The Times of the Trading Forex  In Corona virus

The Times of the Trading Forex In Corona virus

Coronavirus and Forex Trading

Welcome to our Special Topic on Forex Trading in the Time of CoronaVirus houses all scared to death at the moment I think we're all more scared about the economic effects than the financial effects and the uncertainty.

Then we are and the actual illness and even though I'm in one of the major categories since and safe I just want to get past the implications and to get past this financial and the economic upset.
The question is, what is really Coronas virus? now I have no scientific by biological education knowledge or anything else.
So my opinions on these don't really count because they're just unfounded opinions but coronavirus is a zoonotic type of virus transmitted from animals to humans and we saw what happened and starred in what Wuhan has I think you say right in China and it is transmitted amongst humans through coughing sneezing and even shaking hands.

The virus can live for several hours on many types of surfaces including clothes to get infected as sufficient once on your fingers to simply touch your nose mouth and eyes now I've tried like everybody advised not to touch your face but it's really hard to do that the good news is that washing your hands would soap greatly reduces the risk of any infection.

The pandemic sees many governments placing people in forced quarantine starting with China but also countries in the West like Italy now Spain France Israel most of the Middle East and the US. is starting oh yo it's really getting crazy in New York California and most public events have been canceled schools are closed around the world and their whole region in northern Italy.

I started building this class but these events may cause a deceleration in GDP or even recession as travel and the capability to work is hindered as we saw yesterday the Federal Reserve dropped interest rates in an emergency session to zero I don't know what these effects are going to have because me like you are wearing dividual people and the money really and we saw in the economic crisis from 2008 it doesn't flow down and as more and more people get laid off of work it's more and more business men's businesses falter I don't know how this is gonna help anybody but hopefully, the governments are coming up with plans but I know have lots of friends who are laid off meaning they have no source of income and this could go on for as much as three to four months and they can't even go out and interview for a new job they can't get a fart part-time job to fill in because there's just nothing to be had so it's also wreaking havoc on the markets you know Platts has cut oil demand and growth and global growth okay China's natural gas industry is way down everything is falling off Saudi Arabia seized you know we're seeing lots of cuts in OPEC you know China's PMI is at record lows.

Decelerating Economy now a decelerating economy would weaken that country's currency however a global crisis with most major economies affected may see an effect on the forex market muted well that's to a degree we're seeing less volatility now big coin crushed his state readily stating trading at nine thousand right under ten hit a little bit over ten in late in January and when I looked at it yesterday it hit a low in the three thousand dollar range which is amazing because you gotta remember everything's in MMC come back the dollar keeps strengthening now the virus impact on the forest could affect certain currencies greatly and others may see very little increase in volatility.

Trading strategies may need to be rethought to take an account the negative effect on the economy of a currency infection count of the virus may affect how to trade Forex lockdowns government announcements medical changes now a currency whose country keeps getting headline news with increasingly higher infection clouds may see an increase in volatility not handy when you have just decided to learn to trade Forex but then they say there's nothing like jumping into the deep end of the pool jokes apart it's important to remain calm take a step back do some research and have a better idea of what exactly is happening.

Governments and media love fear if you ever had time to look at the VIX index, the VIX is a volatility index based on the fear they later sensationalized to sell their news better and the former baby used to keep us in line this isn't anything new it's always been around the difference today is that they are constantly in our faces with it internet and social media have joined the traditional means of TV radio and paper to consistently drive home the message however internet where the internet is a double-sided sword and it can be a very useful tool to research facts.

But keep in mind you need to monitor closely the news and the facts that you are trading because you see lots of items or articles to republish them reprinted and you may be having an article that was published today but it's three-day-old news so know your sources don't blindly just go through the internet because you'll see something that says I mean I I saw last night something that said something about Italy and they hadn't even gotten to the point where Italy was locked down they weren't even counting for the huge jump in death rates last night so I knew the article even though it was just printed in a major paper was a reprint of an article run several days ago and this can have a big effect on your trading decisions.

The World Health Organization estimates as many as 650,000 people may die of common flu each year that's just the flu that we all get for years and years and years this is quite a remarkable number certainly we haven't even gotten anywhere close not with Coronavirus it has only been a few months since the first case in China and various contention plans may be helping but this flu although more contagious as slightly deadly deadlier may simply fizzle away as the weather gets warmer like any of the common influences do each year.

 well, the fact is it's not doing any better in Iran or in the Middle East or is in Israel and they're in a hot environments okay now I like I said I have no medical expertise but you have to have some knowledge to use this to trade in the markets now.

 Coronavirus is having a big immediate effect and it's on every news outlet TV radio and Internet governments are already making contingency plans as to prop up the economy as they fear economic activity may be disputed and disrupted most of these plans will involve either or both more government spending tax cuts and interest rate cuts the Fed already cut its rate by 50 points but then it cut it more.
Logical Consequences of the CoronaVirus impact on the Forex Market
We had the emergency drop just laughs yesterday so that's what I'm saying you need to stay on top of things because two days ago that was fairly twenty-four hours ago we had another chance.
So the logical consequences of the corona impact on the forex market to determine the consequences on forex markets of global pandemics such as a case of Corona we can look at the impact on the stock markets are an excellent gauge of economic activity forex markets, in the long run, followed the development in each country's economy so looking at the effects of previous pandemics on the stock market allows us to venture as how much the forex market might be affected.

We can see on this chart and I didn't make the charts up I found them on the internet I found them for a very reliable place source but we can see what the market effect was with each of these outbreaks now most of them didn't even hit a global scale
logical consequences
they made the headlines news of scared just a little bit I remember SARS I remember Ebola headlines but I don't ever remember coming to that measles we have all the time so wine flu MERS I mean most of these didn't even infect that many people.
So the table looks at the US side more and the worldwide index compiled by Morgan Stanley the US economy is the world's largest and that market is affected there will necessarily be repercussions throughout the globe so what we see on the table is that there was a little negative effect on global economies statistically speaking it probably looks like there's a is a positive correlation between pandemics and positive performance of the stock market the coronavirus impact on forex markets may be different.

Now remember these other implications these other viruses did not pop up all over the world in this kind of numbers now we're nothing about the flu in flu season comes flu season goes we have sometimes worse sometimes but we're you know what I've read is that because the flu has been around almost 2,000 years not coronavirus but the flu the standard flu human-beings genetically have built up not antibodies but resistance so it's not something new attacking our bodies so a lot of people never get the flu I don't think I've ever had the flu in my life okay but when we do have big flu epidemics it doesn't haven't that negative effect because it's been around and you know with human mankind's absorbed it where we look at the first couple years of HIV do you know seven hundred and ninety thousand people died yep because it was new and the bodies couldn't fight it off and we had no medical.

The Coronavirus Impacted the Forex Market

 so how much is the corona virus impacted the forex market we can have a look at the impact on the stock market since the outbreak of the virus in various Western countries I'm going to take February 3rd is a starting point to look at the stock market performance on that day CNN reported that there had been 426 deaths and more than 20,000 contagious contagions worldwide so here's what we got from our table now what we see is the week of February 20th a huge effect on the stock markets so looking at the daily chart of the UK stock market we see a similar pattern the footsie 100 was in the sideways trend with a similar with a certain bullish tendency over the previous month back to August 2019 the lateral price movement was mainly due to uncertainty created by breakfast however the stock market was holding its ground that is until the 24th of February when the foot seat tanked as you can see on this chart as the risk is a set by investors so they usually get hit very hard the footsie 100 has dropped 20 point eight percent from its high on jet on February 24th that's a huge decline you could say a market rout is in effect and as the pandemic spreads 

we probably haven't seen the full extent of the coronavirus impact on the forex market the corona impact on the forex market is an ever given the strain being taken on all major stocks stock markets are in at winter oil because of the possibility this pandemic will restrict economic activity is a great way this is plausible as we're seeing restriction on movement to and from large geographical areas major mass events shutdowns and we are not talking about only in China.   

Emotional Decisions Making

we tend to make emotional decisions fear is always a big driving factor in the market price action it also dictates more general social behavior to ax T in Italy whole supermarkets saw their shelves empty it in days and we're seeing the same thing in the US.
we're seeing you know you know I lived through the earthquake in Los Angeles I survived many severe hurricanes in South Florida so I know what this happens we can almost say this is like South Florida when they're predicting the earthquake to be a category 5 and saying it's gonna hit land two and a half days from now and cut right through Miami and up the coast and everybody's a mad panic well that's where we are right now but now everybody's glued to the TV set we see the hurricane move this way we see it moved that way we see it's gonna bypass Miami and Palm Beach and come in you know up farther north everybody down there breeze but it's constantly changing an hour by day by day it's all now there's a difference with weather scenarios and disaster scenarios because it's a long term after effect you know when we survive the Hurricanes in Florida it was everybody was safe from the sound we all had stock we all at houses fell.

 it's reasonable think the fear also drives masses in the forex market to take the same action in their trading strategies this fear has shown a certain pattern if Fester's don't like a risk in general or rather they would hold assets they don't have too much of a bumpy ride also added that in times of danger and threats investors will typically favor less risky assets we've always seen the UK short-term guilts drive into negative yields this happens investors dump risky assets such as stocks to buy low-risk government bonds we don't actually have a financial crisis however the fear that this may occur is driving the markets right now investors are acting in accordance to the fact that a financial and economic crisis is just around the corner.

 we're talking about millions of people out of work all over the world we're not talking about the financial crisis that had a worse effect on Spain and Italy in Portugal I mean and we don't know yo most of those who had jobs or income so all of that whether it all over without a hitch yo my house went way down in value but I still made my mortgage family my house went back up in value who cares but all the people that didn't get overtime people who lost their jobs who couldn't find a new job well it gets to be difficult so as the market players get emotional everyone heads to the exit door certain markets will get hit harder than others trading strategies tend to align in times of crisis.

That includes the forex markets everyone knows where the perceived danger is and they also know where the perceived safety is now remembered online trading we're looking for short-term volatility to make a quick profit as markets move up or down in this volatility but which currencies show the corn coronavirus impact on the forex markets so let's have a look at the Japanese yen which is a world-famous safe haven we've seen a rush to this currency in the past days the yen is considered a haven currency when compared to the US dollar this might seem surprising but whenever there is a global crisis the yen is usually appreciated if the US dollar is considered risky and the yen is considered simply less risky then the usd/jpy will simply go south to reflect investors and market preference so in the chart we can see the extent of the coronavirus impact on the forex markets the chart shows how the yen has appreciated over the 12 trading days now this is the usd/jpy so as it goes down means the yen is getting stronger the dollar is getting weaker this has happened as a coronavirus contagion and the death toll counts have climbed drastically looking at the previous month leading up to the dollar out we see a steady upward trend for the usd/jpy now we keep saying the dollar at the dollar though against the shekel the pound ever is flying upward because the dollar and the US economy is in better shape than these other countries that are facing the same economic disasters the most recent data shove GDP shrunk by 7% in the quarter while the US economy has been racing forward it seemed a logical rally for this pair until the coronavirus showed up and investors scattered for safety for getting all the fundamentals if we look at the euro euro cellar we can see a similar coronavirus impact in the forex market in the chart would tell shame second we can see how the euro US dollar touched a low 107 78 on the 20th of February to then reverse rapidly higher over the following 12 days to reach a recent high of 114 95 that's a 6.2 percent increase exceptionally remarkable in the ECB recently cut rates into deeper negative territory and the euro currency was in a constant slow decline since mid-january but then what's happened it's also reversed because now the epicenter for Corona has moved to Europe Europe was outside of Spain Italy and then a little bit of a what seemed to be isolated from all this they didn't have just like the UK seemed to be icing now it's all meaning head-on in the euro euro zone is the epicenter so will we see is the Euro falling against the dollar so again the Fed rate cut would have helped this rally but the coronavirus added the extra fuel so here we can see the dollar dollar strongly euros going way down in value and then we see it strategically turn and the Euro goes all the way up and hits a high in the 114 range however the coronavirus impact on the forex market will not always be negative for the US dollar as we mentioned before invested for a less risky asset to a riskier one so with each currency pair a comparison should be made if we look if we look the coronavirus impact on the forex market in emergency market emerging markets we will see that the dollar benefits from the current corona pandemic so let's sum it up the spotlight is back on short shortening the financial markets with some experts suggesting the only safe currency is the dollar and why is the dollar the only safe currency it is the most stable because the US has the biggest economy and will most likely to recover faster than all the other economies in these times knowing how to trade the euro dollar could be quite profitable as it represents 43 percent of the dollar index we have seen reversal flash crashes and is timelike in March 2020 we're rapidly spreading coronavirus in Europe has all the Bears interest in shorting the indices such as the footsie 100 and the docs so when in doubt stay is what we learned from almost 18 years of trading these financed mark if you would like to learn how to take advantage of these trading opportunity need more help your current strategies let us know or watch more videos at Barry Norman investors Trading Academy and we'll help you out and we're gonna keep updating all of this we're gonna take a closer look at gold a closer look at oil and a closer look at the stock market.