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FX Market Review: Q1 2018



Hello, traders! Well, we are rapidly approaching the end of the first calendar quarter of 2018. Time has flown and it’s fair to say that it has been an eventful first few months of the year. Let’s look at some of the significant moves that we’ve seen so far.

The major event of this quarter would have to be the market correction at the beginning of February—within a day or so of Janet Yellen leaving her role as Head of the Federal Reserve, the market took a tumble which removed all of the gains from the preceding few months. Traders watched and waited to determine whether this would be the start of something more ominous. Let’s look at some charts:

S&P 500 Daily Chart

Screen Shot 2018-03-28 at 1.31.07 PM

We can see that price fell heavily at the start of the February—and that the Daily 200MA (green line) acted as a support. Price has struggled to regain its recent high and now wallows down toward the bottom of the range. So long as we stay above the Daily 200, we remain bullish.

NASDAQ 100 Daily Chart

Screen Shot 2018-03-28 at 1.32.11 PM

You can see that while the NASDAQ100 took the same tumble as the S&P 500, it recovered far quicker. Furthermore, it retraced and made new all-time highs before printing a Key Day Reversal on March 13 and falling away.

Foreign Exchange (FX)

When trading FX, I am always looking at ways to buy strength and sell weakness. The Stock Market tumble, the ongoing North Korean standoff, and the Trump tariffs have brought the Japanese Yen to the fore as it is still considered a safe haven. The British Pound and the Euro have also been strong this Q1. On the other end, we have seen weakness in the Australian Dollar and the Canadian Dollar. The disparity between weak and strong currencies is very evident when we look at the charts.

GBPCAD Daily Chart

Screen Shot 2018-03-28 at 1.33.02 PM

It’s clearly been one-way traffic for GBPCAD for the last few months—a reflection of GBP’s strength and CAD’s increasing weakness.

AUDJPY Daily Chart

Screen Shot 2018-03-28 at 1.34.12 PM

The strong downtrend of the AUDJPY tells us that AUD has been weakening as the JPY has significantly strengthened.

CADJPY Daily Chart

Screen Shot 2018-03-28 at 1.35.11 PM

Once again, we have a very clear trend showing the weakness in CAD and the growing strength in JPY over Q1. The CAD has suffered badly this first quarter against all of the other major currencies. For private traders, being able to understand strength and weakness within FX markets can be very beneficial.

Commodities & Crypto

To finish up, let’s take a quick look at Oil, Gold, and BTC.

U.S. Oil Daily Chart

Screen Shot 2018-03-28 at 1.35.54 PM

Oil fell victim to the market tumble of early February and is only now making its way back to its highs of late January.

XAUUSD (Gold) Daily Chart

Screen Shot 2018-03-28 at 1.36.36 PM

Despite the market turmoil of Q1, Gold has basically gone sideways in a channel so far this year. We’re presently at the top end of that channel and will wait to see if it breaks or bounces off the upper trend line.

BTCUSD 4 Hour Chart

Screen Shot 2018-03-28 at 1.37.21 PM

After the striking rise of 2017, the first quarter of 2018 has been a very different story! Despite a history of BTC prices rising after January most years, this year we have seen prices struggle, and the downward trend continues.


The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice. If such information is acted upon by you then this should be solely at your discretion and Valutrades will not be held accountable in any way.

This post was written by Graeme Watkins

CEO Valutrades Limited, Graeme Watkins is an FX and CFD market veteran with more than 10 years experience. Key roles include management, senior systems and controls, sales, project management and operations. Graeme has help significant roles for both brokerages and technology platforms.