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Global Forex Trading Strategy, July 20, 2023

Welcome to Chump Profit, your go-to source for easy-to-read market insights to help you navigate the exciting world of Forex trading. In this blog, we'll provide you with an in-depth overview of today's market events and expectations that may impact the Forex market. Stay informed, as being aware of these developments can be valuable in making well-informed trading decisions.

Forex Trading Strategy for beginners.

Goldman Sachs Reports Weak Quarter

Goldman Sachs, a prominent Wall Street giant, faced significant challenges in the investment-banking sector, resulting in a staggering 58% drop in second-quarter earnings. The decline was attributed to a combination of an investment-banking slump, real estate markdowns, and a goodwill write-down in its consumer business. As a result, the firm's return on equity slid to a concerning 4%, marking it as the worst among the top US banks. However, CEO David Solomon remains optimistic, stating that the mergers and capital-markets business is cyclical and will eventually recover. Analysts are closely monitoring the bank's actions and are eager for the firm to articulate confidence in overcoming its current hurdles.

Microsoft's AI-Driven Rally

Microsoft's stock has been soaring, primarily due to its impressive progress in the field of artificial intelligence. CEO Satya Nadella's total windfall from the company now exceeds $1 billion, fuelled by substantial equity grants, salary, bonuses, and dividends. The tech giant's stock has returned over 1,000% since Nadella took the helm. Microsoft's strong focus on AI-driven technologies has played a crucial role in its continued success and growth, capturing the attention of investors worldwide.

Netflix's Crackdown on Password Sharing

Netflix's aggressive efforts to curb password sharing have yielded impressive results. In the second quarter, the company added a remarkable 5.89 million new customers, more than doubling Wall Street's estimates. This surge in subscribers marked Netflix's best second quarter since the depths of the pandemic three years ago. By cracking down on password sharing, the streaming giant has successfully retained and attracted new customers, contributing to its robust performance.

Famous apple logo, an apple with a bite taken of it silhouette, black apple, grey backgound,

Apple's AI Ambitions

In recent months, Apple has been quietly working on ambitious AI projects that could rival industry giants like OpenAI and Google. While the company is making significant strides in AI development, it has yet to reveal a clear strategy for releasing these technologies to consumers. Several teams within Apple are collaborating on the project, emphasizing the company's dedication to this transformative technology.

Tesla Faces Challenges

Tesla, the innovative electric vehicle manufacturer, has been facing some challenges, leading to a shrink in profitability during the second quarter. The company adopted a strategy of cutting prices to increase sales volume, driven by competition and consumer budget constraints. Despite beating earnings and revenue expectations, Tesla's gross margin has been impacted by these price cuts and increased inventory levels. CEO Elon Musk, however, remains optimistic and believes that sacrificing margins for increased production will lead to a higher valuation in the future.

Tesla's significant investments in projects like the Cybertruck and Dojo, an in-house supercomputer, have also contributed to reduced profits. While the company is on track to produce a record 1.8 million vehicles in 2023, factory upgrades and the ongoing development of the Cybertruck may temporarily slow down production.

Wheat Prices Surge Amid Export Conflicts

Wheat prices experienced a substantial surge following a decade-high daily increase on the previous day. Conflicts over grain exports from the Black Sea region, particularly due to Russian threats against ships sailing to Ukrainian ports, have escalated tensions. The Black Sea grain deal, which facilitated Ukrainian exports through the corridor, was terminated by Russia. The closure of this vital artery for Ukraine's sales abroad could significantly impact the next crop's market supply.

Dennis Voznesenski, a senior agriculture analyst at Rabobank Group, believes that reduced availability of grain from Ukraine could lead to lower prices, reduced farm margins, and lower planting in the long term.

Oil Prices Steady Despite Demand Concerns

Oil prices have stabilized despite persistent demand concerns. Crude stockpiles in the US have decreased, with inventories at the Cushing, Oklahoma, storage hub showing the most significant reduction since October 2021. However, decreased demand for refined products such as gasoline, distillates, and jet fuel has tempered some of the positive effects.

The recent revival of the US dollar added to the bearish sentiment for oil prices. As commodities are priced in dollars, a stronger dollar makes them more expensive for buyers in other currencies. Crude has been trading in a narrow range recently and is still marginally down this year. The focus remains on China's efforts to revive its economic growth, which has had limited impact on the nation's crude imports.

Gold Rises on Federal Reserve Speculations

Gold prices have surged to above $1,980 an ounce, reaching their highest levels in two months. This growth was triggered by easing US inflation, which raised hopes that the Federal Reserve might be approaching the end of its current monetary policy tightening cycle. Although the central bank is expected to raise interest rates by 25 basis points this month, traders have scaled back expectations for further rate increases this year. Investors are closely observing the initial jobless claims data in the US for insights into the strength of the labour market. Both the European Central Bank and the Bank of England are also expected to raise rates in their upcoming meetings, despite signs of easing inflation. Additionally, the People's Bank of China has maintained its one and five-year loan prime rates unchanged in July, defying expectations of further policy easing to stimulate growth.

XAU/USD Gold  Bar chart showing forex and commodities prices, green/red candles depict daily trading trends. Includes moving average, Bollinger bands, and RSI.

What's your Forex Trading Strategy - Knowledge is Power:

As a potential new Forex trader, understanding global events and economic indicators is paramount to your success. Staying informed about these developments, analysing trends, and gaining insights into the factors influencing currency movements can significantly improve your trading decisions. Remember, education is the foundation of successful trading, and with dedication and knowledge, you can confidently navigate the Forex market. Stay tuned for more updates from Chump Profit, where we strive to equip you with the tools you need to succeed in Forex trading!

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Trading and investing carry financial risks and could lead to partial or complete loss of funds. Invest only what you can afford to lose and seek advice from an independent financial advisor if you have doubts about your investment choices.


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