EarnForex.com Monthly Newsletter
| | | | Welcome to the latest issue of EarnForex.com newsletter — June 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: Impulsive Trading 🎁 | | How many times did I read some analytical post or a trading idea with a strong thought coming into my mind: "I should trade it! As soon as possible!" And how many times did I regret actually following on that thought and losing money to an impulsive trade! Usually, it happens so that you read something that resonates with your own expectations, but the most of that resonance happens on the emotional layer, not on the rational one. Then, as the emotion is strong and "your own" thought is very persuasive, you jump into a trade without doing all the necessary analysis, double-checking, and due diligence you normally perform before trading. The result might be a win, which would be OK, though it would reinforce wrong habits (not doing a proper analysis before a trade), but more often than not it would be a loss, which would make you feel sorry. Not only that, but it would lower the confidence in your own trading skills despite the fact that the trade had nothing to do with your own ability to deal with the market. It was just a random impulsive trade. So how can you avoid such behavior in your trading? Of course, you could force yourself to be rational and try to remove emotions from all your trading decisions, but that rarely works easily. At least, it does not work instantly and requires a lot of practice. The simplest way is to use an entry checklist. A basic checklist contains all the important points that helps you differentiate between an emotionally pumped trade and a rational trading decision. The good thing about a checklist is that you can further alter it to fit your own trading style, personality, and the strategy's nuances. | | Overview of the major currency pairs' performance in May | | EUR/USD — rallied strongly in May except for a few days after the first and after the third week of the month. It was at the maximum at 1.1268 on May 23, at its minimum at 1.0839 on May 11, finishing the month at 1.1242. GBP/USD — moved mostly sideways with a slight bearish bias. The highest monthly rate was at 1.3047 on May 18, while the lowest — at 1.2769 on May 31. GBP/USD finished May trading at 1.2889. USD/JPY — after the initial rally during the first week of May, the currency pair fell abruptly and continued sideways. The pair rose to as high as 114.36 on May 11, reaching a bottom at 110.23 on May 18 and closing the month with the 110.77 rate. EUR/JPY — rallied strongly at first but then entered a period of very high volatility and up and down spikes. The monthly high was at 125.81 on May 16, the monthly low — at 121.31 on May 1. Trading ended at 124.53 for this currency pair. GBP/JPY — rose during the first week of May but then entered a strong downtrend. The maximum level for this pair was 148.10 on May 10, while the minimum — 141.47 on May 31. The month's trading ended at 142.76 for GBP/JPY. | | Fundamental background of the past month | | The US dollar started May soft, having muted reaction to good nonfarm payrolls. Weak inflation and retail sales data hurt the currency further, though the more pressing concern was US President Donald Trump and the controversies surrounding him. Policy statement released by the Federal Reserve was perceived to be dovish by many market participants, but in truth it had something both for the doves and for the hawks. Nevertheless, anticipation of the June interest rate hike was the main supporting factor for the greenback. The euro welcomed the victory of Emmanuel Macron in the French presidential elections. Mario Draghi, President of European Central Bank, damaged the currency by his comments, which were defending the central bank's extremely loose monetary policy. That did not prevent speculations that European policy makers will be discussing stimulus exit at the June policy meeting. The Great Britain pound had troubles establishing a clear trend in May as the Brexit and associated uncertainty remained a major factor in determining the currency's performance. The sterling was also relying on the so-called Super Thursday to determine its near-term performance, and it turned out to be very bad for the currency. The coming general election in June was another very important factor for the pound as UK Prime Minister Theresa May was hoping that the voting will result in a stronger government, which would help her in Brexit negotiations with the European Union. But opinion polls showed that the opposite can be true, and the elections may result in a hung parliament, though not all polls agreed on that. The Japanese yen was swinging back and forth in May, depending on whether the market sentiment was good or bad. The Canadian dollar started the month very poorly due to concerns about trade relationships between the United States and Canada. The loonie was following crude oil prices for the most part, sometimes even ignoring domestic fundamentals. As for other factors affecting the currency, amid negative ones was the downgrade of six Canadian banks by Moody's Investor Service. As for the positive ones, the Bank of Canada policy statement sounded not as dovish as traders were expecting. The Australian dollar gained after the policy meeting of the Reserve Bank of Australia, though poor macroeconomic data and comments from the central bank's chief did not allow the currency to go far up. The Aussie, being a commodity currency, followed moves of crude oil from time to time, though not as closely as the Canadian dollar as Australia does not export crude. The New Zealand dollar was surprisingly strong in May as domestic economic data allowed the currency to weather the negative external factors, be it a drop of crude oil or the first downgrade of China's credit rating by Moody's in almost three decades. As for news from New Zealand itself, the Reserve Bank of New Zealand was not as hawkish in its policy statement as was expected, hurting the currency, but the central bank was still optimistic about the outlook for the nation's economy. Gold logged the fifth monthly gain in a row, though it was a minor one. The precious metal reacted to news from the United States in the opposite manner to the US dollar, falling when news was good and rising after bad news. Gold was also gaining when risk aversion prevailed in markets, which was not a rare occurrence with North Korea flexing muscles. | | Interest rate changes in May | | Chile | 2.75% | -0.25% | 2.50% | | Iceland | 6.75% | -0.25% | 6.50% | | Mexico | 6.50% | +0.25% | 6.75% | | Russian Federation | 9.75% | -0.50% | 9.25% | You can see the current interest rates by the world's central banks in our interest rate table. | | Top five Forex brokers of the last month | | Three new Forex guides has been published on EarnForex.com since the last issue of the newsletter: You can always browse the previously uploaded guides. | | There were the following important Forex industry news since the last issue of the newsletter: - CySEC has announced that the clients of the defunct COMMEXFX Forex broker can now submit claims against the company to collect compensation from the Compensation Fund for Clients of Investment Firms.
- The CySEC license of Lucro Capital Ltd., the parent company of HiWayFX broker, has lapsed as the company had renounced its authorization on April 27, 2017.
- Some Forex brokers began introducing a wider range of cryptocurrency trading instruments to traders. Namely, you can now trade Bitcoin, Ethereum, and some other cryptos with Binary.com, eToro, and AvaTrade.
- MFX Broker has turned a complete scam as its the Georgian authorities declare a manhunt on the company's owners who appear to be on the run after defrauding thousands of traders.
- CFTC took Tallinex Forex broker to court for accepting deposits from the US traders without obtaining a proper authorization from CFTC and NFA.
| | Until the next newsletter issue! | | That is all for the June 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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