How To Trade USD, EUR, GBP, JPY: Kathy Lien and Boris Schlossberg

How to Trade USD, EUR, GBP, JPY
Kathy Lien and Boris Schlossberg

Past performance is not indicative of future results. Trading forex carries a high level of risk, and may not be suitable for all
investors. The high degree of leverage can work against you as well as for you. Before deciding to trade any such leveraged
products you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists
that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you
cannot afford to lose. You should be aware of all the risks associated with trading on margin, and seek advice from an
independent financial advisor if you have any doubts.
The information, including Commentary and Trade Ideas, provided on bkforex.com should not be relied upon as a substitute
for extensive independent research which should be performed before making your investment decisions. BKForex LLC and
bkforex.com are merely providing this information for your general information. The information and opinions presented do not
take into account any particular individual’s investment objectives, financial situation, or needs. All investors should obtain
advice based on their unique situation before making any investment decision and should tailor the trade size and leverage of
their trading to their personal risk appetite.
BKForex LLC will not be responsible for any losses incurred on investments made by readers and clients as a result of any
information contained on BKForex LLC. BKForex LLC do not render investment, legal, accounting, tax, or other professional
advice. If investment, legal, tax, or other expert assistance is required, the services of a competent professional should be
sought.
Agenda
Every Currency Pair is Unique,
Here is Why…
B
B
United States Dollar
Background
•  Symbol US$
•  Nickname – Greenback, Buck
•  85% of all Currency Transactions Involve the US Dollar.
•  The World’s Primary Reserve Currency
•  More Than 25 Currencies of Other Countries Peg Their Currency

to the US Dollar.
B
Central Bank
•  US Federal Reserve (FOMC)

•  Mandate: Price Stability and Sustainable Growth
•  Created: 1913
•  Central Bank Chairman: Janet Yellen
•  4 Quarterly Meetings Per Year, Minutes Released
Separately
Janet Yellen
More Details
Most Important Import Main Industries
Partners •  Services: 76.7%
1.  Canada •  Industry: 22.1%
2.  China •  Agriculture: 1.2%
3.  Mexico
4.  Japan
5.  Germany
United States
1.  Employment = Non-Farm Payrolls
2.  Retail Sales = Retail Sales
3.  PMI = ISM Manufacturing & Services
4.  Inflation = Monthly Consumer & Producer Prices (CPI/PPI)
5.  GDP = GDP
6.  Trade = Trade Balance
7.  Confidence = University of Michigan Consumer Confidence Index

Most Active Trading Hours
•  3:00 AM ET / 8:00 GMT London Open
•  8:30 AM ET / 13:30 GMT US Economic Releases
USD TRADING TIP #1
Dollar Driven by U.S. Yields

and Risk Appetite
USD TRADING TIP #2
Dollar Dictates where Commodity

Prices are Headed
USD TRADING TIP #3
Positive US Data May Not Always

be Positive for the Dollar
USD TRADING TIP #4
USD Flows Will Often Reverse

When EU Markets Close at 12
Noon ET
Euro
Background
•  Symbol €
•  Currency Without a Country
•  19 Members in the Eurozone*
•  Collectively the Largest Economy in the World
•  Germany is the Largest and Most Important Country
in the Eurozone
•  Second Most Important Reserve Currency
Trading Mechanics
Quote Convention: EUR
EUR/USD Pip Value = $10 for 100,000 Units
Average Daily Range = Approx. 80 pips
Key Metrics – GE-US 10 Yield, DAX
Central Bank
•  European Central Bank (ECB)
•  Mandate: Price Stability – Keep Inflation Below 2%
•  Created: 1998
•  Central Bank Chairman: Mario Draghi
•  Press Conference Follows Meeting
Mario Draghi
More Details
Most Important Export
Partners Main Industries
1.  United States •  Services: 70.5%

2.  China •  Industry: 27.3%
3.  Switzerland •  Agriculture: 2.1%
4.  Russia
5.  Turkey
Europe
1.  Employment = Employment Change (Germany Key)
3.  Activity = PMI Manufacturing & Services, German IFO Report
4.  Inflation = Consumer & Producer Prices (CPI/PPI)
5.  GDP = GDP
7.  Confidence = German ZEW survey, GFK Consumer
Confidence
8.  Central Bank Meetings & Minutes = ECB Press Conference
3:00AM ET / 8:00 GMT London Open
4:00AM ET / 9:00 GMT Economic Releases
8:30AM ET/ 13:30 GMT US Economic Releases
EUR TRADING TIP #1
Most Liquid Trading Instrument in

the World (Over 1.3 Trillion/Day)
EUR TRADING TIP #2
Tends to Trend Best Because of

Ample Liquidity
EUR TRADING TIP #3
Yield Spread!
EUR TRADING TIP #4
Correlates with Risk Assets

Unless Focus on EZ Credit
EUR TRADING TIP #5
Key Levels Generally Broken

After London & Before NY Close
Euro Crosses
British Pound
Background
•  Symbol £ GBP
•  Nicknames – Pound, Sterling, Cable
•  4th Most Actively Traded Currency
•  EUR/GBP just as important as GBP/USD

Trading Mechanics
Quote Convention: GBP
GBP/USD Pip Value = $10 for 100,000 Units
Key Metrics – FTSE, UK-US 10 Yield
What You Need to Know
•  5th Largest Economy in the World
•  Service Oriented Economy
•  One of the Most Developed Capital Markets in

the World (BREXIT Risks)
•  Net Importer
Central Bank
•  Bank of England (BoE)
•  World’s Oldest Central Bank, Created in 1694
•  Mandate: Price Stability – Keep Inflation Below 2%
•  Central Bank Chairman: Mark Carney
•  Minutes Released after Meeting
•  Carney Speaks after Quarterly Inflation Reports
Mark Carney
Until June 2019

United Kingdom
1.  Employment = Jobless Claims, Average Hourly Earnings
3.  PMI = PMI Manufacturing & Services
4.  Inflation = Consumer Prices
5.  GDP = GDP
7.  Central Bank Meetings & Minutes = BoE Meeting, Quarterly Inflation
Report
3:00AM ET / 8:00 GMT London Open
4:30AM ET / 9:30 GMT UK Economic
Releases
8:30AM ET/ 13:30 GMT US Economic
Releases
GBP TRADING TIP #1
Follows Interest Rate Differentials

Closely
Has Weak Correlation with FTSE

GBP TRADING TIP #2
Peaks after News Releases

GBP TRADING TIP #3
Reversals Likely after

London Close
GBP TRADING TIP #4
Likes to BREAK Round Numbers

GBP TRADING TIP #5
Strong Continuation Moves

GBP Crosses
Japanese Yen
Background
•  No Nicknames
•  3rd Most Actively Traded Currency
•  Most Liquid Free Floating Asian Currency
•  Manufacturing Oriented Economy

Trading Mechanics
USD/JPY Pip Value = $9.0 for 100,000 Units
JN Interest Rate = 3 Tiers
Key Metrics – Nikkei JGB-US 10 Yield
Central Bank
•  Bank of Japan (BoJ)
•  World’s Oldest Central Bank, Created in 1882
•  Mandate: Price Stability – Keep Inflation Near 2%
Haruhiko Kuroda
More QE and Negative Rates

Japan
1.  Employment = Jobless Rate
2.  Business Confidence = Tankan
3.  PMI = PMI Manufacturing & Services
4.  Inflation = Consumer & Producer Prices (CPI/PPI)
5.  GDP = GDP
7.  Consumer Confidence = Eco Watchers Survey

8:00PM ET / 01:00 GMT Tokyo Open
10:00PM ET / 3:00 GMT Economic Releases
1:00AM ET / 6:00 GMT Economic Releases
8:30AM ET/ 13:30 GMT US Economic Releases
JPY TRADING TIP #1
Can Sit Dormant for Days and

then Move Wildly
JPY TRADING TIP #2
Correlates well to
Risk OFF Trades
JPY TRADING TIP #3
#1 Funding Currency
JPY TRADING TIP #4
Vulnerable to Intervention
Squeezes
JPY TRADING TIP #5
Correlations with Yield

Spread & Nikkei
JPY Crosses
[email protected]

How To Trade USD, EUR, GBP, JPY: Kathy Lien and Boris Schlossberg

Uploaded by

Copyright:

Available Formats

How To Trade USD, EUR, GBP, JPY: Kathy Lien and Boris Schlossberg

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

How To Trade USD, EUR, GBP, JPY: Kathy Lien and Boris Schlossberg

Uploaded by

Copyright:

Available Formats

How to Trade USD, EUR, GBP, JPY

Kathy Lien and Boris Schlossberg

Every Currency Pair is Unique,

• Nickname – Greenback, Buck

• 85% of all Currency Transactions Involve the US Dollar.

• The World’s Primary Reserve Currency

• More Than 25 Currencies of Other Countries Peg Their Currency

• US Federal Reserve (FOMC)

2. Retail Sales = Retail Sales

3. PMI = ISM Manufacturing & Services

4. Inflation = Monthly Consumer & Producer Prices (CPI/PPI)

5. GDP = GDP

6. Trade = Trade Balance

7. Confidence = University of Michigan Consumer Confidence Index

Dollar Driven by U.S. Yields

Dollar Dictates where Commodity

Positive US Data May Not Always

USD Flows Will Often Reverse

1. United States • Services: 70.5%

Most Liquid Trading Instrument in

Tends to Trend Best Because of

Correlates with Risk Assets

Key Levels Generally Broken

• Nicknames – Pound, Sterling, Cable

• 4th Most Actively Traded Currency

• EUR/GBP just as important as GBP/USD

• Service Oriented Economy

• One of the Most Developed Capital Markets in

Until June 2019

2. Retail Sales = Retail Sales

3. PMI = PMI Manufacturing & Services

4. Inflation = Consumer Prices

5. GDP = GDP

6. Trade = Trade Balance

Follows Interest Rate Differentials

Has Weak Correlation with FTSE

Peaks after News Releases

Reversals Likely after

Likes to BREAK Round Numbers

Strong Continuation Moves

• 3rd Most Actively Traded Currency

• Most Liquid Free Floating Asian Currency

• Manufacturing Oriented Economy

More QE and Negative Rates

2. Business Confidence = Tankan

3. PMI = PMI Manufacturing & Services

4. Inflation = Consumer & Producer Prices (CPI/PPI)

5. GDP = GDP

6. Trade = Trade Balance

7. Consumer Confidence = Eco Watchers Survey

Can Sit Dormant for Days and

Correlations with Yield

You might also like

•  Nickname – Greenback, Buck

•  85% of all Currency Transactions Involve the US Dollar.

•  The World’s Primary Reserve Currency

•  More Than 25 Currencies of Other Countries Peg Their Currency

•  US Federal Reserve (FOMC)

2.  Retail Sales = Retail Sales

3.  PMI = ISM Manufacturing & Services

4.  Inflation = Monthly Consumer & Producer Prices (CPI/PPI)

5.  GDP = GDP

6.  Trade = Trade Balance

7.  Confidence = University of Michigan Consumer Confidence Index

1.  United States •  Services: 70.5%

•  Nicknames – Pound, Sterling, Cable

•  4th Most Actively Traded Currency

•  EUR/GBP just as important as GBP/USD

•  Service Oriented Economy

•  One of the Most Developed Capital Markets in

2.  Retail Sales = Retail Sales

3.  PMI = PMI Manufacturing & Services

4.  Inflation = Consumer Prices

5.  GDP = GDP

6.  Trade = Trade Balance

•  3rd Most Actively Traded Currency

•  Most Liquid Free Floating Asian Currency

•  Manufacturing Oriented Economy

2.  Business Confidence = Tankan

3.  PMI = PMI Manufacturing & Services

4.  Inflation = Consumer & Producer Prices (CPI/PPI)

5.  GDP = GDP

6.  Trade = Trade Balance

7.  Consumer Confidence = Eco Watchers Survey