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.

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
Bullish
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
Bullish
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
Gold
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
GBP/USD
Bullish
USD/JPY
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
More View more
Real Time News
  • Commodities Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Silver: 0.56% Gold: -0.04% Oil - US Crude: -0.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/esKy1uY3rQ
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.06%, while traders in US 500 are at opposite extremes with 71.69%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/HVIXApa0wb
  • The continuity seen across these volatility cycles is a good thing. Historical precedence offer a blueprint for identifying conditions supportive for a vol-event to occur, and how they may unfold. Deepen your knowledge of historical volatility here:https://t.co/vg7w10la3j https://t.co/Mit4oKK16l
  • Indices Update: As of 20:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.63% France 40: 0.62% FTSE 100: 0.55% US 500: 0.00% Wall Street: -0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/bW5YIX8sRH
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Silver: 0.56% Gold: -0.04% Oil - US Crude: -0.76% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/dDwLgcqJsI
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.06%, while traders in US 500 are at opposite extremes with 71.48%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/O6NcsvAJNS
  • The #Euro may be coiling up for a breakout against the US Dollar as the third quarter of 2020 gets underway. What will drive price action? See our trading guide from @IlyaSpivak to find out here: https://t.co/irBdf8mE7H https://t.co/h5bJePYxGg
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.47% France 40: 0.44% Germany 30: 0.38% US 500: -0.16% Wall Street: -0.27% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/4oDLGEMu1T
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.06%, while traders in US 500 are at opposite extremes with 71.21%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/m74wuZZKeH
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Silver: 0.42% Gold: -0.03% Oil - US Crude: -0.83% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4cYiwWIL4E
US Dollar Tanks, S&P 500 Stabilizes as FOMC Counters Coronavirus

US Dollar Tanks, S&P 500 Stabilizes as FOMC Counters Coronavirus

2020-03-27 19:30:00
James Stanley, Strategist
Share:

S&P 500, US Dollar Talking Points

  • It’s been a month of extremes in global markets as a shocking and historically aggressive equity sell-off finally found some semblance of support this week.
  • The US Dollar put in a strong rally as risk aversion was heating up in the middle of March, gaining as much as 8.8% over a ten-day-period.
  • With the S&P 500 digging into support and the US Dollar tempering gains, both reactions to recent FOMC actions – the big question now is whether the worst is over or whether there’s more selling yet to come.

S&P 500 Finds Support After Limit-Down Sunday Open

We’re nearing the close of what’s been another eventful week across global markets. The big question at this point is whether a low has been set in US equities as a trove of various stimulus measures from the Federal Reserve may have finally helped to bring some support into play.

Weekend risk remains a daunting prospect, however, as the past couple of weeks have seen US equity futures go ‘limit down’ after the Sunday open – even with big announcements from the Federal Reserve designed to do the exact opposite. But, grading the performance of the US Dollar combined with a bright patch of performance in US equities after what had become a brutal backdrop – hope remains that risk aversion may finally be taking a rest.

In the S&P 500, the big item this week was price action moving into a technical ‘bull market,’ denoted by a bounce of 20% or more which showed from the Monday low up to the Thursday high. This comes just a couple of weeks after the S&P 500 had moved into ‘bear market’ territory, designated as a sell-off of 20% or more. With the paring of those gains on Friday, the ‘bull market’ argument doesn’t really hold at this point but did for a brief observation after the Thursday close.

S&P 500 Daily Price Chart

SPX500 Daily Price Chart

Chart prepared by James Stanley; SPX500 on Tradingview

Making matters a bit more complex – the 20% rally that showed Monday thru Thursday cut the total loss on the S&P 500 (from the February high) to 22.5%. That number had grown to 35.9% after last Sunday’s open so – even though US equities temporarily moved into that ‘bull market’ status – the argument can be made that a bigger bear market persists and this week’s bounce was but a pullback or retracement in a bigger-picture theme.

Building Confidence in Trading
Building Confidence in Trading
Recommended by James Stanley
Building Confidence in Trading
Get My Guide

Arguments on Both Sides of the Risk Trade

We’re still seeing history take place in front of us. Never has the world seen so much economic accommodation ushered in so quickly. During the Financial Collapse in 2008, it took months and months to accomplish what took a few weeks here, with both the Fed and Congress opening up stimulus measures designed to offset the economic slowdown emanating from the spread of the novel coronavirus, which is another item of history that’s taking place before us.

There’s not really a template for how a society should or can most adequately handle a pandemic scenario. Sure, the ‘Spanish Flu’ presents some evidence but this was more than 100 years ago and the world, and financial markets, were in a much different spot at the time. Most evidence suggests there hasn’t yet been a peak in cases and, until there is, it’s difficult to project just how long or how aggressively this slowdown might cut into the American and, in turn, the global economy.

So, there’s rationale for why US equities sold-off so aggressively in such a short period of time, marking another historical item in just how quickly that sell-off showed up. As looked at earlier this week, a big zone of longer-term support came into play in the S&P 500 and, has since helped to hold the lows.

S&P 500 Monthly Price Chart

SPX500 ES SPY Monthly Price Chart

Chart prepared by James Stanley; SPX500 on Tradingview

US Dollar Snaps Back

This extreme uncertainty had led to a massive move of strength in the US Dollar, with the currency jumping by as much as 8.8% in a ten-day-span in the middle of March. And given the extreme volatility that had shown in Treasuries, it made sense as to why there was so much risk aversion showing as global flows drove into cash. Treasury markets have since calmed, and the US Dollar has softened in response, giving back more than 50% of that prior bullish move.

Starts in:
Live now:
Jul 07
( 17:07 GMT )
James Stanley's Tuesday Webinar
Trading Price Action
Register for webinar
Join now
Webinar has ended

US Dollar Four-Hour Price Chart

US Dollar Four-Hour Price Chart

Chart prepared by James Stanley; USD on Tradingview

With now just two trading days left in the month, the monthly price bar on the US Dollar is showing as a long-legged doji, a sign of extreme indecision. Notably, resistance played-in just ahead of the 103.00 level on DXY last week, the same zone that turned around a bullish advance in December 2016 and January of 2017. A break-above the 103.82 level, should bulls continue to push, would constitute a fresh 17-year-high in the currency.

US Dollar Monthly Price Chart

US Dollar Monthly Price Chart

Chart prepared by James Stanley; USD on Tradingview

--- Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

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

DISCLOSURES

News & Analysis at your fingertips.