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.

Free Trading Guides
EUR/USD
Bullish
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
Gold
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
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
Bitcoin
Mixed
More View more
Real Time News
  • As Trump delivers a press conference on the #coronavirus, the #SP500 has broken under rising support from 2018 as the outlook risks turning further bearish, btw as anticipated from downside signals discussed in yesterday's session on trader psychology - https://t.co/RzZU7h5nQM https://t.co/tSQX1rxxNF
  • US President Donald Trump on Coronavirus: - Says he will back congress providing more funds for the virus (BBG)
  • US President Donald Trump speaks at White House on #Coronavirus: - Has just received briefing on #COVID19 - Risk to Americans from the virus is very low - Ready to adapt and do whatever is needed as the disease spreads (BBG)
  • The $NZD may bounce after hitting a four-month low against its US counterpart, but overall positioning continues to argue for a bearish bias. Get your NZD market update from @IlyaSpivak here:https://t.co/pip5LuUUJW https://t.co/lCOtFkrtBK
  • Furthermore, the #Euro 5Y5Y inflation swap forward is less than one third of a percent above its all-time low at 1.1688. Eurozone inflation expectations to start were not looking great, and the #coronavirus only made them gloomier. https://t.co/vvQYUuXQja https://t.co/fmpnmj4j0v
  • $USDJPY Daily Pivot Points: S3: 108.36 S2: 109.34 S1: 109.77 R1: 110.76 R2: 111.31 R3: 112.29 https://www.dailyfx.com/pivot-points?ref=SubNav?utm_source=Twitter&utm_medium=DFXGeneric&utm_campaign=twr
  • Japan ruling parties to consider budget increase over virus - Nikkei $USDJPY
  • $AUDUSD suffered a critical break beneath support at 0.6678 last week as risk aversion spiked on #coronavirus fears. Get your #AUDUSD market update from @PeterHanksFX here:https://t.co/zWvJh9VhKq https://t.co/xzCcZ5GXuJ
  • RT @spectatorindex: JUST IN: Kuwait sends plane to evacuate its nationals from Milan, Italy
  • Canada reports confirmed coronavirus cases now at 12 $USDCAD
Opening Comment 07.26

Opening Comment 07.26

2010-07-26 08:47:00
Joel Kruger, Technical Strategist
Share:

The general consensus and feedback in the two weeks leading up to the stress test results was quite positive, so it wasn’t much of a surprise to see the results come out on the upbeat side.  

 

However, the major concern heading into the tests and now after the tests is that the tests were way too lax and have helped very little, if at all, to instill a higher degree of confidence in the European banking system. The tier 1 capital ratio requirement of 6% seems to be quite low, and this compares to a Swiss tier 1 capital ratio of 8% in their latest banking tests. It is quite clear from the results that there were a good number of banks that would have failed the European stress tests had the tier 1 ratio been just a little higher, andthis clearly casts a major shadow of doubt on the effectiveness and validity of these tests.  

 

Many investors will argue that when the US stress tests were released last year, they were also somewhat lax and suspect, and yet the markets managed to recover quite impressively still. As such, even some form of clarity in the European banking system should help to bolster investor appetite. We are not as convinced of this logic, as the positive market reaction following the US stress tests could just as easily have been attributed to policy assurances from authorities in the US that no bank would fail.  

 

In our opinion, the Euro should be exposed to some weakness, at least over the next few days, with all of the positives having already been priced in and plenty of question marks surrounding the drive behind the latest surge in the single currency. Over the medium-term, as the stress tests fade out of the headlines, it will become much more difficult to determine longer-term direction. The US is also clearly riddled with some deep structural issues that have crept back in over the past several weeks, and given that the yield differential between the Euro and USD is more or less a wash, the currency which benefits the most will be the currency which can show the greater likelihood for a quicker sustained recovery.  

 

Looking ahead there is no data scheduled for release in the European session, and this should be a welcome development with the markets having plenty to deal with in terms of deciding on the proper way to react to the latest stress test results.  

 

 

 

 

 

 

 

 

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

DISCLOSURES

News & Analysis at your fingertips.