Get ready for a wild ride.
Traders should brace themselves for a wild ride over the next couple of days as the US Federal Reserve, Bank of England and European Central Banks are all reporting for the last time in 2017. You can also add into the mix a speech from the Bank of Japan, Reserve Bank of Australia and Bank of Canada Governors, UK unemployment and weekly earnings figures, the Australian unemployment rate, US inflation and retail sales data and China industrial production numbers. Volatility will be high and the potential for price action to whipsaw back and forth is likely so it is very important that any trades you have in the market are managed appropriately from a risk standpoint. From my experience the coming few days is when many novice traders dust a lot of money trying to chase price only to see it swing back in the other direction and take them out. You must be clear and decisive with your decision making and ensure you are focusing first and foremost on risk management and are not correlated with multiple trades.
The high impacting news on Tuesday was focused in Europe with UK inflation data and European economic sentiment surveys. UK Inflation data beat the market’s estimates but failed to fire the pound higher and the economic sentiment survey for Euro Zone wasn’t solely the reason why we saw weakness in the Euro, it was more to do with the fact many traders elected to buy US Dollars leading into the US Fed’s statement on Thursday morning. Traders are expecting the US Fed to raise the official cash rate by 0.25% tomorrow morning and this is 100% priced into the US Dollar. What is not priced in is the expectation of how many times the Fed will raise rates in 2018 and this is what will move the greenback when the statement is released. The US Fed will release its Dot Plot Survey which will tell the market how many times it expects to lift the official cash rate in 2018. The market is expecting two or three however if the Fed says three or more then the US Dollar would highly likely rally. The Bank of England and European Central Bank don’t report until Thursday evening and we will discuss what they may do tomorrow morning along with a full wrap up of what the US Fed told markets.
Bitcoin in my personal opinion is a modern-day version of Bartercard and I wanted to share an interview with you that was conducted by CNN and Jordan Belfort The Wolf of Wall Street. Love him or hate him what he says in this video, in my opinion, makes absolute sense. It’s the second video down from the top when you get to the CNN web page.
I have never said that Bitcoin doesn’t have the potential to rise in value, but what I will say is that millions of mum and dad investors are going to get incredibly burnt when the Bitcoin bubble bursts. Tulip mania has gripped Bitcoin so buyer beware.
About the Author: Andrew Barnett
Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular key-note speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).
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