We have again closed another profitable month and are pleased to announce a final figure of 7% profit, which, as I am sure you will agree with, is a massive improvement over the last few months
As discussed in the last update, we decided to leave the US-centric markets like Nasdaq alone, manage our positions responsibly within them and instead revert back to the safety of the FX market. This strategy will continue to be adopted throughout 2023, producing more profits and exposing us to much less risk in the future.
Fund Overview
Novus Black is now almost two years old and has established itself as a successful private fund. Over the coming weeks and months, we expect a substantial increase in AUM as the sales pipelines come to fruition, allowing us to initiate expansion plans, deploy new tactics and strategies, build our professional team, add further funds, and create more sustainability, protection and growth potential.
One question we get asked is what issues we are facing and what we are doing to correct these. Based on that question, we thought it would be a good idea to address the only pressing issue we have and, in turn, continue reassuring all investors that Novus Black is very proactive, constantly adapting and overcoming situations that could cause harm.
As we stand now, we are still sitting in the over-inflated, very much media-manufactured US markets. Due to the level of unpredictability, and although, as predicted, the market is dropping, we still would prefer not to be in these short positions. Therefore, to rectify the situation, we are using our profits to close out these trades either in a break-even state or taking small amounts of profit.
We are not looking to make serious gains from the US Market. We want to wind up the positions, allowing us to reduce the drawdown and risk and concentrate efforts back on the FX Market, where we have dominated for the last two years. As we see the AUM increase each month, Novus Black will have higher levels of its own capital to inject into the market and rapidly wind down the positions, freeing up available margin.
Long-term capital protection and fund longevity are always of paramount importance to us, and we will ensure that every step is taken to grow sensibly while always reducing overall risk and vulnerability.
June Trading Overview
In June, the US dollar experienced a marginal weakening on a DXY basis, despite the Federal Reserve’s hawkish rhetoric. The market was surprised by several major news events:
- US Debt Ceiling Suspension: The US breached its debt ceiling cap, but a bill was passed to suspend it until January 1, 2025.
- RBA and BOC Rate Hikes: The Reserve Bank of Australia (RBA) increased interest rates by 25 basis points, defying market expectations. Similarly, the Bank of Canada (BOC) unexpectedly raised interest rates by 25 basis points.
- Fed’s Pause: The Federal Reserve paused its benchmark interest rate for the first time in over a year after 10 consecutive increases.
- ECB Rate Hike: As predicted by the market, the European Central Bank (ECB) raised its policy rate by 25 basis points.
- BOE Rate Hike: In response to concerning inflation data, the Bank of England (BOE) implemented a 50 basis point interest rate hike.
The US dollar strengthened against all G10 currencies, ending the month strongly. The likelihood of a July rate hike by the Federal Reserve remains uncertain, pending higher inflation or continued strength in the labour market.
China’s economic recovery slowed in Q2, bolstering the US dollar. To counteract the slowdown, Chinese policymakers introduced additional policy stimulus measures. China’s economic recovery showed signs of losing momentum at the beginning of Q2, providing further support for the US dollar. Domestic policymakers in China have responded to slower growth by implementing more policy stimulus.
The euro (EUR) rebounded against the US dollar, reversing most of its previous sell-off in May. After reaching a low of 1.0635 at the end of May, the EUR/USD pair climbed back towards the upper range of the year-to-date levels, fluctuating between 1.0600 and 1.1000.
During the accompanying press conference, President Lagarde of the European Central Bank indicated that another 25 basis points hike at their next meeting in July was highly likely. However, the jump in US rates caused the euro to open lower on Friday, June 30, hitting its lowest level since June 14 (Fed Day) at 1.0835. It retraced to the 1.0930 area and closed at 1.0910.
The British pound (GBP) retraced nearly half of its gains since May 25 (~1.2310), finding support around 1.2590 on Friday, June 30. It briefly retraced to 1.2725 during the trading day and closed at 1.2690.
The price of gold gained traction and rose towards $1,920 on Friday, June 30, following softer-than-expected May PCE inflation readings from the US.
The Canadian dollar has been performing well among G10 currencies. The market is divided on whether the Bank of Canada will continue its tightening cycle in July, as the policy rate currently stands at 4.75%.
July Forecast
Key Factors in the Month Ahead:
As we enter the second half of 2023, investor sentiment has been influenced by growing concerns of a looming recession. However, the reopening of the travel and leisure sector continues to provide positive momentum, particularly during the upcoming key holiday season. This should offer further support to earnings and credit metrics in those industries.
The U.S. economic data released at the end of June demonstrated strength across various indicators. Jobless claims declined, the housing market surpassed expectations, and there were encouraging signs of business equipment spending.
Investor focus will be on the U.S. jobs report, CPI inflation data, the Fed’s policy meeting, as well as the start of the Q2 earnings season.
Central banks remain focused on inflation, and the resilience of the economic data is reinforcing their hawkish positions. Despite the typically quieter summer conditions that follow the 4th of July holiday, the data calendar remains packed with significant releases.
The U.S. dollar continues to show strength, with the DXY (Dollar Index) potentially edging up towards the 103.65 level unless influenced by fixing flows.
July FOREX Technical Analysis Forecast
DXY has entered its third consecutive week, trading within a range of 103.00 to 101.00.
EUR/USD has completed a downward wave, reaching 1.0835. It could potentially decline further to 1.0825, followed by a continuation to 1.0760.
GBP/USD is currently consolidating around the 1.2700 level. If it breaks below the range, a potential decline could lead to 1.2550, followed by further consolidation around 1.2490.
USD/JPY experienced a growth wave, reaching 145.03. In July, it could potentially decline to 143.90. If this level is breached, a drop to 143.20 may be expected.
USD/CHF is currently consolidating between the range of 0.8920 and 0.9015 without a clear trend. If it breaks above the 0.9020 level, there is potential for an increase to 0.9060.
AUD/USD is forming a consolidation range around 0.6600, extending to 0.6670. A potential decline to 0.6590 could follow, with further downward movement to 0.6550. If the resistance at 0.6670 is broken, the next target would be 0.6730.
NZD/USD, if it breaks the 0.6160 level, could target the range between 0.6170 and 0.6230. On the other hand, if downward pressure persists below 0.6100, the next target would be 0.6050.
USD/CAD The daily chart has reached the upper boundary of the 1.3285 region, and there are indications of a potential correction towards the key resistance level around 1.3320.
XAU/USD (Gold) has gained momentum and advanced towards $1,920 by the end of June. It completed a decline to 1893.00. If the price breaks out of the range upwards, the correction could continue to 1932. Conversely, if there is a downward breakout, a new wave of decline might occur, reaching 1885.
Please note that this information is based on hypothetical data and should not be considered financial advice. It’s important to consult with financial professionals or trusted sources for accurate and up-to-date market information.
Chestertons Partnership
As one of the only London companies to join Forbes Global Properties and one of the world’s oldest Estate Agents, Chestertons have cemented its position within the property market.
Novus Black & Chestertons are joining forces to provide its sophisticated clients with a private investment opportunity with the regulatory structure and performance results to produce monthly sustainable profits.
We are very excited about this relationship, and the benefits for both companies will be substantial. As the partnership progresses, we will keep you all updated.
FX Blue & Reporting
Over the past few months, Novus Black has been notified on several instances that FX Blue is reporting inacurate and confusing data. As FX Blue is a third-party service which connects independently to our MT4 trading accounts via its own developed API link, we have no control over how the information is gathered. As such, we have opted to remove FX Blue and create our own reporting tool within the Novus Black account system.
Now, when you log into your account and go to “Results”, you will be able to see a live feed of our brokerage accounts and the accurate data of gross profit, gross loss, and net profit for each month that we have been trading. As time goes on, we will look to implement additional statistical analysis tools in this section for those individuals who like to delve deeper. However, for now, the reporting tool replaces FX Blue until such time as a better alternative is discovered/developed.
Please rest assured that the data, which is connected and taken directly from our brokerage accounts, is checked for accuracy throughout each day and will update regularly to ensure data is as current and relevant as possible. The drawdown will be viewable as a percentage of the overall AUM under the heading “Risk”. Monthly realised profit will continue to be reported throughout the accounts system and updated several times daily.
