EIP-1559 – WHAT THE FORK ?

The idea for EIP-1559 came about in 2017/2018, however this was rather dismissed with not a lot of developers working on it. ” The community just kind of sat on it for a year, a few people recognised its importance.” said Vitalik Buterin, co-founder of Ethereum. We have now seen a huge rally towards this new Ethereum Improvement Proposal (EIP) being implemented, forever changing the current transaction fee models.

Before going over this new hard fork, let’s look at the current model.

Source: https://etherscan.io/gastracker

Prior to EIP-1559, Ethereum used an auction based model to decide on the price of transaction fees. This means that the more you’re willing to pay in gas fees, the quicker the transaction will be approved. Miners prioritise transactions with the highest bidders when deciding which transaction to include in the next block, thus effecting transaction execution. At the time of writing, the average gas price is 42 Gwei as you can see above. We can also see the confirmation time (secs) correlated to the gas price as well as estimated costs of interactions with DeFi protocols such as Uniswap.

Sources: https://duneanalytics.com/kroeger0x/gas-prices

One of the biggest problems with this model, is the unpredictability of gas fees. Users can’t plan for large fluctuations in the gas price, essentially guessing what miners will accept into the next block. Unless of course, you are staying up to date with every single NFT release/auction and have knowledge of the current bidding behaviour amongst users of the network.

Extensions like GasNow as well as browser wallets such as Metamask will provide rough estimates of the gas price, however not accounting for said bidding behaviour. If you use too little gas, your transaction may fail as well as if you bid too high, you may be overpaying for the transaction, in which case, the excess gas is not refunded. This can be frustrating, providing a bad UX and it is a lot of guess work for the everyday user.

Source: GasNow Extension

It is also important to note that there is no value accrual to Ethereum’s network, all the fees go to miners. EIP-1559 aims to solve these issues along with a few other improvements. With this implemented, a transaction requires three key pieces of information:

  • Base Fee amount
  • Priority Fee amount
  • Max Fee amount

The base fee is set by the network and is the minimum fee to get included into a block. This fee is always burnt.

The priority fee is also known as the miner tip. This is set by the user and paid directly to miners to incentivise faster processing.

The max fee is the most a user is willing to spend on a single transaction. Overbidding is no longer a problem as transactions can be guaranteed.

Max fee – (Base fee + Priority fee) = refunded to the user.

WILL ETH BECOME DEFLATIONARY?

It depends … Under the current Proof of Work, base fees of roughly 100-150 Gwei would need to be sustained to offset the supply issuance. Once we have the merge and transition to Proof of Stake, base fees of roughly 20 Gwei would need to be sustained to offset supply issuance. In our opinion, it is not likely we sustain these gas prices during PoW with the exception of NFT drops where gas can jump as high as 1500.

Source: https://ultrasound.money/

Above, we have the EIP-1559 London burn as well as the ETA for the merge & removal of PoW. Using the gas fee of 42 Gwei mentioned earlier, we can see that once Proof of Stake is implemented, ETH will in fact become deflationary. At an average gas price of 42 Gwei, the network will burn 4,200 ETH/Day.

Let’s assume the network is congested & gas fees are around 150 gwei as displayed below. The curve begins to flatten aggressively lowering supply, thus increasing scarcity. Once the merge is implemented (date TBA), this is when ETH truly becomes deflationary.

Source: https://ultrasound.money/

Another improvement is the adaptive block size which could help with scalability. Prior to EIP-1559, block sizes stayed the same and in the event that there is a sudden increase in demand, gas prices increase. After EIP-1559, the gas fees for that block are already determined, and should demand increase, the block size can expand and vice versa. This helps smooth out gas price volatility.

TL;DR : In summary, the benefits of EIP-1559 are:

  • The ETH network benefits from higher transaction volumes as these base fees are burnt, making Ethereum deflationary.
  • Adaptive block sizes can account for unexpected high demand across individual blocks.
  • Better UX as users can estimate gas costs & are refunded on overbidding gas prices.
  • Network security is advanced and helps prevent spam attacks against the network.
  • Potentially lower gas fees.
Source: https://ultrasound.money/

EIP-1559 will be implemented tomorrow on the 5th of August 2021 12:50 UTC. The activation of EIP-1559 is a major milestone for the Ethereum ecosystem and could be the beginning of “Ultra Sound Money” as we see more ETH being destroyed than created.

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INDICES MARKET OUTLOOK – 2 AUGUST 2021

With earnings being the main focus of July, we saw US Indices retreat from their new all time highs as FAANG earnings surprised many investors. Last week saw the NASDAQ, Dow Jones and S&P500 close at -0.84%, -0.12% and -0.10% respectively.

FAANG companies made an effort to warn investors about slow growth rates as well as lower margins due to economic activity slowly going back to normal. This, in addition to the Delta variant being responsible for 92% of new COVID cases reported, has investors nervous as the labour market recovery continues to be hindered. This brings our focus to Non-Farm Payrolls on Friday.

EARNINGS RESULTS JULY 2021

With August being known as a dry month in terms of volume and liquidity, this week’s risk events will be closely monitored as it could provide some clue as to where we could be heading. Obviously this week’s main focus will be NFP, but we also have Initial Jobless Claims and Unemployment Rate on Thursday and Friday respectively. Last week’s jobless claims data disappointed investors as it still shows a fragile rebound in the labour market and may strengthen the Fed’s Dovish stance.

FUNDAMENTALS FOR THE WEEK AHEAD

Technically, NASDAQ continues to make new all time highs every week. We saw the slight pullback on Friday on the back of FAANG earnings surprising investors. The bigger picture on NAS still shows upside however. While a technical pullback is still possible, we would need a fundamental catalyst to swing price in a certain direction. Since NASDAQ is still trading at new highs, it has almost no levels of resistance going forward. This week will most likely see investors adopting the “Buy The Dip” mentality, buying up any retracements. A break and closure above the previous highs around the $15 150 region could constitute continued bullish momentum until profit taking occurs.

NASDAQ 4 HOUR TIMEFRAME

The Dow Jones has been range locked for the last week, struggling to choose a true direction from that psychological level of $35 000. Fundamentally, the Dow has room to rise with banks and infrastructure being in focus and finally showing growth. A “Buy the Dip” mentality can adopted here as well as we await any retracements on the Dow to potentially take price higher. The psychological region of $34 500 looks very favourable as it lines up with our 50% Fib retracement region. Be weary of manipulation spikes down into $34 250 potentially.

DOW JONES 4 HOUR TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

INDICES MARKET OUTLOOK – 26 JULY 2021

The Corona Virus Delta variant has brought fear to the equity markets for the last two weeks but that seems to be fading away once again as we saw the “Buy The Dip” mentality kick in last week with the equity market closing at new all time highs. NASDAQ and the Dow Jones closed +2.88% and +0.99% respectively.

There will be lots for traders to look out for this week on the micro and macro level as we have earnings being released as well as the Fed’s Interest Rate Decision and the US GDP. Investors will be keeping their eyes peeled for earnings reports as major technology companies such as Facebook, Amazon, Apple, Google and Microsoft are releasing their Q2 reports this week. Earnings optimism means margin for error is thin and the technology pandemic winners may see their revenue growth start slowing down due to the resumption of normal activity and the economy reopening. But on the other hand, should Q2 earnings beat their estimations, this could be the fundamental catalyst to send US equities prices even higher.

Q2 EARNINGS CALENDAR

Traders will also be listening in on the Fed’s Interest Rate Decision and the GDP on Wednesday and Thursday respectively. The Interest Rate is expected to stay unchanged but investors will be looking to gauge the pace of Fed tapering and potential adjustments to the pace of asset purchases.

FUNDAMENTALS FOR THE WEEK AHEAD

Since we have seen “Buy The Dip” mentality applied last week, NASDAQ has been on a continued bull run closing last week out at almost +3%. Volume might be weak leading up to Wednesday as investors will not expose themselves to too much risk before the Interest Rate Decision and as everyone waits for the Earnings reports. Since we are at all time highs, we could see some profit taking occur which would come in the form of a technical pullback. Should this happen, we can expect pullbacks into and around the $14 750 region before continued upside targeting $15 250. Should we see earnings beat their estimates, this will most likely result in upside on NASDAQ.

NASDAQ 4 HOUR TIMEFRAME

At the time of writing, the Dow Jones has once again managed to pierce that $35 000 psychological level but just doesn’t seem to have the buying pressure to break it and leave it behind. This will be the third time the Dow tests this level since May. Should we see market wide profit taking occur, this could also result in a technical pullback on the Dow potentially eyeing that $34 500 level once more before managing to break that psychological level of $35 000 to the upside with $35 500 being the next target.

DOW JONES 4 HOUR TIMEFRAME

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INDICES MARKET OUTLOOK – 19 JULY 2021

The Dow Jones, NASDAQ and S&P500 all closed the week out negatively at -0.58%, -0.97% and -0.99% respectively. With Jerome Powell and Inflation talk taking the spotlight last week, investors will be eyeing financial statements as earnings season is once again upon us.

Last week saw a lot of risk events with Jerome Powell’s speech at Capitol Hill taking the spotlight. The Fed Chairman used his two days to explain why the Fed will be retaining its dovish outlook. This in turn sent Yields lower as investors flocked to safety in the form of Treasury Bonds. At the time of writing, the 10 Year Yield curve is below 1.3%. Should we see continued downside on the curve, this could be the catalyst to send stocks even higher.

10 YEAR TREASURY YIELD CURVE DAILY TIMEFRAME

The current theme within the market for the weeks ahead will be earnings season. This week sees the likes of Twitter, IBM, Netflix and Intel reporting which could definitely bring some volume and volatility to NASDAQ.

This week sees the economic docket for the US slow down slightly as we have Crude Oil Inventories on Wednesday. Investors will be eyeing this in light of the recent OPEC meetings which took place as well as the Delta variant weighing on market mood. Thursday also brings Initial Jobless Claims to print as we continually try to gauge the employment rate in the US.

FUNDAMENTALS FOR THE WEEK AHEAD
EARNINGS CALENDAR

Technically, we have seen some bearish momentum for the first time in a while on NASDAQ which is perfectly normal in the bigger picture. Last week saw price printing a form of an evening star at All Time Highs before last week Friday continued that momentum and broke the ascending trendline. Price is currently falling into our deepest Fib retracement levels which could provide decent risk to reward setups. Should price break below the $14 550 handle, this would invalidate longs for the time being and would look to see what happens around the psychological level of $14 500.

NASDAQ DAILY TIMEFRAME

After taking a beating last week, the Dow has found a form of support around the psychological level of $34 500. Price is slowly approaching the ascending trendline which could provide a form of dynamic support sending price higher. If not, we have the Fib retracement levels in line with previous support to look for potential long positions. Once again, a break below the 100% Fib level would invalidate my long bias with $34 000 being the next area of interest.

DOW JONES 4 HOUR TIMEFRAME

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INDICES MARKET OUTLOOK – 12 JULY 2021

The Dow Jones, NASDAQ and S&P500 closed the week out at +0.3%, +0.76% and +1.13% respectively. Delta variant or Summer Doldrums?

Investors are anticipating a strong earnings season on the back of positive recent economic data releases. This in turn boosted market sentiment which sent the US 10 Year Treasury Yields lower last week. Yields dropped from the 1.4% region down into the 1.3% region before retracing slightly on Friday. This drop reflects that reflation hopes are on and there is a reduced demand for safety within the market (Yields are normally considered a “safer” investment than the stock market). Although the Covid 19 Delta variant has provided a slight speedbump in vaccine rollouts and new cases, economic recovery seems to be gaining pace. According to Factset, more blue chip companies are reporting a positive EPS (Earnings Per Share) guidance which is pointing towards the predicted strong earnings season.

US 10 YEAR TREASURY YIELDS

In terms of risk events this week, Tuesday brings us the CPI release. This is one of the favoured data points used to gauge inflation. This week’s main event will be Wednesday and Thursday as Jerome Powell will be delivering his Fed speech. As usual, Initial Jobless Claims as well as Retail Sales on Thursday and Friday will bring some volume and movement to the market.

FUNDAMENTALS FOR THE WEEK AHEAD

Technically, the Dow Jones has been ranging leading up to earnings season. Over the past few weeks, we’ve seen the Dow Jones form a Triple Top formation as price has not managed to break and clear the $34 900 handle showing sellers could be slowly taking control. This in turn could lead to downside in price in the week to come with targets being around the $34 150 region which is last week’s low respectively. Should price somehow manage to break this level of resistance at $34 900 (triple top formation), we could see new highs being printed on the Dow.

DOW JONES DAILY TIMEFRAME

NASDAQ has simply continued its bull run as investors are attracted to technology stocks during these kinds of market conditions. Last week saw a decline in price but we saw the “Buy the Dip” mentality adopted as price slowly grinded its way back up into the highs. Should the Prior Week High hold as resistance, we can expect a pullback perhaps into the ascending trendline to continually take price higher as NASDAQ targets that $15 000 region. A break below the Prior Week Low is not likely, but should it come to fruition, that could spark interest of a stock market reset just before earnings season.

NASDAQ 4 HOUR TIMEFRAME

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INDICES OUTLOOK – 5 JULY 2021

The tech-heavy NASDAQ and Dow Jones closed out last week at +2.57% and +0.75% respectively. Could the rotation from value stocks back into technology be on the cards again?

Traders were waiting in anticipation for Non-Farm Payrolls data last week Friday where we saw the actual beating out the forecasted 700k which strengthened the prospects of a US economic recovery which in turn boosted market sentiment sending stocks higher. Friday, however, also brought us the US Unemployment Rate which came in higher than the expected sending the Dollar on a short term pullback.

In terms of risk events this week, investors will be eyeing PMI data being released on Tuesday to gauge post-pandemic manufacturing levels. Jobless Claims hit the print on Thursday to continually gauge unemployment levels and the Fed will be delivering their Monetary Policy report on Friday.

FUNDAMENTALS FOR THE WEEK AHEAD

An important correlation going forward with earnings season once again approaching will be the Treasury Yield Curve. A hawkish shift in the Fed’s policy stance could flatten the yield curve which would in turn send technology stocks higher. The flattening yield curve makes tech stocks look more appealing when front-end borrowing costs rise faster than the longer-end rates.

This leaves the Dow Jones more vulnerable to a rapid rise in near-term rates. Companies like McDonald’s, 3M and Coca-Cola will be affected as higher short-end borrowing costs make these dividend-paying stocks look less attractive during an ultra low interest rate era. Looking at the chart below, we can see the Yield curve has been flattening creating Lower Lows and Lower Highs underpinning bearish momentum. Should 1.5% hold as resistance going forward, this could be the catalyst for the rotation to start.

10 TREASURY YIELD CURVE DAILY TIMEFRAME

Looking at NASDAQ technically, most of its momentum has been due to investors pricing in optimism for the upcoming earnings season due to a decent economic data releases showing a slow recovery within the US economy. With the reflation trade put on pause, the rotation back into tech might mean NAS takes back the crown of the leading US index.

At the time of writing, NAS looks to be pulling back slightly after once again making a new ATH last week. With price trading so high, we can expect a technical correction to take place before seeing a new leg to the highs. For the week going forward, we will be waiting for price to fall into one of our Fibonacci retracement levels in line with a previous level of resistance turned support. An interesting inflection point is around the Aspire Profit Pocket which lines up with the psychological level of $14 500 as well as the 50 Day Exponential Moving Average to act as dynamic support to potentially take price into the $14 800 region. A break below the $14 500 level would constitute short term bearish momentum with price then potentially targeting the Prior Weekly Low around $13 350.

NASDAQ 4 HOUR TIMEFRAME

Looking at the Dow, it has been on a bull run since price collapsed during June with the flattening of the yield curve. Since price is bullish, creating Higher Highs and Higher Lows, the bias still remains long. For the week ahead, pullbacks into one of our Fib retracement levels could provide high risk to reward positions should this momentum continue. Should price manage to break below our most previous swing low ($34 150 region), that could be our first clue into a potential reversal back into the downside invalidating long positions.

DOW JONES 4 HOUR TIMEFRAME

As always traders, exercise healthy risk management and we hope you have a fantastic trading week ahead. For more updates like the one above, subscribe to our blog for instant updates to your mail or join our Telegram Trading Floor via our website at http://www.aspirefx.co.za.

INDICES MARKET OUTLOOK – 28 JUNE 2021

The US indices market enjoyed quite a green week as the they recovered following the Fed’s Interest Rate Decision on the 16th of June. The Dow Jones, NASDAQ and S&P closed +3.44%, +2.35% and +2.74% respectively.

Last week’s theme was mainly the results of the Core PCE (The Fed’s preferable measure of inflation) which came in at 3.4%. This is the highest level seen since 1992 as raw materials and labour costs surged on the back of pent-up demand for goods and services. This data figure could result in investors pricing in full confidence of a rate hike as early as next year.

This week, traders will be eyeing NFP data on Friday as it looks to spark some volume in the market as well as provide some insight on the taper talk taking place within the Fed. Forecasts are expecting 700k jobs to be added. Average hourly earnings are also expected to rise from 2% to 3.6% Y.O.Y. A strong outcome in the latter could bring forward Fed tapering bets. Thursday also brings Initial Jobless Claims as well as ISM Manufacturing PMI which will continue to help investors gauge the progress of employment within the economy as well as supply and demand.

FUNDAMENTALS FOR THE WEEK AHEAD

An interesting theme to keep an eye on is that of value stocks (Dow Jones) losing their shine as Treasury Yields continue to slide lower. Earlier this year, rising yields were against Tech stocks with stretched evaluations, but this seems to have flipped again in favour of the tech sector which could leave the Dow susceptible to weakness in the weeks ahead. Looking at the 10 Year Treasury Yield, the 1.6% handle looks like it will provide insight into where the curve could be heading going forward.

US 10 YEAR TREASURY YIELDS DAILY TIMEFRAME

Looking at NASDAQ technically, we saw a slight pullback in the tech sector due to Tesla announcing a recall of 285k vehicles in China due to safety issues concerning its driving software. Other than that, NASDAQ has continued its grind upwards eventually creating a high around the $14 435 region last week. Pullbacks in the tech-heavy index are bound to take place after the bullish week we saw last week. Should the current high hold, the first point of interest is around the $14 200 region which is the 50% Fibonacci retracement level in line with an area of resistance turned potential support. Further pullbacks into the psychological level of $14 000 will bring the 78.6% fib retracement level into play as well as the ascending trendline stemming from lows printed throughout June. Bullish reversals around these regions could provide high risk to reward positions targeting the $14 550 region. Any break and closure below the Prior Week Low would invalidate this bullish momentum.

NASDAQ 4 HOUR TIMEFRAME

The Dow is at a very interesting level of price action. Price has slowly climbed into the descending trendline stemming from highs created in May and June respectively. At the time of writing, price is trading around the 78.6% Fibonacci retracement level. Bearish reversals around this region could open up the door for further downside on the Dow targeting $32 550 potentially. Be weary of manipulation spikes into the $34 750/34 650 region. A break above the previous high around $34 850 would invalidate this setup and would most likely lead to new highs being seen on the Dow.

DOW JONES DAILY TIMEFRAME

As always traders, we hope you have a fantastic trading week ahead & always exercise healthy risk management. For more updates like the one above, subscribe to our blog for instant updates to your mail.

INDICES MARKET OUTLOOK – 21 JUNE 2021

The Dow Jones, NASDAQ and S&P500 closed the week at -3.45%, +0.37% and -1.91% respectively, as we saw a large influx of volatility due to the Fed bringing forward their interest rate hike projections.

Last week Wednesday brought traders the US Interest Rate Decision in which the Fed laid out their plan of two rate hikes by the end of 2023, which was more hawkish than expected and in turn led to huge strength in the DXY. The Dow and S&P retreated on Friday on the back of St. Louis Fed President, James Bullard, making comments which raised more fear about Fed rate hikes.

DXY DAILY TIMEFRAME

The 10 Year Yields flattened as well showing us the retreat in reflation bets as traders are trying to price in the possibility of a rate hike in 2022. After a spike into the 1.6% region following the interest rate decision, Yields have fallen back into the 1.4% region for the first time since March 2021. Should bearish price action continue on Yields, we could see the rotation out of blue chip companies and back into tech i.e NASDAQ.

10 YEAR YIELDS DAILY TIMEFRAME

In terms of risk events this week, the two main events everyone will be focusing on mainly is Core PCE on Friday (This is the Fed’s preferred gauge of inflation) as well as Jerome Powell’s speech on Tuesday. These two events have the potential to sway the threat of Fed tapering. Thursday also brings us Initial Jobless Claims which will help traders keep track of job recovery within the economy.

FUNDAMENTALS FOR THE WEEK AHEAD

Technically, NASDAQ is still printing bullish price action as it continues to keep printing new highs. With price being bullish, the bias remains with long positions until a break of structure presents itself. For the week going forward, immediate areas of potential support comes in the form of our Fibonacci retracement zones. Specifically the 78.6% which lines up with a liquidity zone stemming from highs created in February as well as the ascending trendline line which could also offer a form of dynamic support. Breaks below the Prior Week Low would invalidate our setups as this would be a break of structure.

NASDAQ 4H TIMEFRAME

As mentioned in last week’s blog, $34 450 was an important area for the Dow Jones. A break below signaled potential downside on the blue chip index. With the flattening of the Yield curve sending tech stocks higher, we saw the inverse on the Dow as price collapsed around 14 000 pips over the course of last week. Currently, NASDAQ and the Dow having its strongest inverse correlation since June 2017. With price being in a bearish market structure, the bias going forward will be shorts as we wait for pullbacks in price to potentially go lower. At Aspire, we will be sitting on our hands until price reaches the psychological level of $34 000 again to sport potential reversals.

DOW JONES 4 HOUR TIMEFRAME

As always traders, we hope you have a fantastic trading week ahead & always exercise healthy risk management. For more updates like the one above, subscribe to our blog for instant updates to your mail.

INDICES MARKET OUTLOOK – 14 JUNE 2021

If you were away from your trading station last week, you did not miss much as we saw last week provide some of the tightest trading ranges in the market post-pandemic with the Dow Jones, Nasdaq and S&P500 closing -1%, +1.6% and +0.34% respectively for the week.

Last week also saw the US 10 Year Treasury Yields falling below and properly clearing the 1.5% region for the first time since the initial pump during March. A simple definition of Treasury Yields is the return on investment on the U.S government’s debt obligations. It is expressed as a percentage. Treasury Yields affect the interest rates that individuals and businesses pay for various goods and services. Treasury Yields also tell us how investors feel about the economy. Since yields have declined, the stock market has climbed since the returns appear more profitable in current market conditions. Investors will be looking at this drop in yields as a potential calming method to potential tapering of Fed stimulus.

US 10 YEAR YIELDS 4 HOUR TIMEFRAME

With the drop in the 10 Year Yields, we also saw a decline in VIX (Fear Gauge) which suggests that market sentiment is positive since there is less fear in the market. This still leaves the market vulnerable to risk events. Tuesday brings us Retail Sales as well PPI as investors continue to gauge at the rate of economic growth within the US. Everyone has their eyes set on Wednesday as we see the US Interest Rate Decision as well as FOMC Statements being made. This will provide us with much needed insight from the Fed on the Central Bank’s planned policy path and might help settle the taper tantrum and transitionary inflation debate once and for all. Then lastly Thursday brings us Initial Jobless Claims which will show us if the US job market continues to recover post-pandemic. 

FUNDAMENTALS FOR THE WEEK AHEAD

Technically, the NASDAQ is trading near current All Time Highs as we saw bullish momentum last week following the decline in US 10 Year Yields. With price being bullish, the simple plan of action is to wait for the next Higher Low (HL) to be printed to execute potential Long positions. Key areas to keep an eye on is the $13 900 region which is a liquidity zone stemming from highs created in February 2021 as well as the ascending trendline plotted from lows created in May and June respectively. A clear break and retest of the All Time High could however open up the door for even further upside.

NASDAQ 4 HOUR TIMEFRAME

The Dow has been trading in quite a tight range for the past week suggesting the Summer Doldrums might be starting early as volume and volatility continues to dry up. At the time of writing, price is currently trading around the psychological level of $34 500. This week’s main area of importance will be within the liquidity region of $34 450. If we look left we can see price has moved rapidly when it has previously come into this region. Should $34 450 hold as support, this could open up room for bullish momentum on the Dow taking us into the descending trendline which could act as dynamic resistance. A break below $34 450 will change our bias to downside with our first target being in the $33 000 region. 

DOW JONES 4 HOUR TIMEFRAME

As always traders, we hope you have a fantastic trading week ahead & always exercise healthy risk management. For more updates like the one above, subscribe to our blog for instant updates to your mail.

USD/JPY – UPSIDE CALLED BY ASPIREFX

In today’s article we are going to be covering USD/JPY and the long position taken by us and our students here at AspireFX. 

USD/JPY DAILY

As you can see in the above picture, we have highlighted this weeks price action. This is to give you a clear understanding of the price action we had available to us at the start of the week and to show you how we decided to gain our long positions. 

As indicated, we can see price had a sharp decline on 23rd April, creating a new lower low. After this, price failed to continue in a descending manner as we created a lower high, but this was followed by a higher low, indicating that the bears within the market were struggling to stay in control.

From this point in time, we knew buys were a huge possibility but we needed more confirmation and as you can see, very quickly after creating the higher low for the first time, price left 3 wicks into the psychological level of 108.500 before we continued upwards to create a new high. Once the new high was printed, this confirmed a bullish structure for us and we knew we needed a pullback to gain entry and it was just a matter of time. 

USD/JPY 4H

Looking at the 4H timeframe above, we placed our fibs from the higher low to the new high created and awaited a pullback. In the picture above, you can see an inner and an outer trendline. AspireFx originally gained our entry on the inner trendline and the 61.8% Fib level, however we went into some drawdown with our entry being at 108.850 as USDJPY had a slightly deeper push into the 78.6% Fib level before making the move to the upside.

USD/JPY CURRENT PRICE

The above image is how the trade is running as of right now. USDJPY is up 100 pips since the call we made in our Telegram group with us targeting the area of 110.000 – 110.200 giving us a total profit of about 130 pips on this trade. 

NEXT WEEK MONDAY’S FUNDAMENTALS

Above we can see the fundamentals for next week Monday. With it being a bank holiday in the US we might look to close our positions and not hold them over the weekend but this is something we will let our students know. We also have JPY retail sales coming in which previously came in lower than expected to if this happens again it could be the catalyst to hit our TP if its not hit before then.

If any of the analysis used in the above article interests you or if you are interested in becoming a member of our telegram group please don’t hesitate to contact us via email ( info@aspireinv.co.za ) or DM our Instagram page directly ( @Aspireinv_fx ) and we will assist you in getting your journey to become a profitable trader started. 

We hope you enjoyed the read and have a great weekend!