Market news & insights

Venezuela: A Latin American Crisis Venezuela’s economy has been in turmoil in recent times with its inflation skyrocketing and with no signs of slowing down, the situation may worsen. The political tensions have also been rising in one of the OPEC (Organization of the Petroleum Exporting Countries) member country whose economy has been slowly declining since the crash of oil prices in 2014. We have seen large protests against the highly unpopular president Nicolas Maduro, who won the most recent in May this year.

However, most people called it a "show election" as it had the lowest voter turnout in Venezuela’s democratic history at 46%. The Economy With the economic and social crisis rising in Venezuela, we have seen the countries inflation rise to new record highs. From reaching 4068% in January, we have seen the inflation reach 46305% last month.

Experts are predicting the number could reach 1,000,000% by the end of 2018, according to the IMF (International Monetary Fund) economist Alejandro Werner and has compared it to Zimbabwe’s hyperinflation in late 2000’s. It is worth pointing out that the second highest inflation in the world is in Sudan at 122%. Shortages in electricity, water, and public transport affect millions of people of Venezuela.

President Maduro blames countries poor economy on an economic war that he says is being led by the United States and Europe. IMF’s Alejandro Werner says that if the country’s economic and social crisis deepens, Venezuela’s economy could decrease by around 50% over the next 5 years which be one of the worst economic falls in over 60 years. "The collapse in economic activity, hyperinflation, and increasing deterioration... will lead to intensifying spillover effects on neighbouring countries," Werner wrote in a blog post. IMF is estimating an 18% decrease in Venezuela’s economy in 2018, up from 15% drop it predicted back in April.

That would be the third double-digit annual decline in a row. Werner said the projections are based on calculations prepared by IMF staff, but he warned that they have a degree of uncertainty greater than in other countries. "An economy throwing you these numbers is very difficult to project," Werner said at a news conference. "Any changes between now and December may include significant changes." The Venezuelan Currency Countries official currency - Bolivar Fuerte (VEF) has weakened dramatically in recent times. 1 US Dollar is currently worth around 206841 bolivars. The Venezuelan government has recently announced it will slash five zeros from its currency.

The announcement was made on 25th July by President Maduro and it is part of a currency reform that was already scheduled for June and was a postponed on two occasions before. The existing Bolivar Fuerte banknotes, which range from 1,000 to 100,000 will stop circulating and will be replaced by the new "bolivar Soberano", which will range from 2 to 500. The new currency is set to start circulating this month.

By Klāvs Valters Sources: Yahoo Finance, Google Maps, Banco Central De Venezuela

Broadly speaking, inflation is a general increase in prices which result in a fall in the purchasing value of money. In this article, we are going to look at measures of inflation and other indicators that can help traders to detect early signs of inflation. Traders try to follow the inflationary pressures to anticipate the next interest rate move by central banks.

If the central bank sees that inflationary pressures are building up and that economic growth is accelerating, they can decide to raise the interest rate to combat inflation and slow down the economy. Producer Price Index (PPI) and Consumer Price Index (CPI) are widely used measures of inflation. PPI tracks wholesale price inflation while CPI follows retail price inflation.

As the name entails, PPI and CPI follow the changes in prices from the Producer’s and Consumer’s point of view respectively. PPI can be viewed as the leading indicator because higher producer prices will eventually be passed on to consumers.Therefore, PPI and CPI figures allow traders to forecast the central bank’s next move about the interest rate. Early Warning Signs of inflation There are other factors that can help traders to see that inflation is building up ahead of the release of PPI and CPI figures.

In doing so, forex traders are better able to trade inflation data more confidently. Consumer Confidence and Retail Sales These two economic data provide investors with an indication of the health of the consumers. Consumer Confidence offers an essential insight into the demand for goods and services regardless of consumers’ financial situation.

Consumers are likely to spend if they feel confident about the overall economy. Similarly, Retail Sales help to measure the trends in consumer spending which could cause investors to rethink the direction of interest rates. Labour Market and Wages - (Unemployment rate, Jobless Claims and Average Earnings) Employment rate helps to detect whether there is a shortage or oversupply of labour.

The simple demand and supply diagram of the labour market will provide you with the direction of wages when there are changes in the labour market. Wage inflation therefore translates into more spending and adds to inflationary pressures. Housing Market - (House Prices and Mortgage approvals) The correlation between the housing market and inflation can be a complex one.

However, for this article, we will look at house prices and interest rates. When interest rates are low, buying houses become more affordable. Depending on demand and supply, any change in house prices or mortgage approvals will provide insights on the inflationary outlook.

Inflation is critical for the Forex markets as it can exert a considerable influence on the exchange rate of a currency. Because central banks tend to adjust interest rate to fight inflation or deflation, forex traders monitor inflationary pressures very closely. It helps them to forecast whether the next move of the central bank will put downward or upward pressure on the currency.

If you are willing to look at your Forex experience a bit like an apprentice completes an apprenticeship you are likely going to achieve a higher level of success. Why should opening a live account and making money in the financial markets be any different to any other career? You don’t get to build a house without the appropriate qualifications nor do you get to fly a plane without taking hours of flying lessons and passing some final tests.

A professional sports person spends hours building their body, mind and talent to compete at the highest level but being a Forex trader for some reason is often considered differently. Why? Because as human beings we want instant gratification and because online forex trading involves the opportunity to make money we as humans are greedy and are usually not prepared to take a logical and sensible approach to learning, practice, discipline and patience.

We want it all now so the gambling approach can take over. When you trade forex you are effectively competing and the online trading competitors who you are playing against (banks, institutions) are some of the most experienced, knowledgeable and at times ruthless currency trading competitors on the planet. They want to win and your best chance of winning in my experience is to learn to ride their coat tails and trade similar strategies and systems, which also includes extremely tight risk management.

For example most successful forex banking traders have honed their skills for years often working their way up from a retail banking position, through the research departments, through the company courses and finally over time into a forex trading position on the trading desk. They’ve done an apprenticeship. With such strong competition does this ultimately put you in an uncompetitive position?

No, provided you are willing to spend the time to learn about the fundamentals and technical charts that give you an edge and apply professional risk management you can succeed in the currency markets. There is no question you will fail along the way just as every apprentice failed at times through their apprenticeship but if you do things steadily and slowly you will likely fail gracefully as you learn and stay in the currency trading game long term. Success in the currency markets requires one very important ingredient.

Time! You are going to need time and you need to be able to give yourself the time to fail, time to win, time to learn and time to grow as a currency trader. Think of trading forex like an apprenticeship and you are likely going to achieve a higher level of success.

Join me live online every Wednesday evening at 7pm AEST for a Free Professional Forex training lesson. I will do my best to share with you the important fundamental and technical information to make your currency apprenticeship as enjoyable as possible. To log into the session simply use the following link.

Please make sure you are logged in at 6.45pm AEST as the room is often full. http://gomarkets.webinato.com/room1 Andrew Barnett | Director / Senior Currency Analyst Andrew Barnett is a regular Sky News Money Channel Guest and one Australia’s most awarded and respected financial experts, and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Connect with Andrew: Email

There has been quite a lot of talk about oil in the news recently with some analysts suggesting the price could reach $100 per barrel, which would be the highest since 2014. Whether that will happen, that is another story. In this article, we take a look at world’s largest crude oil exporters.

Saudi Arabia Saudi Arabia is the world’s largest crude oil exporter with $133,6 billion worth of oil exports in 2017 which was around 15,9% of the total crude oil exports in the world. The middle eastern country is highly reliant on its oil exports and it has the 2nd largest proven oil reserves in the world. In recent years, we have seen the Kingdom announce ''Saudi Vision 2030'' which outlines plans to diversify its economy to reduce its dependence on oil.

One of the most notable plans is the new city called Neom, you can find out more about the ambitious city plan by clicking here. Capital: Riyadh Official language: Arabic Population: 33,000,000 Gross Domestic Product: $683 billion Currency: Saudi riyal (SAR) Russia Russia is world’s second largest crude oil exporter at with $93,3 billion (11,1% of the total) worth of oil exports last year. Russia is the biggest country in the world and has the 11th largest economy in the world at $1,5 trillion, according to the World Bank.

It’s biggest export partners are the European Union, China and neighbour Belarus. Russia is 8th on the list of world’s largest proven oil reserves. Capital: Moscow Official language: Russian Population: 144,526,636 Gross Domestic Product: $1,5 trillion Currency: Russian ruble (RUB) Iraq Iraq is third on the list with $61,5 billion worth of oil exports in 2017, 7,3% of the total.

Iraq was one of the founding member Organization of the Petroleum Exporting Countries (OPEC) with Iran, Kuwait, Saudi Arabia, and Venezuela when it was established back in 1960. Iraq’s economy is highly depended on oil with oil production accounting for 2/3 of the country’s GDP. Capital: Baghdad Official language: Arabic and Kurdish Population: 37,202,671 Gross Domestic Product: $202 billion Currency: Iraqi dinar (IQD) Canada The North American country is the fourth largest crude oil exporter in 2017 with $54 billion worth of crude oil exports (6,4% of the total).

Canada has the 3rd largest proven oil reserves with 95% of these reserves are in the oil sands deposits in the western province of Alberta. Capital: Ottawa Official language: English and French Population: 37,067,011 Gross Domestic Product: $1,6 trillion Currency: Canadian dollar (CAD) United Arab Emirates The United Arab Emirates, the third largest economy in the Middle East is the 5th largest crude oil exporter with $49,3 billion worth of oil exports in 2017 (5.9% of the total). Even though United Arab Emirates has the most diversified economy in the Gulf Cooperation Council (GCC), a regional intergovernmental political and economic union which is made up of all Arab countries of the Persian Gulf, it is still highly dependent on oil.

Capital: Abu Dhabi Official language: Arabic Population: 9,575,729 Gross Domestic Product: $382 billion Currency: UAE dirham (AED) This article is written by a GO Markets Analyst and is based on their independent analysis. They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk.

Click here for more information on trading oil commodities.

Last year the total sales of gold exports reached $310 billion mark. The top 5 countries made up a large portion of the total gold exports last year with shipments accounting to more than $177 billion, which was 57.30% of the world total. In 2011 we saw the price of gold reach record highs at over $1,900.

Since then we have seen the price fall and currently trading at around $1,219 level. In this article, we will take a look at the top 5 biggest gold exporters in the world. XAU/USD Monthly Chart Switzerland Switzerland was the largest gold exporter of gold in 2017 with $67.9 billion worth of exports which was around 21.9% of the total.

European Union is Switzerland ’s largest trading partner with 46.6% of all Swiss exports by value being delivered to the EU. Switzerland has the 20th largest economy in the world at $678 billion and 3rd in the world per capita at $80,189. Capital: Bern Official languages: German, French and Italian Population: 8,508,898 Gross Domestic Product: $678 billion Currency: Swiss Franc (CHF) Hong Kong Hong Kong, officially known as Hong Kong Special Administrative Region of the People’s Republic of China is the second largest exporter in the world with exports worth up to $52.2 billion, 16.8% of the total in 2017.

Hong Kong has the 33rd largest economy in the world at $341 billion and 16th per capita at $46,193. Hong Kong is the 2nd largest foreign exchange market in Asia and 4th largest in the world in 2016 with a daily average turnover of forex transaction reaching $437 billion, according to the Bank for International Settlements. Official languages: Chinese and English Population: 7,448,900 Gross Domestic Product: $341 billion Currency: Hong Kong Dollar (HKD) United Arab Emirates The United Arab Emirates is the third largest exporter of gold with $20.7 billion or 6.7% of the total world exports in 2017.

The United Arab Emirates has world’s 19th largest economy at $638 billion, and it’s the third largest in the Middle East, behind Saudi Arabia and Iran. Capital: Abu Dhabi Official language: Arabic Population: 9,575,729 Gross Domestic Product: $383 billion Currency: UAE dirham (AED) United States With exports worth $19.8 billion, United States is the fourth on the list of the largest exporters of gold which is about 6.4% of the world total. As you probably may know, the US has the largest economy in the world at a whopping $19 trillion.

Even though the US has the largest economy in the world, it also tops the list for the country with the largest total debt at over $18 trillion. Capital: Washington D.C. Official language: English Population: 325,719,178 Gross Domestic Product: $19 trillion Currency: United States Dollar (USD) United Kingdom The United Kingdom is fifth on the list of the largest gold exporters in the world at $17 billion worth of exports in 2017, which is 5.5% of the world total.

Same as on this list, it is also the fifth largest economy in the world at $2.6 trillion total Gross Domestic Product. United Kingdom is the home of the world’s second largest financial center in London, according to the Global Financial Centres Index (GFCI) report. Capital: London Official language: English Population: 66,040,229 Gross Domestic Product: $2.6 trillion Currency: Pound Sterling (GBP) This article is written by a GO Markets Analyst and is based on their independent analysis.

They remain fully responsible for the views expressed as well as any remaining error or omissions. Trading Forex and Derivatives carries a high level of risk. Sources: Go Markets MT4, Google, Datawrapper

Candlestick charts are one of the most popular and commonly used tools by traders in analysing the markets. In this article, we will briefly look at its history then move on to some basics on how to interpret these charts. We will also look at some of the major candlestick chart patterns to give you an understanding of how you can use them for your trading analysis.

A brief history of candlestick charts Candlestick charts originated in Japan in the 18 th century and is one of the earliest known forms of technical analysis. Today, it is the most popular chart used by FX traders as it provides a quick and easy picture of price action in a particular trading session. Analysing and understanding a candlestick A candle is made up of a rectangular ‘body’ and single lines at both ends called ‘wicks’.

Candlesticks provide a more visual representation of price action than you get from simple Bar or Line charts. For the purpose of this article, the bear (down) candle will be red, and a bull (up) candle will be blue. One candle will represent one whole trading day.

However, it is important to note that with the MT4 platform you can also set up the candlestick chart to reflect 1 min, 5 min, 15 min, 30 min, 1 hour, 4 hour, daily, weekly and monthly time frames. Candlestick body represents strength of price action As per the diagram below, the formation of a candlestick represents the open, high, low and close price for the day. The length of the body shows the strength of the price action.

The longer the body of a candlestick, the stronger or more aggressive the price action is. In the example below shows two similar size candles, however, the second one is a stronger bullish candle as the body is longer. Wicks represent buyer and seller activities The thin lines above and below the body are called ‘wicks’ and represent the high and low range of the price for the day.

The wick on top of the body represents sellers and selling activity. The bottom wick indicates the presence of buyers and buying activity. The length of the wick gives a good indication of the strength of the type of activity i.e. a longer wick is more definitive than a shorter one.

A long upper wick and short lower wick indicates that there were buyers earlier in the day pushing prices higher. However, strong sellers later on in the session forced the prices down from their highs, creating a long upper wick. A long lower wick and short higher wick indicates that sellers dominated earlier in the day, however, stronger buyers entered later in the session pushing the prices higher from their lows and creating a long lower wick.

Common Candlestick chart formations Here are some of the most common candlestick chart formations that FX traders use for their trading analysis. Spinning Tops A Spinning Top is a Candlestick with a short body and a long upper and lower wick. It indicates uncertainty in the market and puts a question over which way prices may be heading.

The long wicks indicate strong buying and selling activities at some stage during the trading session, but with no clear winner at the end. If a Spinning Top occurs towards the end of a trend it may indicate that the trend is coming to an end. If it occurs while the market is moving sideways, it may indicate a start of a trend.

A Spinning Top is usually a Neutral signal. Doji A Doji candlestick is formed when the opening price is the same or very close to the closing price. It signals a balance between buyers and sellers.

A Doji with a long upper wick indicates the initial presence of buyers. The price has initially moved higher and eventually attracted sellers. In this case, the sellers are seen as the stronger group, as they closed out the day.

A Doji with long lower wick indicates the initial presence of sellers. The lower prices attracted buyers, who ended up being the stronger group as they closed out the trading session. Looking at a Doji on its own may not give a clear buy or sell signal.

But looking at it and taking into consideration preceding candles, it can provide some valuable information. For example, if a Doji occurs at the end of a trend or even one trading session, it may be a sign that a potential change in direction may happen. It might also occur at the end of a congestion phase.

It might follow an up candle or a down candle. The strength of the previous candle, as measured by the length of the real body, will give traders an idea on how to interpret the Doji signal. In the diagram below, a Doji appears after a relatively bullish session.

This can either indicate a start of a new phase of the uptrend (if a trend exists), or a potential change into a new (bearish) direction. Gravestone Doji It is a reversal pattern that could mean a bullish rally is about to end. This is formed when the open, low and close are equal and the high creates a long upper wick.

The resulting candlestick looks like an inverted “T”. A Gravestone Doji indicates that buyers dominated trading and drove prices higher during the early part of the session. However, by the end of the trading day, sellers started to appear and pushed prices back to the opening level and the session low.

A Gravestone Doji is usually a bearish signal. Dragonfly Doji This Doji formation is another signal of indecision between buyers and sellers. A Dragonfly Doji is formed when the open, high and close are equal and the low creates a long lower shadow.

The resulting candlestick looks like a “T”. A Dragonfly Doji indicates that sellers dominated early trading and drove prices lower during the session. But by the end of the session, buyers appeared and drove prices back to the opening level and the session high.

A Dragonfly Doji is usually a bullish signal. Harami A Harami is a reversal pattern and consists of two candlesticks. A Harami formation can be bullish or bearish depending on the direction of the price action.

The most important thing to consider when looking for a Harami is the gap up and gap down in price. A bearish Harami is formed when a large bullish candle (Day 1) is followed by a small bearish or bullish candle (Day 2) which showed a gap down in price. A bullish Harami occurs when a large bearish candle (Day1) is followed by a small bearish or bullish candle that showed a gap up in price.

The important thing to consider is the size of the body of both candles as it is indicative of the strength of the signal. The first candle should have a rather large body. The smaller the body in the second candle the stronger the signal.

Example of a Bearish Harami: Hammer A Hammer is a bullish reversal pattern usually formed at the end of a declining price trend. It is identified by its small body at the higher side of the range. The bottom wick should be at least twice the size of the real body and the upper wick should only be small, if it exists at all.

In chart analysis, it is the length of the wick (of a Hammer formation) relative to the body that creates the signal. The wick could be viewed as a sign of rejection of lower prices and therefore a possible reversal of the trend. Hanging Man A Hanging Man is a bearish reversal pattern.

Its formation is similar to the hammer formation, except that it occurs at the end of a bullish trend. Once again the body is at the top of the range with the lower wick at least twice as long as the body. The upper wick should be short if it can be found at all.

It is best to seek confirmation of a bearish reversal with a follow-up signal the next day. These are just some of the basic candlestick patterns. There are numerous books and online resources available about Candlestick charting.

If you you’re new to FX trading, it would be highly recommended to read up on Candlestick charts to find out how you can use it for your trading. For information on other trading tools, see our Autochartist, Genesis for MetaTrader, VPS for MetaTrader and a-Quant information pages. Rom Revita | Sales Manager Rom is the Sales Manager at Go Markets Pty Ltd and manages the day-to-day running of the Sales, Support and Marketing teams.

He has been with the company since 2013 and is also one of our two appointed Responsible Managers, helping to ensure that the company follows all AFSL regulatory requirements. Rom has extensive financial markets experience and originally comes from an equities & derivatives trading background. He has served on the Trading & Sales Desk with several large broking houses, and now specialises in Margin FX and CFDs.

Connect with Rom: [email protected]