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  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.86% 🇨🇦CAD: 0.66% 🇬🇧GBP: 0.41% 🇪🇺EUR: 0.33% 🇯🇵JPY: 0.30% 🇦🇺AUD: 0.28% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/aedAWqGkhx
  • In the aftermath of the FOMC's taper talk, the US 2Q GDP miss has added to the Dollar's tumble but not weighed the S&P 500. DailyFX's @JohnKicklighter 👇 https://t.co/639Y34LoWI
  • In the aftermath of the FOMC's taper talk, the US 2Q GDP miss has added to the Dollar's tumble but not weighed the S&P 500. DailyFX's @JohnKicklighter discusses Down pointing backhand index👇 https://t.co/hJbVcsxyER
  • Indices Update: As of 16:00, these are your best and worst performers based on the London trading schedule: US 500: 0.54% Wall Street: 0.52% Germany 30: -0.05% FTSE 100: -0.08% France 40: -0.18% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/KovwTZk8iu
  • $GBPUSD not far off the big 1.4000 psych level that has been in focus for much of the year https://t.co/ieYPFxCX3l
  • $USDCAD has dropped below its 20-day moving average for the first time in 38 trading days. As far as monetary policy focused crosses go, this is a good one; and the BOC has already tapered twice as the Fed drags its feet https://t.co/18gBHWKzJ8
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.76% 🇬🇧GBP: 0.51% 🇨🇦CAD: 0.44% 🇪🇺EUR: 0.33% 🇦🇺AUD: 0.23% 🇯🇵JPY: 0.20% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/6IgbcOeZDZ
  • Seeing some continued US Dollar weakness post-FOMC as expected. $DXY hitting fresh monthly lows with weekly jobless claims data and the 2Q GDP report released this morning both disappointing relative to consensus. Link to Analysis - https://www.dailyfx.com/forex/market_alert/2021/07/29/us-dollar-hits-monthly-low-as-jobless-claims-q2-gdp-disappoint.html https://t.co/MnaABIzbRr
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.88% US 500: 0.52% France 40: 0.50% Wall Street: 0.49% Germany 30: 0.36% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/7PWjwTJE5Y
  • The US 2Q GDP was technically better than the previous quarter at 6.5% (prev 6.3% revised down), but far more tame than the 8.4% forecasted. The $DXY Dollar Index is responding to the data with its fourth consecutive slide https://t.co/GsLyQwGaLC
FOREX: S&P500 Under Assault Ahead of NFPs - Trade or Fade?

FOREX: S&P500 Under Assault Ahead of NFPs - Trade or Fade?

Research, Research Team

The S&P500 is down more than 5.2% since the start of 2014 with 1.7% of those losses sustained just this week/month. Is it time to trade or fade this correction in stocks? A compelling case be made on both sides.

SP500_Under_Assault_Ahead_of_NFP_Trade_or_Fade_body_SP500NFPProjection.png, FOREX: S&P500 Under Assault Ahead of NFPs - Trade or Fade?

If the FOMC remains committed to its lax accommodative approach, it’s likely that this downturn could prompt the central bank to Taper the Taper or refrain from cutting back QE in the March meeting- effectively serving as a backstop on equity prices. Add to that the fact that corporate earning haven't been all that bad and firms continue to sit with hordes of cash on the sidelines: future cash-flow into stocks.

On the other hand, rising concerns over the threat of a slowdown in China and the EM story has continued to cub appetite for risk and as US data softens, so do growth expectations from the world's largest economy. Looking at price, the S&P is resting on a trendline that extends to the June 2013 low which currently coincides with the November low at 1740. Momentum does not seem to favor a bounce here despite's today's rally and with NFPs just days away, it's difficult to envision strong inflows into risk.

The NFP game plan is as follows: if the index recovers back above the 100-day moving average at 1776 we'll look for stronger resistance at the monthly pivot at 1800. Targets in the event of a break of trendline support are at 1716, 1685 and 1650. If NFPs are weaker than expected, look for growth concerns to keep pressure on broader risk assets and continued weakness in stocks.

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