APRIL - JUNE 2015

TRADER MAGAZINE

GOLD FIXHISTORY

F INA N CI A L LOSS TRAUMA

next stopGrexodus ?

POLITICAL RISKS AND POSSIBILITIES OF GREECE’S EXIT FROM THE EURO AREA

GBPUK ELECTIONIMPLICATIONS

NOK3 MONTHSOUTLOOK

T E C H N I C A L A N A L Y S I S S T R AT E G I E S

FXCONTENTs

WHAT THE FUTURE HOLDS FOR THE POUND STERLING

What traders should expect in the next 18 months

18

Using Bollinger Band and Stochastic along

with Price Action

2507 Editor’s note

FUNDAMENTAL ANALYSIS36 �e 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 COACH11 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:

further weakening expected within the 3 months horizon

TECHNICAL ANALYSIS47 Trading Candlestick Patterns With Moving Averages

TRADING METHOD:14 How Time Consuming is Forex Trading? Techniques and tools to produce a much more time-e�cient and productive approach to trading.

54 How to pro�t from news trading without being psychic: learn to play news release odds in your favour

TRADING PSYCHOLOGY:51 Psychological Trauma �rough Financial Loss: how spectrum therapy can help traders recover from psychological damages

MARKET WATCH58 History of the Currency and Gold Fix: looks at a 96-year daily tradition at

the heart of the FX market

BOOK REVIEW63 Mindful Trading: Mastering Your Emotions and the Inner Game, by Rande Howell

TECHNICAL REPORTS:65 Trends and Targets:Majors US Dollar RateMajor Cross RatesSelected Asian FX RatesFX Emerging Markets

65 Featured Markets: EUR/USD, EUR/GBP, USD/SGD, EUR/PLN

69 CONFERENCES & SEMINARS

INTERNATIONAL DATA70 FX Spot Monitor71 Central Bank Rates72 Economic Data - FX Poll73 Markets View

74 ECONOMIC CALENDAR

TECHNICAL ANALYSIS 31

POLITICAL RISKS IN EUROPE: NEXT STOP GREXODUS?Looks at the risks and possibilities of Greece’s exit from the euro area

FX TRADER MAGAZINE April - June 3

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. �e 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 watered-down 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 di�erent manifestos, even at odds with Syriza’s. �e government’s action would become a struggle if a radical and swi� implementation of reforms were imposed.

by Sergio Capaldi

FX TRADER MAGAZINE April - June 31

FXMACROECONOMICS

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 strateg y 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

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

Economic policy uncerttainty index Source: Datastream

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

MACROECONOMICSFX

32 FX TRADER MAGAZINE January - March 2015