How much real FX liquidity is currently missing from the market?
FX volatility is still with us as liquidity drops due to the virus but what's driving the lower rate of business? This is something we've been talking about in our trading room today. When we talk about FX markets, most of our focus is on large banks and institutions...
Are we at the end of the volatility?
As central banks and governments open the monetary hoses to cushion the economic effects of the Coronavirus, have we now seen the worst of the fear pass, and what trading opportunities are there now? https://youtu.be/pWOuozA4Ljo
Governments and policies adapting to critical known unknown
Fixed Income Research & Macro Strategy from 4X Global We argued in Lack of US market & macro volatility both reassuring and troubling (17 January) that “the market’s willingness to look through domestic political and geopolitical events suggests that only a...
How might Central banks enact FX intervention?
With rising talk about direct Forex intervention, what might central banks do? We like to be ahead of the game at ForexFlow, hence the warning about an increase in intervention talk 30 mins before two CB's started talking about intervention 😉 But, how might that...
Trading through the Coronavirus turmoil
With extreme volatility, central bank and government action, we explain how best to trade through the volatility https://youtu.be/4T7S8PWr3xE
Global growth shaken, central banks stirred
Fixed Income Research & Macro Strategy (FIRMS) from 4X Global Research The drastic measures which governments across the world have taken so far to mitigate the spread of the coronavirus have few precedents outside of war times and therefore quantifying their...
Virus, volatility and valuations
4X Global Research Fixed Income Research & Macro Strategy (FIRMS) – 27 February 2020 In reaction to the coronavirus epidemic governments across the world have enacted measures unprecedented in recent decades, including closing national borders, setting up...
What we’ve got here is an abject lesson in fear trading
These markets aren't trading rationally. If you don't adapt, you'll pay the price Let's start by looking at some numbers. Globally, 1 in 3 people get flu each year, in most cases, it's mild and people don't even know they've got...
Banxico preview – What to look for in tonight’s decision
Banco De Mexico is expected to cut rates by 25bps to 7.0%. Here's a preview from our South & Central American expert Jorge The majority of analysts believe the estimates for inflation will allow BANXICO to continue with decreases in the reference interest rate, in...
Trading idea for a large AUDUSD expiry looks out of reach for now
We at ForexFlow were on watch for a possible trade on a large option expiry A 2.12bn expiry at 0.6700 in AUDUSD caught our trading interest today, mainly because of its unusual make up. It's only been put on since late Jan and has the signs that it's possibly just one...
*Updated 26/02/2020* What are the true economic effects of Coronavirus going to be?
There's lots of generalised chatter on the economic effects of the virus so let's try to put them all together and into a trading perspective *This post has been updated at the bottom. Firstly, let's remember the human implications of this. People are dying and all...
Brazil Central Bank preview – To cut or hold fire?
BCB preview from our resident South American expert Jorge The Monetary Policy Committee (COPOM) first meeting of 2020 and rate currently at 4.5% per year. There is the possibility of a further 0.25 percentage point reduction in the SELIC rate, to 4.25% per year....
Video – How low can AUDUSD go?
In this video I discuss a short trade in AUDUSD Several of the traders in the ForexFlow trading room, as well as myself, put together a strategy for running shorts in this pair, and have been through most of January. Here's a look at how the trade is going and whether...
Trading preview – BOE rate decision on a knife edge
One of the most finely balanced rate announcements in a long time There's something to be said for the BOE voting system, it gives us a bit of excitement. However, the market is very split on this one. Rate odds split - 51/49% cut/hold. We're split in the room. Banks...
What’s got into the Swissy then?
CHF in a world of its own? CHF buying has been steady and persistent all of 2019 really, and the latest selling into the end of 2019 and early this year goes against the general risk picture. While JPY pairs have bounced on the favourable risk picture, the swissy is...
$CNH living on hopium? Big week for the Yuan this.
An outlook on the CNH drivers. #US- #China Phase One to be signed. Reinstatement of semi annual talks with China (outside trade talks), which Trump abolished earlier during his tenure. Expectations for China trade balance to rebound in Dec (out tomorrow). Expectations...
New Year’s, new ideas
A video to kick off trading in 2020 https://youtu.be/yRaxipOL3PY
My GBPUSD long trade was all wrapped for Christmas – Here’s what’s coming in 2020
My long trade from September ended over the holdiday period As we enter 2020 I wanted to update you on my GBPUSD long trade undertaken back in September. This was a trade looking to capture a Brexit deal finally passing UK Parliament, but as usual with the UK, it...
It’s a Friday frenzy in the Forex options expiries
Forex options expiring at the 10am (15.00 GMT) New York cut 20 December 2019 There's some very big expiries going off today, and plenty of them, so I've decided to list them in a full blog post rather than just the Live blog. USDNCH definitely has the most with over...
Let’s be clear, the weakness in GBP isn’t all down to renewed Brexit fears
What's really continuing to drive the pound lower? The main reason why GBPUSD has dropped so swiftly is because it's spent the last 4 months rallying over 1500 pips without so much as a blink. That's a big move in a short space of time without any decent refresh....
Livetrading update: GBP on the blink as the election euphoria wears off
Pound takes a knock as Brexit looms large once again As we've explained many times before, hard and fast rallies can reverse just as hard and fast, if they're not built on strong foundations. Right after the elections, we said if it crumbles, the low 1.32's could be...
What happens to GBP now following Boris’s election win?
Here's what's on the cards for the pound from now As the sun comes up on Boris's victory we need to look at what's in store for the quid now. The first telling move (or lack of) is a failure to follow through this morning. I was looking to see if one came but it...
Your simple guide to the UK election
Here's the easy way to trade the election While the rest of the world try to bamboozle and confuse you with paragraphs of pointless details, drivel and analysis, throwing up maps and lists of seats and what might happen, we at ForexFlow like to take the simple...
A warning for the UK MRP poll everyone is becoming fixated about
GBP traders are zeroing in on the YouGov/Times MRP poll coming tonight. Here's why caution is needed. So, the next big bone to chew for GBP traders is apparently an opinion poll. Why's this one so special? Well, apparently it "predicted" the 2017 election. Let's...
Depressed FX volatility allows for few surprises
Fixed Income Research & Macro Strategy - 4X Global Global FX volatility has fallen further in the past month to its lowest level since September 2014 according to our estimate (see Figure 1). Volatility in most major currencies has either fallen or only increased...
Trading the options action in EURUSD: Part 4 – Profit taken, rinse and repeat?
We've closed the door on our EURUSD strategy with good profit but are we good to go again? If you've been following this EURUSD trade mini-series, you'll know that we've been plotting and planning a trade around an options startegy in play in the wider market. This...
A mildly positive risk market on the open?
The weekend press headlines. Good Sunday evening, Monday morning fellow FX traders. -Give an take a bit of political banter, it seems the weekend got a little better as it progressed from China's political banter at the WTO yesterday into tighter IP protection rules...
Here’s how we at ForexFlow profited from trading the options action in EURUSD
Two weeks ago we heard about an option strategy being played out in EURUSD and so we decided to use that information to put together our own trading strategy Here's a mini series of videos detailing a trading strategy in EURUSD. The three videos over the last two...
Norway says there won’t be car tariffs coming from the US
Norwegian Minister confirms no car tariffs from the US Donald Trump was supposed to announce plans for tariffs on cars across the European continent last week but failed to do so. The market has been waiting to see if there would be any, or whether they would be...
Livetrading update – Setting up a trade for big option plays in EURUSD
There's some big options strategies playing out in EURUSD between now and the end of the year These option plays are mainly in a very tight range and are bracketed by binary and barrier options, which has also created a ton of long gamma that needs to be managed by...
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