Good morning. In the 1600s, Dutch traders created the first stock exchange... and also the first market bubble, by bidding tulip prices to insane levels. At one point, a single tulip bulb was worth more than a house.

Moral of the story: FOMO isn’t new, it just used to come with petals.

-Jordon Mellor, Jonathan Kibbler, Shaun A

MARKETS

Prices supplied by Google Finance as of 4:00am ET - stock prices as of close. Here is what the prices mean.

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Trying to explain financial markets to my parents has always felt like teaching cats to swim.

Trying to explain financial markets to my parents has always felt like teaching cats to swim. They nod, but their eyes drift away, and the next minute they’re scrolling Facebook again. But I want them to get it, at least the basics. Not so they can start trading right away, but so they know what I’m talking about when Forex comes up in conversation.

My mission is to cut the nonsense. Make “Forex” great again. No but serious make Forex sound less like Wall Street code and more like something you’d chat about at the dinner table. If my parents can follow along, anyone can.

Forex stands for “foreign exchange.” But honestly, I just call it the world’s giant money swap meet. Every country has its own money. Dollars, euros, yen, and so on. Forex is the place where these currencies get swapped.

Picture a giant store where countries, banks, businesses, even travelers show up to trade their money for someone else’s. The prices of those trades change all day, every day.

Why does this matter? Try traveling. Or buying something from another country. You’ll need their money, not just your own. Companies do the same thing but on a much bigger scale.

Let’s bring this home. Imagine you’re flying to Paris. You land and realize dollars won’t cut it. So, you walk up to the booth at the airport and trade your dollars for euros. That’s it. You just did Forex. At a tiny scale, sure, but the idea is the same.

Now, banks and big brands do this daily, except they move millions, not a couple of twenties. The exchange rate (that little board showing how many euros you get per dollar) is always on the move.

It’s not just governments or banks. Everyone from big corporations to regular people (like some folks with a good Wi-Fi connection and a tiny bit of money to risk) gets in on this. Think of it as a crowded swap meet:

Banks: They run big trades.

Businesses: Importers and exporters always swapping money.

Travelers: Vacationers like you, swapping at the kiosk.

Investors: Average folks trying their hand. Sometimes for profit, sometimes to hedge against risks.

Don’t picture a bunch of stuffy bankers in suits. Picture your cousin messing around on his laptop, hoping to pay for his next pizza with the winnings.

Forex has its own slang. It sounds fancy, but it’s just simple ideas dressed up in weird clothes. Let’s strip it back.

Currencies work in pairs. Always. Like peanut butter and jelly. You buy one, you sell the other. The most famous couple? EURUSD, which means the EURO and the US Dollar.

Think of it like grocery shopping. The price on a loaf of bread changes. Sometimes you pay more, sometimes less. Same with currency pairs. If the price of EUR/USD moves up, your dollar buys fewer euros. Moves down, your dollar gets you more euros.

Here’s what it really means:

These prices shift non-stop, thanks to stuff like politics, weather, or big companies moving money around. Yes, it’s random at times. Also, it’s a bit like watching a sports scoreboard.

Parents always get worried here. They hear “trading” and think about poker chips or slot machines. I get it. Is Forex gambling? Sometimes. But not always.

This is the split:

Imagine two kinds of people at a casino:

The guy who throws chips on any number.

The person who studies poker, knows the odds, and doesn’t blow his budget (counting cards).

Forex lets you be the second type, if you want. Most people don’t, but they could. Risk is real. Losses happen. But if you treat it like a business, not a lottery ticket, your odds are better. There are no guarantees.

I explain it like weather. You can check the forecast and carry an umbrella, but you still might get caught in a surprise shower.

Breaking Forex down for my parents meant skipping the buzzwords and just talking like a normal person. It’s a big market where people swap money. Exchange rates move. Banks, businesses, and even Aunt Linda, if she wants to, can join in.

You don’t have to be a numbers geek to understand the basics. Whether you plan to trade or just want to know why your vacation budget changes month to month, knowing how Forex works puts you ahead.

Next time someone drops “Forex” at dinner, maybe your eyes won’t glaze over. Maybe you’ll be the one explaining it, plain and simple.

And that’s the real win.

-Jordon Mellor

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MARKET ANALYSIS

The EURAUD pair has recently come on to my radar from both a currency strength meter and sentiment point of view. Despite the forex pair being in a strong upward trend, there is signs of a potential reversal on the horizon. With sentiment stretched on both sides of the pair and price action forming a slow consolidation, EURAUD could be on the cusp of a reversal.

The Commitment of Traders (CoT) reports highlight an imbalance in the large speculator positioning.

As stated in my post yesterday, EUR net long positions are approaching a previous extreme which was last formed in September of last year. Historically, such extremes can lead to reversals, whether it be from profit taking or a change in the narrative.

On the other hand, AUD large speculators are extreme short, this can often lead to a reversal higher. AUD has been sold off for a while due to the poor growth in China, but this could change.

This means we could begin to see some EUR weakness and AUD strength leading to some EURAUD downside.

Looking at the currency strength meter we can see that the EUR is now the strongest currency out of the G7. EUR sits at +5 on the meter which means the currency is strong or a reversal could form.

When we look at the AUD it sits at +1 currently and in more of a neutral area. If this were to climb to +3 then the AUD would be seen to be getting stronger.

The price of EURAUD has been in a strong upward trend since the beginning of this year until it found resistance at the highs of 1.8500 at the start of April. Recently the price has been crawling to the upside working within a minor channel formed from the lows on the 14th May around 1.7200. If this channel were to break lower, it could signal a reversal in the upward trend.

EURAUD may be nearing a bearish reversal as several key factors align. CoT data shows extreme net-long positioning on the euro and extreme net-short exposure on the Australian dollar, these are conditions that often precede shifts in market direction. The euro is currently the strongest G7 currency, which could signal a near-term peak, while the AUD shows room to strengthen. Technically, the pair has stalled below 1.8500 and is moving within a narrow ascending channel from the May lows; a break below this structure could confirm a trend reversal, especially if macro sentiment toward Australia and China begins to improve.

-Jonathan Kibbler

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