 1:200.
- STO — a Cyprus-based broker with two trading platforms — MT4 and AFX FAST. The classic accounts start at $20 and offer Forex trading with 1:500 leverage and moderate spreads. The broker is operated by the parent company of the previously listed AFX Capital broker.
You can always view our full list of Forex brokers. | | There were the following important Forex industry news since the last issue of the newsletter: - We have launched a free Forex course consisting of 92 lessons written by two great FX professionals — Barbara Rockefeller and Vicki Schmelzer.
- Axiory broker added cTrader platform to its selection of trading tools.
- FXFlat, FIBOGroup, and ForexChief added Skrill payment option for deposit and withdrawal.
- Forex Club is now known as Libertex.
| | Until the next newsletter issue! | | That is all for the January issue of the EarnForex.com newsletter. If you have questions, comments or just want to see something else in the next monthly issue, please let us know. | | |
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