This week, traders are primarily focused on the rate decisions of major central banks, such as the Federal Reserve and Bank of England. Alongside these, the US Jobs Report is slated for release, serving as a critical indicator for the US’ economic health. Traders and investors are advised to be cautious, as these events could drive market fluctuations.

BOJ Rate Statement (31 October 2023)

In its September meeting, the Bank of Japan (BoJ) unanimously voted to keep its key short-term interest rate at -0.1% and the 10-year bond yields at 0%. 

Analysts predict that the central bank will keep these interest rate levels in its upcoming meeting on 31 October.

Canada Gross Domestic Product (31 October 2023) 

Canada’s economy showed stagnation in July, following a 0.2% decline in June. 

Analysts expect a 0.1% growth for Canada’s GDP in August, with the figures set to be released on 31 October.

US FOMC Rate Statement (2 November 2023)

During its meeting in September, the Federal Reserve (Fed) maintained the target range for its funds rate at a 22-year high of 5.5%. 

Analysts predict that the Fed will keep interest rates steady at 5.5% in the upcoming meeting on 2 November.

Bank of England Rate Statement (2 November 2023)

In its September meeting, the Bank of England held its policy interest rate at 5.25%, the highest level since 2008. This was influenced by the latest inflation and labour data. 

As the next meeting approaches on 2 November, analysts predict that the central bank will maintain the rate at 5.25%.

Canada Employment Change (3 November 2023) 

The Canadian economy added 63,800 jobs in September 2023, the highest in eight months. However, the unemployment rate held steady at 5.5% for the third consecutive month.

Looking ahead, analysts forecast an addition of 24,600 jobs for October. These figures, due for release on 3 November, are also expected to show a slight rise in the unemployment rate to 5.6%.

US Jobs Report (3 November 2023)  

The US nonfarm payrolls saw a increase of 336,000 in September, while the unemployment rate stayed steady at 3.8%.

For October 2023, the data set to be released on 3 November is anticipated to report an addition of 172,000 jobs, with the unemployment rate projected to remain at 3.8%.

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Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

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Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Several key events are expected to influence the financial markets this week, including interest rate decisions from the Bank of Canada (BOC) and the European Central Bank (ECB). In light of this, we recommend traders to exercise caution in their trading preparations, keeping in mind the potential for increased market volatility.

Here are some key highlights to keep an eye on during the week:

UK Claimant Count Change (24 October 2023) 

The number of people claiming unemployment benefits in the UK increased by 900 in August 2023. 

Updated figures will be released on 24 October, with analysts expecting an additional increase of 2,300. 

Flash Manufacturing PMI for Germany, the UK, and the US (24 October 2023)

Germany’s manufacturing Purchasing Managers’ Index (PMI) climbed from 39.1 in August 2023 to 39.6 in September 2023. Meanwhile, the UK’s manufacturing PMI for the same period increased from 43 to 44.3. Finally, the US’ manufacturing PMI for the same period rose from 47.9 to 49.8.

Updated figures will be released on 24 October, with analysts expecting manufacturing PMIs of 40.1 for Germany, 44.7 for the UK, and 49.5 for the US.

Flash Services PMI for Germany, the UK, and the US (24 October 2023)  

Germany’s services PMI rose from 47.3 in August 2023 to 50.3 in September 2023. Conversely, the UK’s services PMI declined from 49.5 to 49.3 during this period, while the US’ services PMI also fell from 50.5 to 50.1 during the same period.

Analysts’ forecasted services PMIs for October 2023 are as follows: 50.1 for Germany, 49.4 for the UK, and 49.9 for the US. 

Australia Consumer Price Index (25 October 2023)

The Consumer Price Index (CPI) in Australia increased by 5.2% in August 2023, up from the 4.9% rise recorded in July 2023. 

Analysts are expecting a growth rate of 5.4% for September 2023, with updated figures to be released on 25 October.

Bank of Canada Rate Statement (25 October 2023)

The BOC maintained its overnight rate target at 5% during its September 2023 meeting, marking another pause in its tightening cycle. The bank indicated that future rate decisions would hinge on the most recent economic indicators.

The next rate statement is set to be released on 25 October, with analysts expecting rates to remain at 5%.

European Central Bank Main Refinancing Rate (26 October 2023) 

During its September 2023 meeting, the ECB increased its main refinancing rate by 25 bps to 4.5%. The decision to hike the interest rate was closely contested among ECB members, with the meeting minutes revealing that they were divided by tactical considerations. 

Analysts expect the central bank to maintain a rate of 4.5% following its upcoming meeting on 26 October.

US Advance GDP (26 October 2023) 

The US economy expanded at an annualised rate of 2.1% in Q2 2023, down slightly from the 2.2% growth in Q1 2023.

Data for Q3 2023 is scheduled for release on 26 October, with analysts projecting a growth rate of 4.3%.

US Core PCE Price Index (27 October 2023) 

The Core Personal Consumption Expenditure (PCE) Price Index for the US, excluding food and energy, rose by 0.1% month-over-month in August 2023. This was the smallest increase since November 2020.

Data for September 2023 is scheduled for release on 27 October, with analysts expecting a growth of 0.3%.

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Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

Dear Client,

Please note that the dividends of the following products will be adjusted accordingly. Index dividends will be executed separately through a balance statement directly to your trading account, and the comment will be in the following format “Div & Product Name & Net Volume ”.

Please refer to the table below for more details:

The above data is for reference only, please refer to the MT4/MT5 software for specific data.

If you’d like more information, please don’t hesitate to contact info@vtmarkets.com.

The story of Japanese candlesticks unfolds in 18th century Japan, a time when rice trading was a pivotal economic activity. Merchants and traders required a reliable method to analyse and predict price movements of rice, a commodity of immense importance. This necessity led to the development of what we now know as Japanese candlesticks. 

Japanese traders, in their quest for a more intuitive and visual way to interpret market movements, created a graphical representation that would later revolutionise the world of financial analysis. The candlestick charting technique was born, allowing them to observe the price action in a structured and insightful manner. 

Fast forward to the present day, Japanese candlesticks have become an integral part of technical analysis in financial markets across the globe, particularly in the vast arena of Forex trading. The elegance and effectiveness of this tool have stood the test of time, making it a cornerstone of modern trading strategies. 

Understanding Japanese candlesticks is more than just learning about patterns and shapes. It’s about delving into a historical narrative that encapsulates the evolution of financial markets and the human desire to decode the enigma of market behaviour. 

By grasping the essence of Japanese candlesticks, traders gain a powerful lens through which they can decipher price movements, enabling them to make informed and strategic trading decisions. 

In this guide, we will explore the fundamentals of Japanese candlesticks and equip you with the knowledge needed to navigate the Forex market confidently. 

Understanding Japanese Candlesticks 

Japanese candlesticks serve as the cornerstone of technical analysis in the realm of Forex trading. These simple yet powerful graphical representations offer invaluable insights into price movements, making them an essential tool for traders. 

Structure of a Candlestick 

A candlestick is like a visual snapshot of the price movement over a specific time period. It encapsulates three crucial components that provide a comprehensive view of market dynamics: 

• _{Body: The central, solid part of the candlestick represents the price range between the opening and closing prices during the given time frame. If the closing price is higher than the opening price, the body is typically coloured green or white, indicating a bullish movement. Conversely, if the closing price is lower than the opening price, the body is coloured red or black, indicating a bearish movement.} 
• _{Wick (Upper and Lower Shadows): The thin lines, often referred to as the wicks or shadows, extend from the body at both ends. The upper shadow denotes the highest price reached during the time period, while the lower shadow represents the lowest price. These wicks help visualise the price fluctuations and volatility.} 
• _{Shadow: The entire length from the highest point of the upper shadow to the lowest point of the lower shadow is termed as the shadow, signifying the entire price range for that period.} 

Types of Candlesticks 

Candlesticks come in various shapes and forms, each conveying unique market sentiments. They are broadly categorised into three types: 

• _{Bullish Candlesticks: These candlesticks signal a price increase during the specified time period. Their bodies are usually green or white, illustrating a positive market sentiment and a potential uptrend.} 
• _{Bearish Candlesticks: Conversely, bearish candlesticks indicate a price decrease over the designated time frame. Their bodies are commonly red or black, symbolising a negative market sentiment and a potential downtrend.} 
• _{Doji Candlesticks: The Doji candlestick is a special case where the opening and closing prices are nearly equal, resulting in a very short or non-existent body. Doji candlesticks signify market indecision and often precede significant price movements.} 

Colour Coding of Candlesticks 

Understanding the colour coding of candlesticks aids traders in swiftly identifying market trends and interpreting price movements: 

• _{Bullish Candlesticks: Typically, these candlesticks are portrayed in green or white, signifying optimism and an upward price movement.} 
• _{Bearish Candlesticks: Conversely, bearish candlesticks are usually depicted in red or black, indicating a pessimistic outlook and a downward price movement.} 

Interpreting Japanese Candlesticks 

To effectively utilise Japanese candlesticks in Forex trading, understanding common candlestick patterns and their implications is crucial. These patterns can provide valuable insights into market sentiment and potential trend changes, aiding traders in making informed decisions. 

Common Candlestick Patterns 

• _{The Doji candlestick is a significant pattern that signifies market indecision. It occurs when the opening and closing prices are very close to each other, resulting in a candlestick with a very short or non-existent body. Doji patterns suggest that neither buyers nor sellers have gained control, often preceding major price movements.} 
• _{The Hammer candlestick pattern is characterised by a small body at the top and a long lower shadow, resembling a hammer. It typically occurs after a downtrend and signals a potential price reversal. Hammers indicate that sellers drove the price lower during the session, but buyers managed to push the price up, showcasing potential buying interest.} 
• _{A Shooting Star candlestick pattern is the opposite of a hammer. It has a small body at the bottom and a long upper shadow, resembling an inverted hammer. This pattern occurs after an uptrend and implies a potential bearish reversal. It suggests that although buyers pushed the price higher during the session, sellers entered the market and pushed the price down, indicating potential selling pressure.} 
• _{The Engulfing candlestick pattern involves one candle completely “engulfing” the previous one. In a bullish engulfing pattern, the first candle is smaller and bearish, followed by a larger bullish candle. This suggests a reversal in the current downtrend. Conversely, a bearish engulfing pattern occurs during an uptrend, indicating a potential reversal to a downtrend.} 
• _{A Spinning Top candlestick is characterised by a small body and long upper and lower shadows. This pattern reflects market indecision, showcasing a battle between buyers and sellers. Spinning tops suggest that neither buyers nor sellers were able to dominate, leaving the market uncertain about its direction.} 

Analysing Length and Shape 

Apart from candlestick patterns, the length and shape of the candlestick body and wicks provide additional insights into market sentiment: 

• _{Candlestick Body Length: A long bullish (green or white) or bearish (red or black) body indicates strong buying or selling activity during the session, reflecting market conviction.} 

• _{Wick Length: Long wicks signify price fluctuations and uncertainty. Longer upper shadows indicate potential resistance levels, while longer lower shadows indicate potential support levels.} 

Applying Japanese Candlesticks in Forex Trading 

To leverage Japanese candlesticks effectively in your trading strategy, follow these tips: 

1. Identify Trends 

• _{Identifying Trend Reversals: Look for reversal patterns like the Hammer or Shooting Star after a prolonged trend. For instance, a Hammer after a downtrend could signal a potential trend reversal to the upside.} 
• _{Spotting Continuation Patterns: Patterns like Bullish or Bearish Engulfing can suggest that the existing trend is likely to continue. If the pattern aligns with the current trend direction, it provides confidence in holding or adding to a position.} 

2. Combine with Indicators 

• _{Moving Averages: Utilise moving averages to identify the overall trend direction. When a candlestick pattern aligns with the moving average direction, it provides a more robust confirmation of potential market movements.} 

• _{Relative Strength Index (RSI): RSI is excellent for gauging overbought or oversold conditions. When a candlestick pattern suggesting a reversal aligns with RSI indicating an overbought or oversold market, it strengthens the reversal signal.} 

3. Set Entry and Exit Points 

• _{Entry Points: Use bullish patterns like Bullish Engulfing or Hammer as signals to enter a trade, especially if they align with a trend confirmation from other indicators. Place your entry point just above the high of the pattern.} 
• _{Exit Points: For exit points, utilise bearish patterns like Bearish Engulfing or Shooting Star. These patterns can indicate potential price declines, prompting you to exit a trade. Set your exit point just below the low of the bearish pattern.} 
• _{Implement Stop-loss and Take-profit Strategies: Always incorporate stop-loss and take-profit levels to manage your risk effectively. Determine your stop-loss based on the pattern’s low for bullish trades and high for bearish trades. Adjust your take-profit levels based on the potential price movement indicated by the pattern.} 

Common Mistakes and How to Avoid Them 

Avoid these common errors to enhance your candlestick analysis: 

• _{Overcomplicating Analysis: Keep your analysis simple and focused on the most essential patterns. Overcomplicating can lead to confusion and poor decision-making.} 
• _{Ignoring Market Context: Consider broader market trends and economic indicators alongside candlestick patterns to make well-informed trading decisions.} 
• _{Trading Solely Based on Candlestick Patterns: While candlesticks are powerful, relying solely on them can be risky. Always consider a holistic approach to your analysis.} 

In conclusion, mastering Japanese candlesticks is a fundamental step towards becoming a successful Forex trader. By understanding their structure, interpreting patterns, and applying them effectively, you can gain valuable insights into market sentiment and potential trends. Avoiding common mistakes and integrating candlestick analysis into a comprehensive trading strategy will set you on the path to success in the dynamic world of Forex trading. Keep learning and practicing to refine your skills and achieve your trading goals.