US Consumer Confidence Rebounds Unexpectedly, but Fails to Boost US dollar


March U.S. consumer confidence rises to 104.2 from 103.4, topping estimates calling for a decline to 101.00The small rebound in sentiment can be attributed to a moderate recovery in the expectations indexThe U.S. dollar retains a negative bias as markets remain focused on the U.S. banking sector woes and their implications on the Fed’s hiking path

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A popular gauge of U.S. consumer attitudes unexpectedly rebounded in March after two straight months of declines, signaling that Americans are becoming a bit less pessimistic about the outlook despite the recent turmoil in the U.S. banking sector, coupled with persistently high inflation.

According to the Conference Board, consumer confidence climbed to 104.2 in March from an upwardly revised reading of 103.4 in February, topping consensus estimates calling for a retreat to 101.00.

Looking at the survey’s internals, the present situation index, based on the assessment of business and jobs market conditions, eased to 151.1 from 153.00, but the expectations gauge, which tracks short-term prospects for income, the business environment, and employment opportunities, staged a moderate recovery, advancing to 73.0 from 70.4 previously.

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Source: Conference Board

Better-than-expected sentiment numbers suggest that household spending could remain somewhat resilient over the coming months, thanks in part to the solid labor market. In any case, the headline confidence index remains well below levels that are often associated with a healthy and dynamic economy. This may be a sign of economic troubles to come over a longer-term horizon.

The U.S. dollar, as measured by the DXY index, whipsawed after the survey’s results crossed the wires, but retained a negative bias on the session as markets continued to focus on the banking system woes following the collapse of SVB and SBNY.

While expectations remain in flux, many traders believe that the Fed is done hiking and that policymakers will soon pivot to cutting interest rates during the second half of the year to counter tighter credit conditions. If confirmed, this scenario is likely to create headwinds for the U.S. dollar.

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NZD/USD leans bearish in phase of consolidation


NZD/USD is consolidating at the start of the week in mixed risk sentiment. 
Poor performance on crosses suggests the Kiwi is still out of favour.

NZD/USD is flat after falling by 1% last week due to fears of a repeat of the systemic banking crisis that swept through markets in 2008. On the day so far, NZD/USD has traveled between a low of 0.6180 and a high of 0.6211. 

Sentiment, however, remains fragile due to concerns about a global credit crunch. ´´The roller-coaster ride continues, again leaving FX markets fairly untouched. Which begs the question; will NZ’s remoteness to all this deliver NZD strength if the RBNZ can get the OCR to 5¼%? It might, especially if things are wobbly enough to keep the Fed from tightening much more, but not wobbly enough to crash things,´´ analysts at ANZ Bank explained. ´´But poor performance on crosses suggests the Kiwi is still out of favour.´´ 

Elsewhere, a surprisingly large contraction in New Zealand’s growth numbers in Q4 of 2022 came as the RBNZ is still in the process of cooling runaway inflation. The central bank has lifted its policy rate by a total of 450 basis points in ten straight meetings, pushing the cash rate to a 41-year record of 4.75%.

Meanwhile, the IMF chief Kristalina Georgieva said Sunday that 2023 would be another challenging year, with global growth slowing to below 3%, reflecting the impact of pandemic disruptions, the war in Ukraine, and monetary tightening. She added that even with a better outlook for 2024, global GDP will remain below its historic average of 3.8% and the overall outlook remained weak.


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US Dollar (DXY) Subdued, Banks Gain, US Treasury Yields Move Higher

US Dollar (DXY) Price and Chart Analysis

Risk sentiment boosted by SVB takeover deal.US Treasury yields move higher, rate hike expectations remain the same.

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First Citizen Bank announced before the UK market opened this morning that it has taken over the failed US lender Silicon Valley Bank (SVB). First Citizen has bought around $72 billion of SVB’s assets at a discount – with the $90 billion balance held by the Federal Deposit Insurance Corporation (FDIC) – and will take over SVB’s 17 branches. SVB’s failure will cost the FDIC $20 billion.

The banking sector took heart from today’s takeover news with the sector a sea of green. European banks, themselves under pressure after the collapse of Credit Suisse, rose across the board with Deutsche Bank registering a 7% rise after falling by over 10% last Friday on contagion fears.

Deutsche Bank Daily Price Chart

For all market-moving data releases and economic events see the real-time DailyFX Calendar.

The US dollar index is nudging lower as the US markets open. The greenback benefitted from a risk-off bid in recent days, caused by bank contagion fears, so today’s change in sentiment is weighing slightly on the greenback. The dollar is also under pressure from a change in US rate hike expectations with the market now seeing rates unchanged for the rest of Q2 before a rate-cutting cycle starts in Q3. Current expectations are for the Fed to cut rates by 75 basis points this year.


US Treasury yields are moving higher today as demand for safe havens weakens. The yield on the rate-sensitive US 2-year fell from 5.08% on March 9th to a multi-month low of 3.55% last Friday, March 24th, as investors flocked to the safety of Triple AAA US government debt.

US 2-Year US Treasury Daily Yield Chart


The slight shift in risk sentiment has pushed the US dollar lower with the index now trading around the 102.50 level. Ahead this week there is the final look at US Q4 GDP and core PCE inflation data, both of which have the ability to move the US dollar. The dollar index remains below all three moving averages, a negative technical set-up, while the CCI indicator shows the DXY moving out of oversold territory. Friday’s move higher, and today’s early turnover, have broken a series of lower highs and lower lows, leaving the short-term outlook for the greenback mixed.

US Dollar Index (DXY) March 27, 2023


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What is your view on the US Dollar – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1.

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Black Swan Event Meaning

2023.03.27 2023.03.27
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The term ‘black swan’ originates from Latin in the form of an expression “a rare bird on Earth, like a black swan.” For a long time in Europe, people believed that swans other than white did not exist. However, in the 17th century, a population of black swans was discovered in Western Australia, but the black swan event meaning is still used to describe something unlikely. So, what a black swan event is?

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The term ‘black swan’ is used to describe economic, political and social accidents that are inevitable and impossible to predict. This is exactly what Nassim Nicholas Taleb, a former Wall Street trader and the author of the black swan theory, calls them. 

At the same time, the author understands that the concept of “black swan” applies not only to negative unpredictable events. Among the positive changes of the same rank, Nassim Nicholas Taleb named major scientific discoveries, the emergence of personal computers and the Internet. 

A grey swan event is a term used to describe a highly unpredictable but plausible event that can have significant consequences. Unlike black swan events, which are highly improbable and unexpected, grey swan events can be anticipated to some extent. In the world of finance and investing, grey swan events can have a major impact on investment portfolios and strategies. 

It is important for investors to consider the potential impact of a grey swan event and develop an investing strategy that takes into account such events. By being prepared for the possibility of a grey swan event, investors can mitigate risks and protect their investments from catastrophic consequences.

What is Black Swan theory?

In 2007, a year before the onset of the global economic crisis, the American trader of Lebanese origin Nassim Nicholas Taleb published the book “The Black Swan: The Impact of the Highly Improbable.” He used the term “black swan event” to refer to large-scale accidents that affect all areas of life.

From the author’s point of view, the black swan event always meets three criteria:

It should be unexpected for the observer.

Its effect should be large-scale.

As time passes, people will find prerequisites for it — as if it could be expected.

In fact, almost all abrupt changes can be classified as black swan event examples which are considered as unexpected events. You can open any history class book to see such rare events, for example, read the description of the Great French Revolution which is considered as one of the black swan event examples. This way you will have a better understanding of the severe impacts of a black sawan event. First of all, the reader will be greeted by a paragraph with prerequisites that were revealed after the fact of the revolution itself.

Black swan events change our beliefs

In 2007, along with the release of his book, Taleb wrote an article for The New York Times, where he explained the influence of “black swans” on our basic understanding of the world:

“A single observation can disprove a general belief based on thousands of years of observation of millions of white swans. All you need is a single (and, as they say, rather ugly) black bird.”

In other words, such rare events fundamentally turn our picture of the world upside down, proving that everything is based on a rather unreliable and even illusory construction. Human nature makes us build predictions based on previous historical events. A completely new occasion might be impossible to predict when there’s no experience to foresee it.

This thesis gives rise to distrust of any expert assessments and forecasts that are based on well-known principles and formulas. According to Taleb, investment strategies are no more trustworthy than astrology. The very first “black swan event” can bring down the market or, conversely, lead to an explosive growth of certain assets, and no one will be able to prepare for this. The author of ‘Black Swans’ explains:

“We forecast oil demand for 30 years ahead, not realizing that we cannot know what it will be like next summer. The cumulative errors in political and economic forecasts are so monstrous that when I look at their lists, I want to pinch myself to make sure I am awake.”

As confirmation of his theses, Taleb cites the past events of September 11, 2001, in New York. Back then, no one objectively assessed all the possible risks of severe consequences, simply because such a turn of events seemed the most incredible. 

Taleb extends the theory of “black swans” to famous personalities who were not appreciated during their lifetimes — such as Edgar Allan Poe or Arthur Rimbaud. In his opinion, if we had abandoned the usual logical attitudes, we would have had time to recognize their talent, which was ahead of its time.

Examples of Past Black Swan Events

Here are the major historical events tagged as ‘black swans’.

The 1997 Asian Financial Crisis

If we talk about financial markets, several events in recent history can be attributed to black swans. The 1997–1998 Asian financial crisis caused a drop in the exchange rates of the national currencies of many Southeast Asian countries, bank failures and a general stagnation of the Asian economy in the late 1990s.

In the middle of the last decade of the 20th century, the countries of the region, including Thailand, the Philippines, Malaysia, Indonesia, and South Korea, experienced a period of rapid economic growth. This growth was largely financed by foreign lending, spurred by the liberal monetary policy of the US Federal Reserve and favorable lending terms in local currencies. As a result, the economies of Asian countries were heavily over-credited which triggered large deviations and a collapse.

Another example could be the peak inflation rate during the 1970s, which exceeded the standard deviations predicted by statistics based models. In both cases, the severe limitation of relying solely on historical data and standard deviation models became apparent. Black swan events serve as a reminder that the future is inherently unpredictable, and the only way to mitigate the risk of unexpected events and catastrophic consequences is through diversified investment strategies and contingency planning.

The “Dotcom” Crash

The “Dotcom bubble” was observed between 1995 and 2001. The bubble was formed as a result of the surge in stocks of Internet companies (mostly American), as well as the emergence of a large number of new Internet companies. The shares of companies promising to integrate Internet tech skyrocketed in value. However, many new business models turned out to be ineffective, which triggered a wave of bankruptcies. At the turn of the nineties and two thousand, due to speculation and unjustified optimism, many investors lost about $ 5 trillion. 

Thus, a black swan event refers to a highly unexpected and rare occurrence that has a severe impact on normal expectations. During the dot-com bubble, technology companies were highly valued and experienced widespread insistence from investors. However, when the bubble burst, many of these companies folded, leaving investors and finance professors alike hit hard by the unforeseen turn of events.

9/11 Attacks

The black swan trading in the stock market is not the only example. September 11, 2001, appeared to be one of the most tragic days. Terrorists hijacked civilian planes with passengers on board and sent them to the twin towers of the World Trade Center in New York. It was a catastrophic loss: more than 2,900 people died in the attack. Shortly thereafter, the United States launched a massive anti-terror campaign. However, after the tragedy, some people started declaring that the events of September 11 could have been predicted in advance.

The 2008 Global Financial Crisis

As mentioned above, this upredictable event happened a year after the publication of Taleb’s book, where he used the term.

The global economic crisis started with the US financial crisis in 2007-2008. The S&P 500 index, which includes the 500 largest companies in the country, fell by 38.49% in 2008. The economic downturn was so severe that the Lehman Brothers investment bank filed the largest bankruptcy procedure in history — 25 thousand people lost their jobs, and the company — $46 billion in market value. The extreme impact of the crisis also affected the world stock markets, which then lost about $10 trillion. Of course, after the crisis, experts began to argue that the prerequisites and reasons could be seen long before the collapse.


After long preparations, Great Britain exited the European Union in January 2020. This event impacted stock rate and market volatility, but its potential severe consequences are still unfolding. Experts say, after Brexit, human rights in the United Kingdom will be severely tested, not least by government hostility to many aspects of human rights protection, the decline of democratic institutions, a climate of intolerance and human rights rejection by many media outlets. Economic decline is only one of many occurrences that people face.

Is Covid-19 a Black Swan?

This opinion is very common. For example, during the Ideas Lab conference in Brussels, experts said that the coronavirus demonstrated the fragility of the global world and the inability of states to act effectively. As a result, we found ourselves isolated and divided by borders, the economy plunged into chaos, and the WHO issued belated and contradictory recommendations. 

As befits a real “black swan event”, the pandemic over the past years was unexpected for the world community (except for the predictions of Bill Gates, to which no one listened) and led to global consequences.

More modern examples of the black swan event in the economy include the events of early 2020 when the COVID-19 global pandemic broke out in the world. On March 12, Black Thursday happened – on that day, the scale of the fall in the markets could be called catastrophic. 

The S&P 500 lost 9.5% on the day, the worst daily fall in the index since October 19, 1987. Indicators of other world markets also went to their peak. The recovery of American indices to the level of January 2020 occurred only by November.

Why Do Black Swans Happen?

Notable black swan events might be caused by a natural course of history, but their difference from “white swans” is that they are unpredictable events. Why? Because people pay no attention to the things that precede the catastrophe. 

Here are the main mistakes that prevent us from predicting the appearance of “black swan events” in time:

Bubble effect. People tend to trust more information and opinions that are prevalent in their environment or among those whom they consider being an authority. In this case, everything that contradicts this is ignored.

Overuse of mathematical methods in real life. For example, game theory is often used to predict the likelihood of winning a lottery or card. In practice, everything is much more complicated, and even those factors that we do not know should be taken into account.

Application of retrospective analysis: when one tries to predict future events based on the past. The main mistake here is to assume that we know enough to make predictions and that everything will develop according to the same scenario. The experience of the First World War did not help to prevent the Second.

So if you’re on the lookout for black swan event signs, here’s the bad news: you aren’t likely to pay attention to the things that will trigger accidents in the future. There are too many possibilities that we actually ignore.

How Can Investors Prepare for Black Swans?

The black swan event can influence almost all areas, and sometimes it happens instantly. So how do you protect yourself?

In his book, Taleb wrote that the best way to soften the influence of the black swan events is not to try to predict it. According to the author, instead, it is necessary to understand its inevitability and develop stable and sustainable plans that will help reduce the likelihood of such an event. Or smooth over its consequences.

For example, banks run stress tests — simulations that are designed to test whether a financial institution will survive another crisis. This practice became common in organizations just after 2008. Some central banks also took an example from them – for example, the Bank of England, a few years after the crisis, began to arrange its own stress tests.

But, as Taleb noted, not only professional organizations but also private traders can prepare for catastrophic events.

The black swan event in trading, as in other areas, comes suddenly and without warning. Therefore, you should always try to secure your portfolio as much as possible from adversity. There are several guidelines:

Accept the idea that the next black swan is bound to come

When you study the history of market movements, it becomes clear that bad events are happening all the time. Therefore, accidents should not come as a surprise, but rather a normal cycle of life.

Take advantage of the opportunities that black swans provide

When the stock market drops and stock prices decline due to such an event, it is worth considering investing in sustainable companies. Ultimately, they will be able to get out of the crisis, and the value of assets will rise again.

Diversify your portfolio

This advice is relevant for absolutely all investors. Remember that if you have only one asset in your portfolio, you will be very seriously affected by a black swan event. To secure your investment funds, be sure to distribute them among different instruments.

Black Swan investment tips

Here are the key takeaways from historical stock market statistics:

“Black swan events” in their influence on the markets do not fundamentally differ from other crisis phenomena.

Recovery times are closely related to the duration of the recession but rarely exceed one year.

The trend of broad market indices in the long term is always upward.

When choosing in favor of individual securities, an investor can often make mistakes. Take the current crisis. Markets recovered quickly, and some sectors such as IT, especially cloud-related stocks, are booming. But there are exceptions to this general trend. For example, Dropbox — one of the symbols of cloud computing and remote work — has not grown exponentially, but continues to trade below the price of its IPO in early 2018. You can protect yourself from such failures if you invest in broad markets, and not in individual securities.

By trading ETFs, investors can not only save their investments from “black swan events” and other economic problems but also earn. The market downtrend is perceived by many as an opportunity, so they buy in.

Are there any other black swans coming?

Which are the future black swan events that are waiting for us in the near future?

Back in 2017, in an interview with RBC, Taleb predicted the most likely events that will become the new “black swan events” are:

Epidemics. In 2020, in an interview with RBC Pro, Taleb said that the high mortality rate from COVID-19 was a direct consequence of the fact that many underestimated the epidemic even when the threat became quite obvious. In his opinion, the end of quarantine does not mean that we can return to normal life: the consequences will remain with us for a long time.

Neoluddism (‘resistance to robotization’). It’s called by analogy with the movement of the Luddites, who existed in the early 19th century and broke weaving machines, fearing to lose their jobs. According to Taleb, this trend will be especially noticeable in Islamic states.


Life is full of unexpected twists and turns, some of which have an extreme impact on the whole world. The black swan events theory states ‘hope for the best, prepare for the worst’, and it’s the best attitude you may have. How to protect yourself? If you trade with LiteFinance, make sure you diversify your portfolio and use analytical instruments to predict the movements of your assets.

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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EUR/USD edges lower, and tests 1.0750 support as a triple bottom stays in play


EUR/USD is set to finish the week with decent gains of 0.89%.
US economic data was mixed, though it portrays a deceleration of the economy.
ECB policymakers remain focused on tackling high inflation levels in the Eurozone.

As the New York session finished, EUR/USD fell 0.64% or 69 pips. A risk-on impulse did not help the Euro (EUR), which, pressured by a banking crisis threatening to spread to the Eurozone, weakened the shared currency. At the time of writing, the EUR/USD is trading at 1.0759.

EUR/USD drops on US Dollar strength, weak EU PMIs

Despite experiencing another turbulence, the US equities market is poised to finish the week positively. Deutsche Bank’s stock experienced a sharp decline due to concerns over the possibility of default, reflected in a 220 basis point increase in Credit Default Swaps (CDS). Although this harmed Wall Street at the beginning of the session, investors appeared to dismiss these fears and instead speculated that the Federal Reserve (Fed) would lower interest rates in 2023.

Wall Street finished the week with gains. Deutsche Bank’s stock experienced a sharp decline due to concerns that the bank may default, as evidenced by the 220 basis point rise in Credit Default Swaps (CDS). Although this initially caused some concern on Wall Street, investors ultimately dismissed these fears, speculating that the Federal Reserve (Fed) would reduce interest rates in 2023.

St. Louis Fed President James Bullard expressed that rates should be raised further to reach the 5.50%-5.75% range, which would mean an additional 75 bps of rate hikes on top of the Fed’s recent increase of 4.75%-5.00%. Meanwhile, Atlanta Fed President Raphael Bostic commented that the decision made in March was not easy, as there was a lot of debate and it was not a simple choice.

Thomas Barkin, the President of the Richmond Federal Reserve, stated that he felt the banking sector was very stable when they arrived at the meeting. Therefore the conditions were suitable for implementing monetary policy as intended.

The S&P Global PMI showed improvement in March, surpassing both expectations and the data from the previous month. Although the Manufacturing Index remained in a state of contraction, Durable Good Orders saw a 1% drop, which was still an improvement compared to the reading from the previous month.

In the Euro area (EU), March’s S&P Global PMIs were positive, except for the Manufacturing component, which remained in recessionary territory. European Central Bank (ECB) policymakers crossed news wires, led by the ECB’s President Christine Lagarde, saying there’s no trade-off between price and financial stability.

Bundesbank President Joachim Nagel commented that a pause is not in order as inflation, seen averaging around 6% in Germany, the euro zone’s biggest economy, will take too long to come back to the ECB’s 2% target.“Wage developments are likely to prolong the prevailing period of high inflation rates,” Nagel said in Edinburgh. “In other words: Inflation will become more persistent.”

EUR/USD Technical analysis

The EUR/USD failed to hold to its previous gains, though the triple bottom chart pattern remains in play as long as it stays above 1.0759. A breach of the latter would invalidate the pattern, and open the door for further losses. On the upside, the first resistance would be 1.0800, followed by the 1.0900 figure, ahead of the YTD high at 1.1032.


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Benefits of Forex Trading

2023.03.24 2023.03.24
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Most investors in the modern market choose Forex trading to join the global financial world and start trading. It is also known by the initials FX, which stands for Foreign Exchange. This rapidly developing currency market is considered the most suitable for beginners in the trading world. Popular banks such as JP Morgan and UBS, as well as various financial institutions and Forex brokers, are the economic entities through which it’s possible to buy and sell currency values such as US Dollars, Euros, etc.

The Foreign Exchange market allows trading of any type of securities in various currencies depending on each trader’s investment strategy. Thanks to the great flexibility in time and market terms, FX offers many benefits and opportunities for all financial market participants in comparison with other markets. In this article, we will outline the main features of Forex markets, what are the benefits of Forex currency trading, and its possible drawbacks.

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Advantages of Trading Forex

Forex currency trading has gained extreme popularity in the financial world due to its numerous benefits that led to its popularity. Below is a list the advantages of Forex trading and a brief analysis of each one that explains why this type of market is so popular.

Global Financial Market

One of the biggest advantages of the foreign exchange market is its popularity in the trading world. In the last two decades, FX has spread all over the world, becoming globally the largest financial market that is used in every corner of the globe. Approximately 195 countries are a part of the Forex market.

It is estimated that the daily transactions that take place through Forex trading platforms exceed 3.6 trillion dollars on average. That makes it globally the largest financial market with future potential for higher development and vast scalability.

Variety of Currency Pairs to Trade

The Forex market allows for choosing the currency pair to trade with. Through a wide list of choices (including trading cfds), one can buy and sell assets on other financial markets depending on their investment strategy. Some major currencies can be more easily traded than others due to their high volatility. It is estimated that there are around 128 pairs that Forex traders can choose to join the currency trading market. Below are some popular major currency pairs:

It’s Good for Beginners

FX is considered to be the best way for beginners to start their investment career and develop their trading skills. It offers great accessibility to the market since it doesn’t require a big amount as an initial deposit and has minimal risk. Moreover, most Forex platforms provide free demo accounts allowing newbies to get a taste of market movement and develop an efficient FX trading strategy. The low capital barriers, as well as no commissions on most accounts, are some of the reasons that Forex markets are picked by most hobbyist in trading.

Low Capital Barriers

In comparison with other financial markets such as stock markets, Forex currency trading doesn’t require a high amount of initial investment. A small investment can lead to high income. For example, a newbie can enter a capital of $500 and trade with a margin of 1:500. This can lead to great money profits, but also may work conversely with high potential risk and losses.

No Commissions on Most Accounts

Foreign Exchange has small or no trade commissions in a trading account. Moreover, the FX market doesn’t require centralised exchange fees on any transactions that occur, since the Forex broker can profit from the “spread”.

High Liquidity Market

Since Forex markets have such a big spread and are used by an enormous number of participants, they offer high liquidity in contrast with other markets. The Forex trading market is constantly operating, and thanks to modern technology, is accessible from anywhere. Thus, liquidity refers to the fact that anyone can buy or sell with a simple click of a button. 

Moreover, through sophisticated AI algorithms, market participants can automate and adapt their strategies depending on how the market moves, making the flexibility of investments even bigger. As a result, there is always a potential retailer waiting to buy or sell making  Forex a liquid market.

Volatility of the Forex Market

Price volatility is one of the most important factors that help decide on the next trading move. For short-term Forex traders, price volatility is crucial, since it depicts the hourly changes in an asset’s value. Moreover, swing traders use this indicator to define when is the proper time to enter or exit the market. For long-term investors when they trade Forex, the price volatility of the market is also fundamental. This is why they consider a “buy and hold” strategy may offer higher earnings after a long period.

Possibility of Hedging

Another significant advantage of Forex is hedging that can be applied to your trading account. This is an efficient method that helps either eliminate or reduce their risk of losses. When traders refer to the technique of hedging in Forex, they mean the strategical move of opening several Forex trades. 

Some may consider hedging as a high risk strategy, but the main point of this is to limit the potential losses to an acceptable amount without losing money rapidly. Most participants hedge Forex by investing in different yet related currency pairs. This way, when one currency pair goes long the other goes short, and they can balance the losses with the money gains.

You Can Trade 24 Hours a Day

An important difference between trading stocks and Forex trading is that the latter works 24 hours a day without closing. The four main directional trading sessions are divided as followed:

The Sydney Session;

The Tokyo Session;

The London Session;

The New York Session.

In the 24-hour Forex market, traders can start their account moves when the Sydney Session opens until the close of the New York Session. Also, specialists that trade Forex divide their trading into four sessions depending on the geographical area:

Pacific Session (Sydney Session);

The Asian Session (Tokyo Session);

The European Session (London Session);

The North American Session (New York Session).

Suits Varying Trading Styles

Before a new investor enters a Forex trade, he needs to define the strategy to follow in compliance with their trading styles. Depending on the time and effort, traders can be divided into categories according to their trading style. Some of them are the following:

Forex trading can be efficiently applied in any of the strategies above. Moreover, due to the Forex market’s great volume and its high liquidity, it’s possible to enter or exit the market any time.

Convenient Technology for Trading

Forex trading is a new method that was recently introduced to the market. Its decentralized nature demands continuous connectivity and adaptability. This is why a great number of developers are constantly working to improve this technology, making Forex trading platforms more suitable for modern finance demands. Thus, technological innovations help Forex trading to become even more widespread since everyone can trade from anywhere in the world.

No fixed lot size

In the Forex, there is no fixed trade lot size. Thus, it’s possible to start with any trade size. There are three types:

Micro Lot. This type equals 1,000 units of currency.

Mini Lot. This equals 10,000 units of currency.

Standard Lot. This is the biggest lot and equals 100,000 units of currency.

The micro lot is commonly used by beginners and helps them have more effective risk management. Traders choose their trading size depending on the number of lots they are interested in either buying (bid price) or selling (ask price).

Well Regulated

Forex trading is a decentralized technology that functions with no central management. That’s why it is more vulnerable to fraud and other types of perilous activities such as misleading promises, excessive high risk levels, etc. Thus, Forex regulation was developed to establish an honest and ethical trading attitude. 

Moreover, a foreign Forex broker must comply with the criteria that are defined by the Forex regulator. Depending on the country where the company is, its base FX has different regulations and applications, which ensure investors that they can withdraw their money anytime, even in the event of bankruptcy. Professionals and beginners secure their funds by depositing them in other accounts separate from the brokers, so the latter cannot use foreign money for their own business.

In the list below, you will find some of the most popular FX regulators:

Australian Securities and Investment Commission (ASIC);

Financial Conduct Authority (FCA);

Commodities and Futures Trading Commission (CFTC);

Securities and Exchange Board of India (SEBI).

There Is No Central Exchange

Forex does not have a physical entity like the stock exchanges, which makes it is a remarkable example of a decentralized market. Thus, all the transactions can be made from anywhere, and since it is open 24 hours a day, it can also be done at any time of the day.

For example, if an investor is located in Europe, he can trade during North America hours and monitor the moves of the one currency he is interested in. Through the internet, FX participants can buy or sell securities using virtual funds as well as check the status of trading currencies from different dealers around the globe.

There Are Low Transaction Costs

In comparison with the stocks, Forex has very low transaction costs. This is because brokers earn their returns through “Points in Percentage” (pip). Moreover, most Forex brokers can offer a very low spread and reduce or even eliminate the trader’s costs. Investors that choose the Forex market can boost their income by avoiding fees from exchanges, deposits, and other trading activities which have additional retail transaction costs in the stock market.

Advantages and Disadvantages of Leverage in Forex

In the table below are listed the pros and cons of leverage in Forex trading:



Leverage in Forex may lead to high returns.

There is the possibility that leverage may enlarge traders’ losses.

It gives the option to enter the market with a small budget and trade with high-value currencies.

Often, it is considered a liability. Some traders may not fulfill the demands of high leverage at the end of the transaction.

It’s possible to make a smaller effort and benefit from high profit potential.

Maximum leverage is connected with high interest.

Leverage is a factor that boosts capital efficiency.

Easy profit may lure an inexperienced Forex trader to use up all their budget resources.

It provides support to the market due to low volatility.


Disadvantages of Forex Trading

There are certain risks involved in Forex trading.

Lack of Transparency

Despite the great number of advantages that Forex trading has, we should always have in mind that Forex market is based on decentralized technology. Thus, FX lacks transparency due to significant factors, which are listed below: 

Counterparty Risks. Since FX is a global market, it is difficult to comprehend the fast changes and the different regulations of each country. Forex trading may have trading terms to protect the market participants, yet there is the risk that someone may not respect the agreed contract.

Operational Risks. The Forex market works 24 hours without stopping. Traders cannot monitor the changes daily, so they use algorithms to protect their interests and their investments. Thus, they need to be constantly informed on how the technology works, otherwise they may face great losses during the night or on weekends.

Leverage Risks. Forex offers high leverage. Newbies may not understand the dangers that a highly volatile Forex market may hide, and start losing money rapidly or even worse to lose all their investments in a matter of minutes.

Complex Price Determination Process

A major problem in the Forex market is the difficulty to determine the value of the currency pairs rate, which can be influenced by various factors such as global events, politics, economic stability, central banks, etc. That is the main issue that should be taken into consideration since the wrong interpretation of a chart can lead to significant losses.

High Volatility

When retail traders refer to price volatility in Forex, they mean how big the upswings and downswings of a currency pair are for a specific period. The larger those ups and downs are, the higher the price volatility. Those big changes can evoke a sense of uncertainty, and sometimes traders consider them as a chance for high profits. However, they can be proven wrong, and it may lead to uncontrolled losses. Some of the most volatile currency pairs are considered to be the following:


The Forex market offers a lot of privileges to any Forex trader. Once having decided to trade on foreign exchange, both experienced and newbies need to define their financial strategy and get familiar with the terms and conditions. Although Forex’s advantages outweigh its disadvantages, traders still need to be aware of the pitfalls and develop a robust risk management strategy to limit potential losses.

Benefits of Forex Trading FAQ

The content of this article reflects the author’s opinion and does not necessarily reflect the official position of LiteFinance. The material published on this page is provided for informational purposes only and should not be considered as the provision of investment advice for the purposes of Directive 2004/39/EC.

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US Dollar Outlook: Path of Least Resistance is Lower after Fed Ditches Hawkish View


U.S. dollar gains on Friday on risk-off mood, but post heavy losses for the weekThe Fed’s decision to ditch its hawkish guidance will help stabilize sentiment soon, but the timeline is uncertainMarkets are beginning to price rate cuts for this year, creating a bearish backdrop for the U.S. currency

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The U.S. dollar, as measured by the DXY index, gained ground Friday afternoon, up about 0.5% to 103.11 amid risk-off mood, but was on track for a 0.7% drop on the week following the recent slump in U.S. Treasury yields, which was accelerated by the Fed’s dovish hike at its March meeting.

On Wednesday, the Federal Reserve raised interest rates by 25 basis points, in line with expectations, but signaled that its hiking cycle may be coming to an end in response to nervousness over U.S. banks in the wake of the rapid and unexpected failure of two mid-sized regional lenders (SVB and SBNY).

The turmoil in the banking sector that triggered tremors on Wall Street earlier this month is likely to lead to a credit crunch for households and businesses in the coming months, creating a meaningful disinflationary process. This will ease pressure on the central bank, limiting the need for overly restrictive policy.

The economy does not yet reflect the real challenges that will result from significantly tighter lending standards, but the negative effects will soon be visible. Forward-looking markets recognize that liquidity will be squeezed by recent events and have therefore already begun to price in rate cuts for this year.

The chart below shows how federal funds futures contracts for 2023 discount an interest rate of 3.96% in December. This implies several cuts in borrowing costs from current levels by the end of the year.

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Source: TradingView

While the Fed has pushed back against 2023 policy easing, its actions suggest that financial stability will be prioritized over the inflation battle, which is a slower-moving problem. In this context, it is just a matter of time before the Fed caves to “financial dominance” and pivots to a full-fledged dovish stance.

Given that the Fed is seen reversing course soon and stands ready to act if necessary to contain systemic risks, the U.S. dollar is likely to remain on a depreciatory path. Granted, uncertainty remains high, but sentiment should stabilize soon, with the Fed and other U.S. authorities backstopping any fallout from the banking system at all costs.

In terms of technical analysis, the U.S. dollar presents a negative bias after sharp losses since March 9, when prices were rejected by cluster resistance and descended below a long-term ascending trendline.

With this backdrop, the path of least resistance appears to be lower, but to have conviction in the bearish narrative, a break below support at 102.00 is needed (50% Fibonacci retracement of the January 2021/September 2022 advance). If this scenario plays out, the focus shifts to February’s low.

On the flip side, if bulls regain control of the market and push the DXY index higher, initial resistance comes at 104.00, followed by 104.60.

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USD (DXY) Chart Prepared Using TradingView

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Fed’s Bullard: Latest FOMC projections suggest one more rate hike


St. Louis Federal Reserve President James Bullard said on Friday that the United States remains in a position to see disinflation in 2023. They will see if the Fed may need to react more. He sounded optimistic, by saying the he expected the Fed to be dealing more with the strong economy in the coming months and not worrying as much about financial stresses.

Bullard sees an “80% chance” that financial stress will abate, and the discussion will shift back to inflation. According to him, the other outcome with a lower probability, is a recession. He cautioned that there could be downside risks if financial stress worsens.

The probability of a global crisis from recent stress is low, said Bullard. He mentioned that the Fed will continue to monitor the situation closely and will take appropriate action if necessary.

St. Louis Fed President argued that in response to the strong economy, the terminal rate for this year was raised by 25 basis points to a range of 5% to 5.75%, taking the assumption that financial stress subsides.

Regarding the interest rate path, Bullard said the projections suggest one more rate hike that could be at the next FOMC meting or soon after.

Fed’s Bullard: Swift response to bank stress allows monetary policy to focus on inflation


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Euro Dollar Outlook: EUR/USD Takes a Breather as Prices Test Support

Euro Dollar (EUR/USD) Talking Points:

EUR/USD clings to the 50-day moving average (MA) as prices struggle to break free from a broader range of support and resistance.Euro eases after failing to break above 1.090US Dollar remains vulnerable diminishing growth forecasts and a higher probability of a recession.

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EUR/USD has been on a steep uptrend since September 2022, driven by a hawkish ECB (European Central Bank) and a weaker Dollar. While the Federal Reserve hiked rates aggressively throughout last year, market participants have been anticipating a slower pace of tightening or a near-term pivot.

As the ECB (European Central Bank) remains committed to raising rates until inflation shows significant signs of easing, higher rates have contributed to the recent move. With the hawkish rhetoric expressed by Fed Chair Jerome Powell at last month’s summit, the repricing of rate expectation boosted demand for the Dollar. However, after falling to prior support at 1.0524 on 8 March, the collapse of SVB (Silicon Valley Bank) and Signature Bank raised concerns about the health of the US banking system.

EUR/USD Price Analysis

After rising above trendline resistance (taken from the 2021 high) in January, a weaker Dollar and a hawkish ECB (European Central Bank) allowed Euro to gain against the greenback. With EUR/USD surging to the 50% Fibonacci retracement (the mid-point) of the 2021 – 2022 move, prices continued to climb before peaking at the February high of 1.103. This was followed by a sharp pullback that saw EUR/USD retest support at the March low of 1.0523 before heading higher.

While a zone of co range of technical support and resistance forming between the March low and the 50-day MA (1.073) Wednesday’s FOMC meeting allowed prices to enjoy an additional boost of confidence.

EUR/USD Daily Chart

Chart prepared by Tammy Da Costa using TradingView

With bulls failing to gain traction above 1.090, the 50-day MA came back into play and continues to provide support for the short and longer-term move.

To Learn More AboutPrice Action,Chart PatternsandMoving Averages, Check out theDailyFX Education Section.

As fundamentals remain at the forefront of risk sentiment, the economic calendar highlights high impact data releases that may contribute to driving volatility and price action next week.

DailyFX Economic Calendar


— Written by Tammy Da Costa, Analyst for

Contact and follow Tammy on Twitter: @Tams707

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EUR/USD declines towards 1.0800 despite hawkish ECB bets, Eurozone/US PMIs eyed


EUR/USD is declining towards 1.0800 as USD Index has extended its recovery further.
S&P500 futures recovered after the promise of insurance on additional deposits by US Treasury Secretary Yellen.
Going forward, the release of the preliminary S&P Global Eurozone/US PMIs (March) will be keenly watched.

The EUR/USD pair is displaying a back-and-forth action around 1.0830 in the Tokyo session. The major currency pair is expected to continue its downside momentum toward the round-level support of 1.0800. The downside bias for shared currency pair is strengthening as the US Dollar Index (DXY) has shown a significant recovery.

S&P500 futures remain silent after a recovery move on Thursday backed by the promise of insurance on additional deposits by US Treasury Secretary Janet Yellen, which restored the confidence of investors, portraying some optimism in US equities. The US Dollar Index (DXY) has extended its recovery to near 102.70 as other western central banks are also following the footprints of the Federal Reserve (Fed).

On Wednesday, at the monetary policy meeting, Fed chair Jerome Powell delivered signs of concluding the year-long rate hiking spree to avoid any further mess in the banking crisis. Also, rates have reached to a point where room for further escalation is less. Like the Fed, other central banks are also eyeing a pause in the rate-hiking cycle such as the Bank of England (BoE), and the Reserve Bank of Australia (RBA). Therefore, the USD Index has shown a recovery move due to its safe-haven appeal.

Meanwhile, the demand for US government bonds has extended further as investors have cheered that the Fed is pausing rate hikes sooner. Higher demand for US bonds has trimmed the return offered on 10-year US Treasury yields below 3.4%.

Going forward, the release of the preliminary S&P Global Eurozone/US PMIs (March) will be keenly watched. Mixed performance is expected from both economies.

On the Eurozone front, unlike other economies, bigger rate hikes are still preferred as the European Central Bank (ECB) has still more room left. Also, the core inflation is extremely stubborn due to high wage pressures. ECB policymaker Klaas Knot said that the ECB is unlikely to be done with rate hikes and added that they still think that they need to raise the policy rate in May.


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