Issue #9

Q2 2023

Global
Finance
Outlook

Experts’
Trading Tips
US & EU Indices,
GBP, EUR, CAD, JPY,
CNH, MXN, Silver,

PEAKED Gold, Oil, Crypto

RATES Trader
IN Q2? Mindset
 INTRODUCTION
In the just-ended first quarter of 2023, the market fluctuated under the influence of the global outlook on
interest rates. The US dollar was supported by America’s robust economic data and the Fed’s hawkish
stance. In Q1, the three U.S. stock indices fell continuously after a solid start, and gold followed suit, dropping
to the $1,800 level.

In Q2, the monetary policy outlook remains the primary factor driving global financial markets. Therefore,
investors should closely watch interest rate decisions and economic performance data. So, we will discuss
the potential direction of the market around the theme of “Will Global Rates Peak in Q2”? In this issue, we will
guide investors on their Q2 investment strategies and areas where they can find value.

Martin Lam
ATFX Chief Analyst of Asia Pacific

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 TABLE OF CONTENTS

GLOBAL FINANCE OUTLOOK 5

STOCK MARKET INDICES FORECAST 6

US Stock Indices: Is the Wall Street Rally Over? 7

European Stock Indices: Interest Rates Peak Will Set the Trajectory for European Stocks in Q2 2023 11

EXPERTS’ TRADING TIPS 16

GBPUSD & EURUSD:

If the BoE Signals Monetary Easing and Inflation Starts Falling, the GBPUSD Will Decline in Q2 17
Economic Stagnation and High Inflation in the Eurozone 22

USDCAD: BOC Is the First To Pause Rate Hikes, Weakening the CAD’s Appreciation Potential 26

USDJPY & USDCNH:

New BOJ Governor Maintains Ultra-Loose Monetary Policy As Bond Market Bets on Rate Hikes 29
Despite a Policy Divergence Between China and the US, the Offshore RMB Is Still Likely To Appreciate 33

USDMXN: Mexico’s Economic Projections Weaken, but Mexican Peso Beats US Dollar 35

Gold & Silver: As Interest Rates Approach Peak, Gold Seeks a Clear Uptrend 38

Crude Oil: Market Fears of a Global Recession Dampen the Demand for Crude Oil 42

Cryptocurrencies: Regulatory Pressure Slows Recovery Expectations Pushing Cryptos Lower 47

TRADER MINDSET 51

ATFX MARKET EXPERTS 55

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 Global
Finance Outlook
 Q2 Global
Finance Outlook
By Martin Lam, ATFX Chief Analyst of Asia Pacific
Since the beginning of the year, the U.S. economy
has shown strong momentum, with jobs and wages
continuously expanding. Consequently, America’s
economic growth has accelerated more than expected,
while its inflation remained above the 2% target set by
the Fed. Hence, the markets have generally raised the
potential peaks of the Fed Funds Rate (FFR). Currently,
markets universally predict that the Fed’s peak rate
hike target will be between 5.75% and 6%, which is
0.5% higher than the consensus target during Q1 of
5.25%-5.5%.
The market is considering the possibility that the Fed will
not pause rate hikes until the last one, which is scheduled
for July. The booster effect of the possibility of higher
rates on the market was maximised in the second half of
Q1. The collapse of Silicon Valley and Signature Banks,
followed by the systemic risks disclosed in the US banking
industry, convinced the market to reassess its expectation
about whether the Fed would raise its FFR further.
If more economic data and news events confirm the
expectation, the Fed will be prompted to adopt a hawkish
position formally. It means the market will again bet on the
prediction that rates will peak during Q2. Then, the financial
market may reproduce its trend from last December or
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early January to date, with the risk appetite rebounding.
American stocks and gold will start to rebound, while the
US dollar will fall after peaking along with Treasury yields.
So far, the unabated uptrend in global inflation is primarily
established, and the US economy still has a chance
at a soft landing. European countries have witnessed
shrinking inflation since the end of 2022. The Reserve
Bank of Australia and the Reserve Bank of New Zealand
have already begun slowing the pace of rate hikes
threatened by an economic downturn in Q4 2022. The
Bank of Canada suspended raising interest rates in Q1
2023, and the Bank of England is considering whether
to stop raising rates in Q2. If it becomes inevitable that
global central bank rates are about to peak, investors will
be more optimistic, setting the tone for a general rebound
in global stock markets.
Bulk commodity markets, directly linked to economic
recovery and stable rates, will have brighter prospects if
rates peak. If a sharp recession does not materialise and
inflation continues to drop, guided by the high interest
rates, the lingering pessimism may fade. In short, the
market will likely reverse course and rally if there are signs
of interest rates peaking.
5
 Stock Market
Indices Forecast
 US Stock Indices
Is the Wall Street Rally Over?
By Mohammed Shanti, ATFX Senior Market Analyst (MENA)
The US stock markets delivered a lacklustre performance
in February as jumpy investors hit the brakes following
January’s massive rally. The S&P 500 fell over 2%
in February, trimming its year-to-date returns to a
mere 3.9%.
Wall Street was spooked by crashing U.S. economic
data and weak earnings. Inflation reports showed that
the decline in inflation had flatlined, suggesting that the
Federal Reserve’s crusade against high prices was far
from over. At the same time, another robust jobs report
in February made it clear the US labour market was still
very tight.
However, the outlook for Q2 2023 may include a rebound
due to potential changes in the Federal Reserve’s approach
after the collapse of Silicon Valley Bank, Signature Bank,
and Silvergate Bank.
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Potential Fed Pause Could Stabilize the US
Financial System
The latest positive economic data from the US had dashed
hopes of a “Fed pause” or change in policy, causing further
downward pressure on risky assets. With concerns over
inflation and a possible recession lingering in the markets,
Wall Street’s future remained uncertain. In addition, the
Federal Reserve’s hawkish stance has dampened risk
sentiment, as investors worry about the prospect of higher
interest rates for longer.
However, recent events, such as the collapse of Silicon
Valley Bank, Signature Bank, and Silvergate Bank, might
force the Fed to pause the current rate hiking cycle to
stabilize the US financial system. The Fed will likely
continue monitoring the sticky components of the CPI
data to ensure inflation is heading in the right direction.
This could lead the markets to rebound and ease the
pressure on risky assets.
7
As the Fed faces the challenge of balancing the US
economy’s continued strength with the current high
inflation, its response to the recent bank collapses might
shift its stance on rate hikes. If the Fed changes its policies,
it could alleviate some of the concerns weighing on the
markets and support a rebound in the S&P 500.
Bracing for Higher Rates and Slower Earnings Growth
The reality is settling in as investors come to grips with
the above. Stocks are unlikely to keep climbing if the Fed
continues to tighten. It’s harder to justify more expensive
valuations for stocks in an environment where higher
interest rates will likely eat into profits. If inflation doesn’t
cool off soon, the Fed may have to keep raising rates
to 6%.
It is true that inflation numbers did drop but are still at very
high levels (x3 the Fed`s Target). The positive economic
numbers increasingly concern investors because they
could lead to tighter Fed policies for longer. The January
consumer price index numbers show that the inflationary
pressures are still at play.
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The January consumer price index (CPI) was +6.4%,
higher than economists had expected and more or less flat
compared to the December reading of +6.5%. The other
crucial monthly inflation report, the personal consumption
expenditures price index (PCE), rose annually to 5.4% in
January (from a seasonally adjusted 5.3% in December).
The Federal Reserve has increased its target range for
the federal funds rate by 4.5 percentage points during the
current tightening cycle. The expectation is that higher
interest rates will slow the overall spending rate in the US
economy, ultimately leading to inflation returning to the
Fed’s desired level of 2%.
Now the Fed faces the challenge of balancing the
economy’s continued strength and high inflation. Despite
the potential economic impact, the Fed has remained
committed to raising rates until inflation falls to 2%. Fed
Chairman Jerome Powell has dismissed suggestions
that the Fed should consider a higher inflation target.
Economists have urged the Fed to revise its aggressive
monetary policy to show its commitment to the market.
8
Earnings Disappoint Investors
The recent fourth-quarter earnings season has been
a mixed bag, leading analysts to have a somewhat
pessimistic outlook for the first half of 2023. S&P 500
companies have experienced a 4.8% decline in year-
over-year earnings during the fourth quarter.
This marks the first time the S&P 500 has seen negative
earnings growth since the third quarter of 2020. However,
the energy sector has been an exception, with 58%
earnings growth during the fourth quarter, thanks to the
war in Ukraine and the global commodity inflation spike
that sent energy prices soaring in 2022, helping many oil
and gas companies to generate record profits.
Following a slowdown in economic activity, the S&P 500’s
first negative earnings result was expected, as many
companies had warned about compressed margins and
weakening consumer demand in previous earnings calls.
However, what was worrying was the extent and speed
at which growth metrics fell compared to initial projections,
while future estimates have been downgraded multiple
times in recent weeks. The decrease in earnings figures
has led to even higher valuations measured by P/E
multiples, which makes the risk/reward ratio unappealing
for US equities.

The P/E ratio is a traditional way of measuring the value of a security, representing the number of years of profits required
to recover an investment in the stock at the current rate. The latest 10-year P/E Ratio for the S&P 500 is 28.7, 42% higher
than the average of 19.6 seen in the modern era. This places the current P/E 1.1 standard deviations above the modern-
era average, indicating that the market is overvalued.

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S&P 500 Fibonacci Levels Are Respected
Since its peak in November 2021, the S&P 500’s movement has closely followed levels identified by the Fibonacci analysis.
This can be seen in how the index’s lowest point in 2022 lines up with the 50% Fibonacci retracement level of the up-leg
between the pandemic lows and the all-time high, which spanned from 2,191 to 4,818.

Most recently, the rally that began this year encountered resistance around the 23.6% Fibonacci retracement level at
approximately 4,200. As a result, investors should consider examining the full range of Fibonacci retracements from the
post-pandemic uptrend to identify potential support and resistance levels.

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 European Stock Indices
Interest Rates Peak Will Set the Trajectory
for European Stocks in Q2 2023
By Dr. Mohamed Nabawy, ATFX MENA Market Analyst
The European Central Bank (ECB) continues its tightening
monetary policy to control inflation – despite major central
banks worldwide slowing the pace of rate hikes. The
ECB has raised interest rates by 3% in just 7 months to
reach their highest level since 2008, hoping that higher
borrowing costs will reduce demand and help stop the
rapid price increases.
The ECB President Christine Lagarde has already mapped
out the central bank’s this course since December 2022,
stressing that interest rates “must rise significantly and
continuously” to contain inflation adequately. The ECB
is expected to raise interest rates again during its March
2023 session, which it did by 0.50%, lifting its base
lending rate to 3.5%.
Inflation in the Eurozone has already eased to a lower-
than-expected level in the first quarter. In contrast, growth
in critical prices has increased, supporting the ECB’s drive
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to continue raising interest rates at a rapid pace. Consumer
price inflation in the 20 euro-denominated countries fell
to 8.5% in February from 8.6% in the previous month. A
significant drop in energy prices offset higher prices for all
other goods and services.
The scenarios outlined by Lagarde open the possibility
that a strong recovery in European equities in the year’s
second half may falter, driven by a possible recession in
the Eurozone and the cumulative effects of tightening
monetary policy.
The temporary easing of geopolitical tensions in the
Eurozone and the recovery of the Chinese economy after
abandoning its Zero-Covid policy fueled the strong rally
in European stock indices since the beginning of the year.
The rally extended the substantial rise of the benchmark
indices that started rising at the end of September 2022
and are up over 21% since then.
11
At the beginning of the year, the STOXX 600 index was
up 9.4% at 464 points. The FTSE 100 rose 2% in January
and February to reach 8,044 points before falling again by
4%. The German DAX 30 index also surged 14% to reach
15,706 points and later fell by about 2%.
Despite this, the Eurozone will likely avoid an economic
recession in 2023, which will not force the ECB to choose
between fighting inflation and driving the Eurozone
economy into contraction. Inflation may return to the ECB’s
2% target range by the end of 2024 or 2025, depending
on how close the eurozone economy is to witnessing peak
inflation. Therefore, the ECB’s ultra-low interest rates seen
in recent years may not return soon.
Effects of Continued ECB Interest Rate Hikes on
Equity Performance
The ECB’s insistence on aggressive interest rate hikes
exposes European stocks to sharp losses as growth
momentum slows in the coming months. The ongoing
economic recovery may fade during the second quarter
of 2023 when combined with the cumulative effect of
monetary tightening adopted by the ECB to combat
high inflation while analysts continue lowering their
earnings expectations.
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Several factors could prevent European equities from
pushing higher, including Europe’s ability to avoid a
recession. So far, optimism about China’s full reopening
and robust corporate earnings could continue fueling a
rally higher. In addition, the ECB’s recent rate hike and
the lack of projections about future rate hikes could also
support a rally in EU stocks.
Therefore, the closest scenario becomes a decline in
European stock indices in the year’s second half. We
may see the STOXX 600 index decline by up to 20%
to settle near 365 points by the third quarter of 2023,
coinciding with the possibility of a recession in the euro
area economy. Still, the index will likely recover again by
the end of this year to 430 points.
Expectations of further tightening monetary policy in the
United States and the Eurozone have since changed
following the recent collapse of Silicon Valley Bank,
Signature Bank and Silvergate Bank. As a result, the
Federal Reserve and the ECB will likely be more cautious
to avoid further turmoil in the markets during Q2 2023.
12
The DAX Monthly Chart
The short pressure continues on the German DAX30 in light of the ECB’s monetary tightening policy and
rising interest rates.

Technically, the DAX 30 is moving above the main uptrend line on the monthly chart. However, if it fails to break through
the resistance level at 15,417 points, it may fall back to the support level at 13,017 points (first target), then the next level
at 11,388 points (second target). These two levels are above the annual 200-day moving average and will maintain the
bullish momentum so long as the bullish trend line is unbroken.

The alternative scenario: If the index breaches the resistance level at 15,417 points, it may retest the second resistance
level at 16,277 points.

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 The FTSE Monthly Chart

Technically, on the monthly chart, the FTSE 100 is moving above the primary bullish trend line. However, if it fails to
break through the resistance level at 7,743 points, it may continue falling to the support level at 7,082 points (first target),
followed by the support level at 6,650 points (second target). The two levels are above the 200-day annual moving
average, provided the bullish trend line is unbroken.

The Alternative scenario: If the index breaches the resistance level at 7,743 points, it may retest the second resistance
level at 8,063 points.

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 Experts’
Trading Tips
 GBPUSD & EURUSD

If the BoE Signals Monetary Easing and Inflation

Starts Falling, the GBPUSD Will Decline in Q2

By Wisaruth Panprom, ATFX Market Analyst (Thailand)

An energy crisis erupted in Europe starting in February 2022 due to the conflict between Russia and Ukraine, causing
record-high inflation in the UK. As a result, domestic prices of products, services, and utility costs have risen significantly.
The UK economy rebounded slower than it was anticipated. In particular, the CPI (Consumer Price Index) ultimately hit a
record high of 11.1% in October 2022.

The UK CPI Chart

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However, with the intention of the Bank of England (BOE)
to tame surging record-high inflation by continuously
hiking interest rates, we will see that crisis start to ease in
2023. The BOE interest rate has been at 4.00% since last
year, indicating that the policy is functioning. Moreover,
the latest macroeconomic data, such as the UK CPI data
for March, has been declining since November 2022
and was at 10.4% at the time of writing. Hence, it is a
positive indication of the UK’s economy’s return to growth,
although the country’s inflation may still be high.
After BOE Chairman Andrew Baily recently announced a
pause in the central bank’s rate hikes, it will likely soften
its monetary policy considerably in Q2 2023. In the
two monetary policy meetings before the most recent
one, the BOE hiked interest rates by 0.75% and 0.50%,
The UK Interest Rate Chart
An analysis of the GBP in Q2, based on the above
fundamentals, indicates that the GBP could weaken,
mainly due to the sluggish interest rate increases that the
markets have begun to price in. Moreover, the UK economic
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respectively. Still, the situation has since changed as the
BOE started lowering its rate increases as inflation rises
less dramatically. Most global investors are considering
the prospect that the next BOE monetary policy meeting
will result in a 0.25% rate hike as the BOE starts to
maintain interest rates based on the above grounds.
When the interest rate was last changed in March 2023,
the BOE only increased it marginally, from 4.00% to
4.25%. Another critical argument favouring a more flexible
monetary policy was worries of a recession in the UK due
to the BOE’s high interest rate monetary policy. The BOE
Monetary Policy Committee (MPC) will meet this quarter
on May 11 and June 22 to make interest rate decisions.
The rate decisions will be based on significant economic
data released beforehand, especially the information
relating to UK inflation rates.
data released to date still does not look good. Therefore,
the price of GBPUSD will likely decline significantly in Q2
if we compare the economic strength of the GBP versus
the USD.
18
Investors should pay attention to the fundamentals of the
United States economy, particularly the Federal Reserve
Bank’s (FED’s) monetary policy, while also watching
the economic fundamentals of the United Kingdom. In
addition, investors’ attention should be on the external
factors that influence the trajectory of the GBPUSD price.
When FED Chairman Jerome Powell testified before
Congress about the possibility of the Fed hiking interest
rates once more to curb inflation, many expected the Fed
to keep hiking rates in Q2 2023. The optimism that the
US economy would keep expanding due to favourable
data, such as the declining inflation rates and the labour
The US Interest Rate Chart
In conclusion, analysts believe that the GBPUSD price will
likely move lower in Q2 2023, given the fundamentals
that impact it. The BOE is easing off the accelerator for
upcoming rate hikes because the monetary policies of
the two central banks, the Fed and BOE, are currently
opposed. A central bank maintaining an excessively tight
monetary policy amid recessionary worries could trigger a
financial and economic collapse. This is why the Fed will
likely hold off from raising interest rates out of concern for
the US economy and financial stability. However, getting
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market statistics, which continue to show strength, fueled
investor expectations. However, the situation has changed
drastically due to the US banking crisis, which could force
the Fed to stop hiking rates. The FED’s monetary policy
stance has shifted due to the failure of several banks,
including Silicon Valley Bank, Signature Bank, and Credit
Suisse, triggering significant losses and making investors
apprehensive about US interest rates, which may be
unacceptably high at 5.00%. The high interest rates could
increase the likelihood of a future financial catastrophe
affecting the US banking sector and the economy.
the inflation rate to fall as quickly as possible remains the
Fed’s primary objective. The release of important economic
data from the UK and the US gives a clear picture of their
inflation rates, a crucial factor that investors must pay
close attention to going forward. A country’s economic
growth indicators include the CPI, PPI, PCE, GDP, PMI,
and labour market data. The monetary policies of both
banks will be significantly affected by these crucial data
points, which could fuel volatility in the GBPUSD price in
Q2 2023.
19
According to the Fibonacci Retracement and Harmonic Pattern analysis marked on the primary swing, the GBPUSD in Q1
has reversed around 50% of the Fibonacci Retracement. A recent reversal is strongly supported by a pullback near the D
Point of the Butterfly Pattern at 1.14225, which is a strong reversal confirmation.

The GBPUSD Weekly Chart With the 50% Fibonacci Retracement

The GBPUSD Daily Chart With the D Point of a Butterfly Pattern

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Technically, the price of the GBPUSD is expected to fall in Q2 2023 and test the critical support levels, which is the goal of
the Harmonic Pattern theory calculated from Point A to Point D. Three significant levels, 1.16375, 1.13860, and 1.11350,
are expected to represent the downtrend’s support.

The GBPUSD Daily Chart With 3 Key Support Levels

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 Economic Stagnation and High Inflation in the Eurozone
By Linh Tran, ATFX Market Analyst (Vietnam)
While there have been some positive developments
in Eurozone confidence indicators since the start of the
year, the critical economic data is still not optimistic. Two
downward revisions of German GDP data and one of
Ireland’s GDP data brought the euro area economy to
the brink of a recession in the fourth quarter of 2022. We
cannot rule out further stagnation in the first quarter yet.
Regarding psychological indicators, consumer confidence
is still low, and actual evaluation components are still
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weak. After inventories built up late last year, production
is likely to remain stagnant. It is unlikely that China’s
reopening will be enough to shift the eurozone economy
into a better state.
Europe’s string of good economic news finally ended, with
last week’s data showing core inflation hit a record high
of 8.5%.
22
Higher-than-expected eurozone inflation data
reinforces the ECB’s tightening monetary policy stance
Lower energy prices have resulted in lower-than-
expected overall inflation in December and will continue
to push inflation further down. From March, energy prices
will experience a markedly negative fundamental effect.
In addition, the ECB’s survey of consumer expectations
this week shows that consumer inflation expectations are
deteriorating. Furthermore, core inflation keeps rising and
shows no signs of peaking. Expectations for selling prices
in the manufacturing industry have fallen significantly.
However, they remain close to all-time highs in the
services industry, suggesting that transferring higher
input prices to consumers is far from over. In addition,
higher nominal wage growth is expected this year and
the next; hence, it’s easy to understand the ECB’s concern
about persistently high core inflation.
Macro developments since the ECB’s February meeting
have failed to provide any relief to inflation and the inflation
outlook, so a 50bps rate hike at the March meeting was
expected, and it happened despite the unfolding banking
crisis.
The European Central Bank Continues Tightening Its
Monetary Policies
The European Central Bank may continue raising interest
rates to reach the 4% target. Hotter inflation data is
expected to underpin the 50 basis point increase the ECB
is planning for this month and reinforce the view among
central bankers that more significant moves are needed to
tame record-high inflation. The forecast at the beginning
of the year suggested that the euro interest rate would
reach 3.5% in early 2024. However, based on the current
context, the estimate was raised to 4%. The ECB deposit
rate is currently at 2.5%.

Hotter-than-expected inflation data from France and Spain has pushed traders to
bet on a 4% peak ECB deposit rate by February 2024

However, median projections in the Bloomberg survey suggest Eurozone CPI could be 5.6% this year, 2.4% next year
and 2.1% in 2025.

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ECB raised interest rates by 0.5%, what will happen
to the Euro?
While the euro exchange rate was higher on the ECB
announcement, the latest price action confirms that EUR/
USD is more closely tied to risk sentiment than short-
term interest rate dynamics. In the current environment,
decisions made in Washington and any upcoming news
on the health of the global banking industry following the
collapse of Silicon Valley Bank are the more important
drivers of EUR prices than the ECB’s actions and
comments. So, even if the EUR fluctuates in reaction to
the ECB President Christine Lagarde’s statements, the
move could easily be obscured by news related to the
banking sector.
China’s reopening could lower global inflation by about 1 to 2 percentage points
depending on how its economy performs this year
Fed Chairman Jerome Powell spooked the markets in the
US after warning that the Federal Reserve would return
to larger rate hikes if needed. Furthermore, Powell said
that the Fed would most likely have to hike rates to a
higher level (5.6% instead of the previous 5% target) than
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That means the Euro’s momentum, thanks to the ECB’s
decision to raise interest rates to 3.5%, might be less
robust given the current investor risk aversion.
Weak US Economic Growth, SVB’s Breakdown May
Cause the Fed To Raise Its Target Interest Rate
The Chinese government has officially set an economic
growth target of “around 5%” for 2023 and avoided
mentioning any significant economic stimulus measures
for the year. The target is the lowest in over three
decades and down from last year’s target of 5.5%; Both
targets are interpreted as less optimistic about global
economic growth prospects, given China’s position as a
manufacturing giant.
previously thought after the latest economic data was
better than expected. These comments led to a sell-off in
stocks and short-term government bonds while the dollar
appreciated.
24
Finally, Silvergate Capital (Bank) announced plans to cease
operations after the latest digital asset (cryptocurrency)
crisis decimated the bank’s financial strength. But it wasn’t
the only bank that ran into trouble in March, with Silicon
Valley Bank collapsing and becoming the second-largest
bank failure in US history.
The recent failure of two US banks, SVB and Signature, was
understandably responsible for the Fed’s re-evaluation of
its tightening outlook. This has resulted in the two-year
EUR/USD swap spread falling to its narrowest since
October 2021. Previously, the EUR/USD was expected to
trade significantly higher than the current levels, but risk
sentiment could be a significant barrier.
However, I think the EURUSD could have a small rally. The
easing of the Fed’s hawkish tone could drive the EURUSD
to rise to about 1.08-1.09.

The EURUSD weekly chart

Investors should pay attention to the 1.035-1.055 support zone. If the banking sector concerns are averted, and the Fed’s
hawkish tone turns more dovish, it could quickly boost the EURUSD towards around 1.15.

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 USDCAD

BOC Is the First To Pause Rate Hikes, Weakening

the CAD’s Appreciation Potential

By Dean Chen, ATFX Guest Analyst

On March 8, the Bank of Canada announced its interest
rate decision to keep its benchmark lending rate
unchanged at 4.5%, marking an end to the aggressive
rate hike policy that had lasted for more than a year. A
high interest rate environment usually leads to stagnant
economic growth. Canada’s year-on-year GDP growth
rate was 2.07% in Q4 2022, much lower than the 2.77%
recorded in Q3. This was the crucial reason the Bank
of Canada stopped raising interest rates. Meanwhile,
Canada’s high inflation rate has eased significantly. The
CPI growth rate in January was 5.9% after falling for
seven consecutive months. The purpose of the BOC’s
tight monetary policy — to curb record-high inflation —
has been achieved. Canada’s long-term CPI growth rate
target is 2%. The country’s CPI growth rate is expected to
drop to 3% by mid-2023 before reaching the central bank’s
2% target by the end of this year. In May 2020, Canada’s
unemployment rate surged to 13.7%, and many workers
could not find suitable jobs due to COVID-19. That figure
plunged to 5% in January, reaching a healthy employment
standard and bringing the country’s labour market back
to normal. For the Bank of Canada, suspending its tight
monetary policy is meant to fuel GDP growth and observe
whether the CPI growth rate will continue to fall. The
central bank may restart interest rate hikes if the CPI
growth rate fails to slow down as expected.

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 Canada’s y-o-y GDP growth rates
The central banks of major economies have maintained
tight monetary policies throughout most of Q1 2023, but
the situation is changing following the recent banking
crisis. For example, the European Central Bank, the Bank
of England, and the Federal Reserve hiked rates by 0.25%
in March instead of 0.50% as expected. The central banks
have also changed their hawkish stance, saying they
will only hike rates if the economic data supports such a
move. The Bank of Canada stopped raising rates while
the Fed is still raising rates. One immediate result is that
the Canadian dollar (CAD) will be devalued against the US
dollar (USD). The one-year Canadian bond yield is 4.71%,
with little chance of a further increase, while its American
counterpart is at 5.16% and will rise if the Fed raises rates.
Therefore, money will most likely flow out of Canada into
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America, increasing the US dollar’s purchasing power and
providing a sustained boost for the USDCAD.
The Canadian dollar is a commodity currency significantly
affected by crude oil prices, its leading foreign exchange
earner. Since December 2022, the West Texas Intermediate
(WTI) crude oil benchmark price has fluctuated between
$70 and $80. Neither Russia’s production cut of 500,000
barrels a day nor the White House’s selling of tens of
millions of barrels from its crude oil reserves brought
the crude oil prices out of this volatile range. Given an
operating cost of $40 per barrel, the current oil price of
($70-80) could contribute massive revenues to Canada. If
the WTI price remains in the above range in Q2, the CAD
will get a sustained boost.
27
 USDCAD Daily Trend Chart

Technically, the USDCAD is in a bullish trend over the
short term, while fluctuating in the medium term, its long-
term perspective is also bullish. The latest market price
of 1.3843 is blocked by the resistance R1:1.3976, the
highest level since June 2022, on its upward trend. Traders
should observe the currency pair’s price action once it
hits the resistance level. If the K line takes the form of the
long red line, the probability of continuing bullish trend is
high; if the K line takes the form of a Doji, the short-term
bullish trend will likely change into mid-term fluctuation,
starting a downward trend from R1 to S2. S1:1.3475 and
S2:1.3208 are short-term support and mid-term support
levels, respectively. If the USDCAD starts a downward
trend, it may bottom out at S1 or S2.

TRADER MAGAZINE 28
 USDJPY & USDCNH
New BOJ Governor Maintains Ultra-Loose Monetary
Policy As Bond Market Bets on Rate Hikes
By Dean Chen, ATFX Guest Analyst
Haruhiko Kuroda, the current Governor of the Bank of
Japan, will end his term on April 8, 2023, to be succeeded
by renowned economist Ueda Kazuo, a former member
of The Bank of Japan’s Review Committee. At a National
Diet nominee confirmation hearing on February 24, Ueda
Kazuo stated that maintaining the ultra-loose monetary
policy was appropriate since the country’s inflation had
not fallen to the 2% target set by the BOJ. Japan’s CPI grew
4.3% in January, the highest rate since 1982, marking 10
months since the inflation figure breached the BOJ’s 2%
target. In Ueda Kazuo’s words, the high inflation levels
had failed to “continuously stabilize at the 2% target set
TRADER MAGAZINE
by BOJ”, but the BOJ still refused to change its YCC policy.
Ueda Kazuo offered the following reason: “The recent
inflation rise in Japan is primarily triggered by the soaring
import costs of raw materials rather than strong domestic
demand”, which is true. High global inflation was triggered
by surging costs of goods and services caused by the
supply shortages of energy, food and semiconductor
chips, and Japan is no exception. High inflation caused by
supply shortages is often temporary, and only a booming
demand side can push the macroeconomy into a recovery
cycle. We believe that Ueda Kazuo will not rush to change
BOJ’s interest rate policy for this reason.
29
 Nominal CPI growth rate of Japan
Triggering a demand boom is extremely difficult for the
Japanese economy, given its demographic structure.
According to the Ministry of Internal Affairs and
Communications data, in 2022, the population over 75
reached 19.37 million, accounting for more than 15% of
the total population; and the population over 65 accounted
for nearly 30% of the total population. According to
the internationally recognized standard, a country is
an “ageing country” when its population aged over 65
exceeds 7% of its total population. Visibly, Japan is more
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than four times over this threshold. The annual number of
Japanese newborns is less than one million. The fertility
rate is low, and the country lacks young people with high
consumer demand. Since the demographic structure
cannot be changed over a short duration, Japan’s inflation
rate will hardly remain high once the prices of imported
products return to normal. Therefore, based on this
pessimistic expectation, we do not believe the BOJ will not
significantly loosen Japan’s YCC policy in the short term.
30
 Japan 10Y bond yield

In the meantime, bond market funds did not delay in
betting that the Bank of Japan would start raising interest
rates. On December 20, 2022, the BOJ expanded the
regulation range of Japanese government bond yields
from ±0.25% to ± 0.5%. On the same day, the 10-year
Japanese government bond yield rose from 0.25% to
0.47%, close to the upper limit of 0.5%. The 10-year
bond yield remained high until the BOJ decided to keep
the benchmark interest rate unchanged on March 10,
2023. We expect the contradiction between the bond
market’s eager rate hike expectations and the BOJ’s
stable YCC policy will be prolonged. Which side wins will
be determined by whether Japan’s CPI growth rate goes
up or down in the long run.

TRADER MAGAZINE 31
 USDJPY daily trend chart

Technically, the USDJPY is in a bullish position over the
medium term and a bearish position over the long term.
Its upward trend is under stress, and the recent volatility
is due to the pullback from the first resistance R1:138.17.
The USDJPY may start falling again, but as long as the
price stays above the support level at S1:131.58, the
medium-term uptrend will continue. A bounce is very
likely to occur after the end of the current pullback. It is
noteworthy that the market price is very likely to fall below
S1, given the long-term downtrend of USDJPY.

TRADER MAGAZINE 32
 Despite a Policy Divergence Between China and the
US, the Offshore RMB Is Still Likely To Appreciate
China’s inflation rate is very low, with a CPI growth rate of
just 1% in February, which is both below the reasonable
inflation level of 2% and below the 2.1% CPI growth rate
recorded in January, posing a risk of deflation. In addition,
China’s unemployment rate was 5.5% in January,
above the healthy unemployment level of 5%, with
weak demand in the labour market. According to Wang
Xiaoping, the Minister of Human Resources and Social
Security, the number of Chinese college graduates will
be 11.58 million in 2023, and the structural contradiction
between recruitment difficulty and employment difficulty
will remain prominent. Under the pressure of low inflation
and high unemployment, the People’s Bank of China
Superimposed chart of nominal y-o-y CPI growth rates of China and the US
Notably, the divergence between Chinese and American
monetary policies will likely not lead to the depreciation of
the RMB because regulatory policies limit the free outflow
of RMB funds. China’s one-year government bond yield is
just 2.24%, while its American counterpart has hit 5.16%,
about twice the Chinese rate. Many RMB funds want
to buy high-interest overseas bonds. However, China’s
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will likely continue its loose monetary policy this year.
The United States is the opposite of China on a macro
scale. Although America’s CPI growth rate has declined
for the past seven months, it remains as high as 6.4%;
while the unemployment rate was just 3.4% in January.
The US added 517,000 non-agricultural jobs in January,
indicating robust demand in the labour market. The Fed’s
interest rate decision on March 22 saw the central bank
announce a 0.25% rate hike. On the one hand, the PBC
is cutting interest rates to boost employment, while on
the other hand, the Fed is raising interest rates to curb
inflation. The monetary policies of China and the U.S. are
significantly different.
annual limit on the total amount of QDII funds allowed
to flow overseas is less than $50 billion; the amount is
too small to affect the USDCNH pair, which has a trillion-
dollar trading volume. Therefore, we believe that the
future trend of the USDCNH cannot be accurately judged
solely from the perspective of the PBC’s monetary policy.
33
From the perspective of government regulation, the
offshore RMB exchange rate serves China’s macro
economy. If the macro economy needs to boost export
industries, the offshore RMB will depreciate, and USDCNH
will tend to rise. If the macro economy emphasizes internal
circulation and needs to boost domestic consumption,
the offshore RMB will appreciate, and the USDCNH will
decline. As China’s CPI growth rate is only 1%, there is
a significant risk of deflation and a severe shortage of
domestic demand. China’s macro economy urgently
demands a domestic consumption boost in 2023. The
Technically, the USDCNH is in a bearish position in the
medium term and a bullish position in the short term. The
price currently trades within the R1 range (7.0153~6.9393)
and has failed to surpass R1 in the last ten trading days.
An upcoming pullback is expected. But the short-term
TRADER MAGAZINE
“consumption” here refers to ordinary goods such as cars,
home appliances, digital products, and special goods
such as real estate. Real estate is a pillar industry within
China’s national economy. In the past year, the transaction
volume in China’s real estate market continuously declined,
leading to a GDP growth rate of just 3% in 2022, far below
the government’s target of 5.5%. Only by retaining RMB
funds in its territory can China ensure enough consumer
demand for ordinary goods and real estate. Based on this,
we believe that the primary trend of USDCNH in 2023 will
be downward.
bullish trend could continue as long as the lowest point
of the pullback is above the support at S1:6.7941. If the
lowest point is below S1, the USDCNH short-term trend
will shift from bullish to bearish.
34
 USDMXN
Mexico’s Economic Projections Weaken, but
Mexican Peso Beats US Dollar
By Eduardo Ramos, ATFX LATAM Market Analyst
In the first quarter of 2023, the Mexican currency (peso)
continued its strong streak against the US dollar, fueled
by factors such as a good investment climate and the
Mexican Central Bank’s (Banxico’s) tightening policies
aimed at containing inflation, which enabled it to reach
levels last seen about 5 years ago. The Mexican peso
dropped below 18.00 pesos per US dollar during the
first week of March, with the price being a psychological
barrier it had failed to overcome since April 2018.
Recapping a bit of last year, currencies such as the British
pound, the euro and the Colombian and Chilean pesos
touched historic lows in 2022. The Mexican peso ended
the year as the second of only four currencies to appreciate
against the US dollar, along with the Russian ruble, the
Brazilian real and the Peruvian sol. In February, the peso
was the strongest currency in the world compared to all
emerging market currencies after the release of the US
employment report. The peso’s outlook remains favourable
after inflation in Mexico fell from 7.91% to 7.62%.
Looking at the first quarter of 2023, the Mexican peso
has benefited from several factors that have maintained
investor confidence. First, the weakness of the US dollar
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against other currencies despite the Federal Reserve
raising rates. Second, the strength of the Mexican economy
in recent months has contributed to the strengthening of
the peso due to the crucial inflow of resources in dollars
thanks to foreign remittances.
Other factors underpinning the peso’s strength are the
reactivation of the tourism sector and foreign direct
investment through the “nearshoring” trend by North
American companies. Furthermore, the stability of the
country’s finances, that is, Mexico may not be growing
according to most analysts’ growth expectations, but it
has stable public accounts.
Reviewing the country’s growth, Mexico’s GDP grew by
3% in 2022 thanks to the excellent performance of its
exports. It is also important to mention that the peso’s
appreciation also occurred within the favorable context of
new financing flows. At the end of February, the Mexican
government announced an investment of US$5 billion by
electric car company Tesla to build an assembly plant in
Nuevo León in the North of the country, which is expected
to be the largest EV factory in the world.
35
Professional opinions say that the Mexican peso is one
of the best-performing currencies in the world and
that most traders are analysing emerging markets in
Latin America with great interest. Although there are
some exceptions, most Latin American countries led by
Mexico are considered solid investment destinations due
to the potential returns investors can achieve. As the
second largest economy in the region, Mexico is a prime
investment destination.
Specifically, for Mexico, the significant remittances and the
rise in reference rates, which have been at 11% since the
beginning of February, have boosted the peso because
the rate differential with other countries and the United
States has made peso investments pretty attractive. This
is primarily driven by stock market operators looking for
more liquid alternatives in the form of cash investments,
given the significant volatility in the stock markets.
However, not everything is good for the Mexican economy
since the country’s GDP is not expected to rise that much.
Most analysts have lowered their latest growth forecasts
compared to their initial forecasts at the beginning of the
year. The outlook remains strong, as the industrial sector
and exports are the Mexican economy’s biggest pillars.
TRADER MAGAZINE
Mexico has several factors that work in its favour, so we
think the peso’s exchange rate will continue to strengthen.
The first factor is its low labour costs; the second is its
proximity to the United States, with which it shares a
land border. The third factor is the renewal of the free
trade agreement between the United States and Mexico,
which came into force in 2020, making it attractive for
automotive companies to invest in Mexico. Tesla’s $4.5
billion investment which could be operational next year,
joins a similar move made by BMW and is part of the
greater nearshoring trend. The nearshoring trend has
allowed American companies to bring their supply chains
closer home by building production centers in Mexico
instead of China.
Finally, we must consider that although the market is
discounting the US dollar’s weakness, this could change
if circumstances scare traders and make them more risk-
averse. A clear example was the March 10 session, where
the Mexican peso weakened by 0.78%, its sharpest
daily drop since June 2022. The move was triggered by
the collapse of Silicon Valley Bank, which caused many
traders to opt for safe-haven assets such as the dollar
during the session.
36
Technical Analysis
The chart below shows us a well-structured bearish trend
after the price traded sideways above 19.50 for several
months. The breakout of this zone is the crucial point to
watch out for, as trades below this level will be the most
reliable indicator of the pair’s direction. The peso traded
between 18.6 and 17.89 at the end of Q1; the 17.9
support will be the next level to beat before reaching new
target levels, such as 17.45.
TRADER MAGAZINE
In the last daily candlesticks, we can see that after falling
so much, some market participants took advantage of
the lower prices to buy, causing demand volume levels to
increase, taking the price from 17.96 to 18.48. It will be
crucial to monitor how prices behave in the areas marked
on the chart to find trades in favour of the trend.
Banxico’s interest rates and the FED’s rate decisions will
be the catalysts that could lead the peso to trade below
18 pesos per dollar.
37
 Gold & Silver
As Interest Rates Approach Peak,
Gold Seeks a Clear Uptrend
By Jessica Lin, ATFX (Asia Pacific) Global Market Analyst
In Q1 of 2023, the gold price tried to rally higher but failed
to defend its gains. As of March 8, spot gold had virtually
erased all the gains made in early 2023, continuing a
sideways battle between the expectation of terminal
interest rates and the economic outlook.
The US dollar showed better-than-expected resilience
in Q1. The market was expecting more rate hikes by the
Fed and a higher peak rate at the end of Q1, especially
after a hawkish speech by Fed Chairman Jerome Powell
at the semi-annual monetary policy hearing before
Congress; hence, inflation may continue to slow in Q2. As
Treasury yields peak, the US dollar will struggle to regain
its strength, allowing gold to rebound.
Global central banks will likely extend their anti-inflation
efforts in 2023 but at a much slower speed and intensity.
This trend will remain a critical guidance for markets.
More central banks are expected to end their tightening
monetary policies after the first half of 2023, especially
the Fed, which is a critical player.
TRADER MAGAZINE
Our general idea is: As the Fed slows rate hikes and
inflation continues to drop under control, a decline in the
US dollar’s real rate of return will drive bullish gold and
silver prices in the second half of 2023. This environment
is expected to trigger higher precious metal prices heading
into the second half of Q2.
The global economic recovery is typically bad for gold
because its crucial safe-haven function is erased. But
economic expansion often positively affects the physical
consumption and demand for gold. Given the gold trend is
fundamentally determined by the changes in the supply-
demand relationship, higher demand tends to lead to
higher prices.
In Q2, the global economy will recover at a faster rate. As a
leader of the global economic recovery and a traditionally
generous gold consumer, China will see accelerated
demand repair its consumer market in Q2 as expected,
creating a favourable environment for gold investment.
Silver will benefit from increasing demand during periods
of economic growth via industrial applications.
38
However, people should note that the uncertainty
regarding inflation and interest rates is typically
accompanied by volatility in the macro environment.
While precious metals can help investors traditionally
cushion their portfolios against falling stock prices, gold
and equity markets share a remarkable similarity in their
price tendencies in the face of interest rate changes, as
noted in our outlook for the last quarter. In Q1, a plunge
in American stocks was followed by plunging gold prices,
Technically, in Q1, the gold price once declined to its
original level at the beginning of this year. However, it has
remained above the previous lows and significant support
levels seen at the end of 2022 and has since rebounded.
The gold price is officially challenging the psychological
threshold at $2,000, boosted by signals that the Fed
might suspend interest rate hikes amid an evolving US
banking sector crisis.
The monthly chart shows that the gold price gained
support on the long-term trend line in Q4 2022 and has
TRADER MAGAZINE
indicating that there is still room to fall before gold ushers
in a new substantial rebound.
In early March, DJIA futures reached their lowest levels
since November 2022, and the lowest gold price since
the end of December was simultaneously recorded. But in
the second half of Q2, if the above positive factors are in
place, a rebound in gold prices will be more specific than
that of U.S. stocks
been rising while consistently staying above the main
moving average. The next focus is the $2,078 price target,
which has already served as resistance twice in 2020
and 2022. If the Fed hikes interest rates, for the last time
as part of the current tightening cycle, at its next meeting
in May, the gold trend may change. The gold price is
expected to rise and head towards the $2,197 resistance
level. If the uncertainties in the economy and financial
markets manage to push gold prices higher, there is an
opportunity for it to challenge a new high ($2,321).
39
Regarding support, the 20-week and 50-week moving
averages have been in the $1,835 to $1,685 range. If
the demand for safe-haven assets weakens, leading to a
correction in the gold price, it might fall back into the range
and fluctuate before starting an upward or downward
trend. During this period, if the US economic data
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outperforms and inflation remains higher than expected,
there is still room for US bond yields to rise before the
Fed’s policy orientation becomes clear. The gold price may
fall to hit the long-term support level at $1,564. If it finds
some support during the trend, investors may seek buying
opportunities when gold is low.
40
Although the fundamentals and price trends have
been consistent, silver prices fluctuate more than gold.
Technically, we must first focus on the trading volume
within the downward trend, then predict its direction
based on how the price crosses the moving average.
If the price crosses above the range’s ceiling, it might
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reach the critical resistance range at ($29.07-$30).
Clearing the resistance will open more upside potential
towards $31.84. However, if silver maintains its intra-
range trading, traders must focus on the low range from
($17.22-$14.38). If the global economic recovery in Q2 is
weaker than expected, it might hurt the silver price.
41
 Crude Oil

Market Fears of a Global Recession

Dampen the Demand for Crude Oil

By Jason Tee, ATFX (Asia Pacific) Global Market Strategist

An implied build-up in global petroleum inventories, an The oil price forecast is upbeat on global economic
increase in rate hike expectations and inflationary fears prospects, mainly driven by China’s lifting of its Covid
have affected a host of risk assets while boosting the US restrictions, directly boosting the demand for crude
dollar, causing crude oil prices to struggle and seesaw oil. The production of crude oil worldwide could surge
around the $71 and $82 levels since last year. by 2.32 million barrels per day, or 2.3%, according
to the Organization of the Petroleum Exporting
Will the oil price resume its rally, or will it continue to Countries (OPEC).
weaken in Q2 2023? Here is the latest oil price forecast:

TRADER MAGAZINE 42
However, the strengthening of the US dollar, along with
the rapid monetary tightening by the US Fed, has led
to some fragility in the global economy. According to
MacroMicro.com, the global manufacturing and composite
PMIs increased slightly during the first quarter of 2023.
Such a pessimistic outlook weighed on the investor’s risk
appetite and contributed to a decline in the open interest
in crude oil.
TRADER MAGAZINE
Nonetheless, the continued monetary tightening may
dampen global economic activity and trigger a recession
in the coming months. Meanwhile, the OPEC report stated
that global GDP growth would slow to 2.5% from 3.0%
in 2022.
In summary, despite the production surge fueled by China’s
economic reopening, the market might stay relatively flat
through Q2 2023 due to the uncertainty regarding global
economic growth. Therefore, crude oil could continue
trading within the $70 - $80 a barrel range.
43
Technical Perspective
Crude oil traded at $67 a barrel after the price broke
below the above range. The sellers may take the lead as
the RSI continues to point lower. Hence, the commodity
could potentially extend its weakness toward $62.19 per
barrel (its 29th November 2021 Low) or $60 per barrel (its
19th April 2021) support region.
Alternatively, from a bullish perspective, a close above
$76 a barrel will indicate the presence of buyers. The
buying will come from an aggressive and potentially
TRADER MAGAZINE
bullish outlook. If this move generates enough upside
momentum, the next resistance level would be on the
radar at $80 per barrel.
To summarise, crude oil looks bearish within the short-
term picture. However, we expect the crude oil price to
move within $80 - $70 during Q2 2023. A break above
the upper resistance of $81 is expected to enhance the
buying appetite, while a break below the range may push
the oil price into a bearish trend.
44
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 Cryptocurrencies
Regulatory Pressure Slows Recovery Expectations
Pushing Cryptos Lower
By Martin Lam, ATFX Chief Analyst of Asia Pacific
Last year, the cryptocurrency market faced the worst
drawdown when global central banks raised interest
rates sharply. The situation was compounded by
shocks arising from the collapse of FTX and a series
of cryptocurrency companies. Since then, the crypto
markets have established a bottom, promising to continue
their rebound.
However, Bitcoin, like other risk assets, failed to usher
in the expected recovery in the first two months of Q1
2023. To make matters worse, the Fed’s more hawkish
stance than expected and the anxiety surrounding the
risk associated with digital assets kept the cryptocurrency
market in a whirlpool.
In early March, the sudden collapse of Silicon Valley Bank
(SVB) marked the second-largest failure of a U.S. financial
institution since the 2008 financial crisis. The collapse also
triggered a significant earthquake in the cryptocurrency
industry. The news sent cryptocurrency prices down
across the board, with bitcoin briefly dipping below the
$20,000 level for the first time since January.
The collapse of SVB sent shockwaves through the global
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financial markets. One of the reasons why it triggered
a decline in crypto assets is that more than $3.3 billion
(about 8%) of the $40 billion in stablecoin reserves, the
second largest segment of the cryptocurrency market,
was deposited with SVB.
Things took a turn for the better after U.S. financial
regulators rushed to bail out SVB, and Bitcoin reversed
course and headed higher to recover the $20,000 level.
Considering the close relationship between digital asset
investment companies and SVB, the market was worried
that some crypto asset companies might face challenges.
However, crypto firms are still vulnerable over the short
term due to the adverse events affecting cryptocurrency
exchanges and miners since last year.
The current uncertainty fully reflects investor concerns
about the fragility of the cryptocurrency industry, and
the high likelihood of greater supervision is still one of
the significant risks currently facing the cryptocurrency
market. Especially since the collapse of FTX last year
caused politicians and regulators to call for stricter laws
to govern the digital assets industry.
47
Although the crypto industry has undergone baptism
by fire through various events and risks, cryptocurrency
assets are still highly volatile as they have always been.
For national regulators seeking greater control over
crypto assets, their decision-making focus remains on
transparency and asset security, which is undoubtedly
necessary. It will continue to guide investors’ emotions.
Despite the above uncertainties, Bitcoin still has some
positive fundamental factors, including the prospect of a
full recovery in risk assets in the second half of this year
as aggressive interest rate hikes by global central banks
slow. Besides the certainty of “halving” bitcoin mining
rewards, the rising demand and adoption could continue
supporting the price and indirectly boosting related
cryptocurrencies’ upward trend.
Therefore, before a likely rebound in the Bitcoin (BTC)
price in H2, the price might bottom in Q2 due to the
abovementioned risks and uncertainties. As shown in
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the figure below, the support levels for the BTC price are
its 20-week moving average support ($19,503) and its
previous bottom ($15,727), respectively. From this weekly
BTC price chart, after the price reached support levels (at
$15,727 and $19,503), respectively, at the end of last
year and the last quarter, the moving average golden
cross appeared. Therefore, we expect that during H2,
the price will stay in the correction range of the previous
downward trend while the gold ratio rebound extends
by 50% (0.5), causing the BTC price to surge to $32,003.
Alternatively, it may challenge the higher resistance at
61.8% (0.618), fueling a price rally to $35,844. However,
the two resistance levels might see breakthroughs, where
the price rises to new resistance levels, that is, at the
73.6% (0.736) or 85.2% (0.852) levels of the golden ratio.
On the contrary, if Bitcoin’s (BTC) price starts to decline
due to various risks and uncertainties in cryptocurrency
assets, we need to pay attention to its 20-week moving
average and previous low of around $19,503 at the end
of last year on the weekly chart.
48
The leading bullish factor for ETH is the increasing maturity
of its smart contract DApp application. With the launch of
Ethereum 2.0 and the improvement in DeFi applications,
investors might find excellent opportunities to make long-
term investments. Technically, from the weekly chart, the
ETH price has been hovering from $1,196 to $1,916. The
previous low of $883 reached in June 2022 is still worth
attention as a support level. In terms of resistance, in Q1,
the cryptocurrency market saw a rebound in response
Although global central banks and investors are evaluating
when interest rates will peak, and when they will suspend
interest rate hikes, this could boost cryptocurrencies.
However, as a financial asset, cryptocurrency assets
have many systemic risks and uncertainties related to
regulation, which may pose significant challenges or
TRADER MAGAZINE
to the Fed’s suggestion that interest rates had already
peaked. The $1,916 level as the price range ceiling is
a critical level that must be overcome. After breaking
through $1,916, the price will be able to challenge the
$2,500 level. It is expected that under the impact of the
global central banks’ halt in interest rate hikes, the ETH
price might rally towards $3,186, break it and reach the
3,586 level where its decline began.
downside risks. In the 2nd quarter of 2023, investors
should remain highly vigilant against the possibility of
further adjustments in cryptocurrency prices due to the
above systemic risks and the introduction of stricter laws
and regulations.
49
Trader
Mindset
 Trader Mindset
The Key to Successful Trading
By Gab Santos, ATFX Market Strategist (Philippines)
It takes more than just knowledge of the markets and
a well-crafted trading strategy to excel in the trading
industry. A trader’s mindset plays a crucial role in
determining their success, as the trading world can be
both stimulating and demanding. This article delves
into seven fundamental components of a successful
trader’s mindset.
1. Discipline
Discipline plays a vital role in a trader’s mindset and
is a crucial aspect of success in trading. It involves
adhering to your trading plan and consistently following
your rules. It requires avoiding impulsive decisions and
maintaining your focus on your objectives. A lack of
discipline in trading often leads to emotional decisions
that result in losses.
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2. Patience
Patience is another critical element of a successful
trader’s mindset. Trading is not a get-rich-quick scheme.
Building a profitable trading career takes time, effort,
and patience. Successful traders understand that profits
are not always instant, and they often must wait for the
right trading opportunity to appear.
3. Perseverance
Perseverance is the capacity to persist and maintain
consistent effort despite challenging circumstances.
Traders with strong perseverance can bounce back
from losses, learn from their mistakes, and improve
their trading skills. A successful trader doesn’t give up
at the first sign of failure. Rather than viewing failure
negatively, they approach it as an opportunity for
personal development and growth.
4. Flexibility
The financial markets are dynamic and are constantly
changing. A trader who is rigid and inflexible in their
thinking will have difficulty adapting to these changes.
Successful traders understand the importance of being
flexible and adaptable. They are willing to change their
strategy when the market conditions call for it.
51
5. Emotional Control
Emotional control is another critical element of a successful
trader’s mindset. Trading can be highly emotional, and
traders who let their emotions get the best of them often
make poor decisions. Successful traders can control their
emotions and remain calm under pressure. They know
how to manage their emotions and not let them interfere
with their trading decisions.
6. Risk Management
Risk management is essential to successful trading.
Traders with a good understanding of risk management
know how to manage their risk exposure and limit losses.
They also understand the importance of preserving their
capital and avoiding unnecessary risks.
7. A Learner’s Mindset
Traders who succeed possess a continuous learning
mindset. They consistently strive to enhance their trading
abilities and knowledge by studying the markets, reflecting
on their mistakes, and exploring new strategies and
techniques. A learning mindset is crucial in maintaining
a competitive edge in the dynamic trading environment.
In conclusion, a successful trader’s mindset combines
discipline, patience, perseverance, flexibility, emotional
control, risk management, and a learning mindset.
Developing these qualities takes time, effort, and practice,
but it is essential to achieving long-term success in
trading. By cultivating these qualities, you can improve
your trading skills, reduce your losses, and increase your
chances of achieving your trading goals.

This information has been produced by a third party, for general information purposes only, and is not
indicative of future results. AT Global Markets LLC takes no responsibility for its accuracy or completeness.
Any opinions expressed do not reflect those of AT Global Markets LLC. This information does not take into
account your personal circumstances or objectives, and should therefore not be interpreted as financial,
investment or other advice, or relied upon as such. You should seek independent advice before making
investment decisions. Reproduction of this information, in whole or in part, is not permitted.

HIGH RISK INVESTMENT WARNING: Trading Foreign Exchange (Forex) and Contracts for Differences (CFDs)
is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a
loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot
afford to lose. You should be aware of all the risks associated with trading on margin.

TRADER MAGAZINE 52
 The Future of Trading is here

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 Top 10
Retail FX/Other Volumes by MT4/MT5 Usage

$456 billion 46,000+

Q4 2022 Total Quarterly Active Traders
MT4 Volume in Q4 2022
 Market Experts

Ramy Abouzaid
ATFX (AE) Head of Market Research

Ramy has worked for top FX brokerage firms for over six years in the UAE and has been the Chief
Market Analyst for well-known UK and Australian brokers before joining ATFX. He has been in the
financial industry for over a decade. Moreover, he has successfully trained hundreds of traders in
his career in the Middle East.

Martin Lam
ATFX Chief Analyst of Asia Pacific

Martin has over 20 years of experience in global investment and consultation. Familiar with
the world stock indices, precious metals such as gold and silver, crude oil and forex. Martin
manages the “Martin Currency Trading Company” and it has in the past worked with a number of
well-known international financial corporations and institutions. Martin is a sought speaker, and
has held over 40 seminars and training sessions in South East Asia and China in 2018 and has
been publishing daily market reports for investors.

Dean Chen
ATFX Guest Analyst

Dean has participated in the global capital markets for over six years with experience to operate
with capital up to 150 million RMB. He has served various positions including risk controller, trader,
and analyst, and has received recognition from numerous industrial key players. Dean has created
the “Hook-Shaped Theory” trading system, and it combines both technical and macroeconomic
analysis, to help with the precise timing to enter and exit the FX markets.

Eduardo Ramos
ATFX LATAM Market Analyst

Since 2014 he entered the world of forex and cryptocurrencies in a stock company with offices
in Guadalajara / Mexico and based in Hong Kong, there he learned the basics of the markets
and after that initial experience he has completed more than six trading courses of forex and
cryptocurrencies. He has been operating in real account for two years and has been part of ATFX
for 1 year.

TRADER MAGAZINE 55
 Jason Tee
ATFX (Asia Pacific) Global Market Strategist

Jason has over eight years of experience as a participant in the global forex markets. With a fruitful
investment portfolio and valuable insight on investment strategies, he’s built a strong reputation in
the industry. He’s won a coveted international forex contest that included more than 1,800 foreign
exchange traders, proving his advanced trading skills. He is also a member of the Chartered Market
Technician (CMT) Association.

Jessica Lin
ATFX (Asia Pacific) Global Market Analyst

Jessica has more than five years of trading experience in multiple markets including FX,
commodities, global indices. She specialises in applying global macro-economics to her analysis
and combining this with technical analysis to develop trading concepts and strategies. She also
delivers educational seminars and webinars for traders of all levels. Prior to joining ATFX, Jessica
worked as a market analyst and financial content strategist for a number of well-known financial
institutions and distinguished market news/trader websites.

Dr. Mohamed Nabawy

ATFX MENA Market Analyst

Nabawy has more than eight years of experience in the global markets field including FX,
commodities, and global stock markets indices. He has worked for several multinational companies
as a market strategist. In addition to generating actionable investment ideas. Nabawy has
successfully trained hundreds of global markets investors throughout the years in his career.

Linh Tran
ATFX Market Analyst (Vietnam)

Linh graduated from the University of Science of Ho Chi Minh City. She is currently a CFA student
at SAPP Academy. Linh is a trader and investor with 5 years of experience in the financial markets.
Her trading portfolio includes commodities like Gold, Crude Oil, FX pairs like EUR/USD, GBP/USD,
and US Stocks. “Value investing” is her dominant focus and favourite investing strategy.

Gab Santos
ATFX Market Analyst (Philippines)

With 6 years of trading experience in the forex markets and as a trading instructor, Gab Santos has
held seminars in the leading Philippines universities. He started trading in 2015 as a college student
and fell in love with the markets. Gab is a technical and fundamental trader. He also conducts
weekly webinars with his clients and shares his market insights on Telegram and YouTube.

TRADER MAGAZINE 56
 Mohammad Shanti
ATFX Senior Market Analyst (MENA)

Mohammad has a Master’s degree from London in global financial markets, and five years
of experience in the FX world focusing primarily on teaching clients to be successful traders.
He specialises in technical and fundamental analysis, with his strategies emphasising the
importance of risk management.

Frankie Tan
ATFX Market Analyst (Malaysia)

Frankie has 8 years of experience in trading financial markets, including stocks, futures, and
foreign exchange. He is skilled in combining fundamental and technical analysis, and adheres to
trading strategies such as following market trends and entering at key points. He enjoys trading
in global financial markets and also provides online and offline seminars for clients to better
understand financial markets and trading. He has unique research on the trading psychology of
different market periods and has extensive practical trading experience.

Wisaruth Panprom
ATFX Market Analyst (Thailand)

With more than 5 years of experience in the forex market, in technically and fundamentally. As a
result, he truly learned and understood the conditions of trading in volatile markets. Whether it is
the price movement of currencies, gold, oil, and the stock market. In addition, his experience as a
technical trading lecturer for the past 3 years has made him understand the real needs of traders
either trade by short-term or long-term trading techniques.

TRADER MAGAZINE 57
www.atfx.com