0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Mixed
Gold
Bearish
GBP/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
USD/JPY
Mixed
More View more
Real Time News
  • Here is my go-to 'growth-tech' to 'blue chip' ratio (Nasdaq/Dow) overlaid with the $SPX in green. The speculative chase eased today https://t.co/uZQpgtLDEu
  • To all of the Chicago-area traders: stay safe. https://t.co/CElCspMSMv
  • #IMF Board says #Fed asset purchases could be expanded - BBG
  • US Equities update (Monday Close):$DJI +1.31%$SPX +0.28%$NDX -0.49%$RUT +0.99% $VIX -0.68%
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule:Germany 30: 0.56%France 40: 0.55%FTSE 100: 0.49%Wall Street: -0.01%US 500: -0.01%View the performance of all markets via https://fxnews.org/?/charts#indices https://t.co/8KJfoSaNMH
  • Heads Up:🇺🇸 Fed Evans Speech due at 20:00 GMT (15min)https://fxnews.org/?/economic-calendar#2020-08-10
  • US Dollar Price Action Setups: EUR/USD, GBP/USD https://fxnews.org/?/forex/analyst_picks/todays_picks/james_stanley/2020/08/10/US-Dollar-Price-Action-Setups-JS-EUR-USD-GBP-USD-EURUSD-GBPUSD.html https://t.co/jT4cPEJq6K
  • Upcoming UK GDP data could stoke FTSE 100 volatility as the index bleeds lower. Get your #FTSE market update from @PeterHanksFX here:https://t.co/FErGxPFRh4 https://t.co/7lBSRR8lAr
  • Commodities Update: NYM WTI Crude 42.01 (+1.92%), ICE Brent Crude 45.02 (+1.40%), NYM NYH Gasoline 123.30 (+2.10%). [delayed]
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule:Silver: 2.62%Oil - US Crude: -0.09%Gold: -0.48%View the performance of all markets via https://fxnews.org/?/charts#commodities https://t.co/vsc2gKp0bv
Dollar Threatens Reversal Awaiting Stimulus, Nasdaq Leaves FOMO Rally Unclear

Dollar Threatens Reversal Awaiting Stimulus, Nasdaq Leaves FOMO Rally Unclear

2020-08-01 04:11:00
John Kicklighter, Chief Strategist
Share:

Dollar, GBPUSD, AUDUSD, Nasdaq Talking Points:

  • The Nasdaq didn’t give a clear response following the release of most FAANG member’s earnings Thursday night, which leaves the drive on risk trends unclear for next week
  • US stimulus is still up in the air as extraordinary unemployment benefit support expires, but US equities and the Dollar are ready to response Monday whether a solution is offered or not
  • With a Friday rally, the Dollar keeps open the possibility of a correction – if properly supported – with EURUSD, AUDUSD and GBPUSD crosses that I’m watching specifically

An Inconclusive View on Risk Trends Except for Volatility

There was an inordinate number of high profile events and themes competing for our attention this past week; but despite a fair number of surprises, none of these sparks took command of global risk trends. Through the final trading day of this past week, I was looking to the market to cast its die on whether fortune would favor the exceptional FAANG earnings (Facebook, Amazon, Apple and Google specifically) that reported Friday after the close or the reality of the troubled economic outlook. Friday’s price action was inconclusive on conviction. The Nasdaq 100 – a pacesetter in global markets these past years – ended the day with a measured gain founded on the opening gap and large lower wick. That is indecision personified and offers little carry over into next week. So, either FOMO reasserts itself, a new lightning rod takes control or the risk of retreat will grow quickly.

Chart of Nasdaq 100 Index with Nasdaq to VEU Ratio in Purple and Daily ‘Wicks’ (Daily)

Chart of the Nasdaq 100 Index

Chart Created on Tradingview Platform

Though it may seem that momentum-supported risk appetite is the default setting for the markets, there is a troubled backdrop should investors chose to pay closer attention. Speculative value and ultimately market performance is in the eye of the (collective) beholder, and the herd can readily downplay a stuffy consideration like growth outlook in favor of a panicked reach for yield. However, such conditions don’t make for a particular robust backdrop to fend off sanity checks. Essentially a cap on volatility or risk must be held in place because a review of return potential will show there is very little yield to be found. In fact, it is this anemic rate of return that is driving the reckless drive to ‘buy high with hope to sell higher’.

Chart of S&P 500 with G10 10-Year Government Bond Yield Aggregate (Weekly)

Chart of S&P 500 and G10 Bond Yields

Chart Created by John Kicklighter with Data from Bloomberg

Dollar Watches Stimulus and Now Credit Risks

With risk trends lacking for a champion to carry a clear bullish or bearish trend into the new trading week, I will be watching for any external factors to exert any big pushes. While US earnings season is still ongoing, there are few listings that look to reach the heft of an Apple, Caterpillar or Ford for thematic sway. Economic health may not have quarterly growth updates from governments in the hopper, but the subject will not be far from mind. In particular, if the US government manages to pass a stimulus program over the weekend; it could flush the kind of short-term reassurance we have seen so often these past years. This is a consideration for the S&P 500 as well as the US Dollar. EURUSD’s charge following the EU 27 leaders’ approval of its 750 billion euro stimulus package still clearly lacks an ‘answer’ from the US. Could that relief come soon?

USD Forecast
USD Forecast
Recommended by John Kicklighter
Get Your Free USD Forecast
Get My Guide

Chart of DXY Overlaid with US 10-Year Treasury Yield and 20-Day Rate of Change (Daily)

Chart of DXY Dollar Index

Chart Created on Tradingview Platform

Should the Dollar Reverse Course for a Recovery

The Greenback is struggling for traction. While the currency still maintains the role of a safe haven of last resort, it is struggling under most other scenarios. The slide in growth prospects, floundering expectation for stimulus and building sense of uncertainty through concerns like the upcoming election have offered more than enough doubt for bears to keep control. However, a more systemic threat may soon take the reins: reserve status. Extreme duress brought on by the pandemic has amplified the concerns about the Dollar’s fitness for top reserve status. Despite that, the market seemed to keep its composure around USD. Yet, Friday’s headline that credit rating agency Fitch lowered its outlook on the US top sovereign credit rating (AAA) to ‘negative’ reminded that uncertainty is not just a consideration or others.

Twitter Poll: ‘What Is Your Preferred Dollar Recovery Option?’

Dollar Threatens Reversal Awaiting Stimulus, Nasdaq Leaves FOMO Rally Unclear

Poll from Twitter.com, @JohnKicklighter Handle

In general, I like to evaluate potential and probability of sentiment and markets. The prevailing wind supports a further Dollar slide; and in that event, EURUSD is still interesting. The addition of reserve stability may raise interests in Gold and Bitcoin, but liquidity is first and foremost should things go awry. And yet, where my expectation for bearing holds with probability, I like to have options scoped out for alternative outcomes. For a Dollar rally, EURUSD is arguably just as fitting should the recovery be prompted by the announcement of fresh stimulus. It also bears mention that net speculative futures positioning is at a record.

EUR/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 16% 5% 9%
Weekly 12% 1% 5%
What does it mean for price action?
Get My Guide

Chart of EURUSD with Net Speculative Futures Positioning (Daily)

Chart of EURUSD with Net Speculative Futures Positioning

Chart Created on Tradingview Platform

Where EURUSD cleared its heavy, multi-year resistance and thereby separate the alignment of technicals and fundamentals, Cable is still wrestling with its own major resistance. GBPUSD tagged its multi-year trendline resistance and shied back. Though post-Brexit trade negotiations are still an uncertainty and the BOE Super Thursday is key event risk, the roll back of pandemic easing procedures can create a bearish foothold.

GBP/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 16% 15% 15%
Weekly 16% -3% 3%
Are retail FX traders treating 1.32 as a critical level?
Get My Guide

Chart of GBPUSD with 50-Day Moving Average (Daily)

Chart of GBPUSD

Chart Created on Tradingview Platform

Perhaps one of the few pairs to give EURUSD a run for its money (pun intended) for Dollar potential is AUDUSD. The technicals track a remarkably consistence trendline support with the 61.8 percent Fib of the pairs historical range above around 1.72. Fundamentally, this currency has climbed against economic struggle, strain in a key economic relationship with China, a crush in both rates and carry interest as well as a record high in coronavirus cases. Perhaps the RBA will bide more time against fundamentals or perhaps it can finally push the pair over the edge.

AUD/USD MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 13% 7% 9%
Weekly 7% 7% 7%
What does it mean for price action?
Get My Guide

Chart of AUDUSD with 20-Day Moving Average and Net Speculative Futures Positioning (Daily)

Chart of AUDUSD

Chart Created on Tradingview Platform

Building Confidence in Trading
Building Confidence in Trading
Recommended by John Kicklighter
Building Confidence in Trading
Get My Guide

If you want to download my Manic-Crisis calendar, you can find the updated file here.

.

FxNews provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.