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Ahead of the US cash equity open, the US Dollar is trading slightly higher as both the British Pound and the Euro have softened on the day. The British Pound seems to be the center of attention, with EUR/GBP moving lower and GBP/USD moving higher. Concerns around UK Prime Minister Theresa May’s staying power have flared up in recent days, augmenting what has been a decidedly negative turn in news flow surrounding Brexit. The ECB meeting minutes released today showed that policymakers were expressing concern over Euro strength and how another leg of tapering might impact financial markets.
DailyFX Economic Calendar: Thursday, October 5, 2017 - North American Data Releases
While the North American economic calendar is stacked with US data throughout the morning, none of the reports carry a ‘high’ importance rating. Moreover, with the September US Nonfarm Payrolls report due out tomorrow morning, traders tend to stay away from staking out significant positions before the usual burst of activity. The four Fed speakers today carry more weight than any of the economic data.
DailyFX Webinar Calendar: Thursday, October 5, 2017
IG Client Sentiment Index Chart of the Day: GBPUSD
Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page
GBPUSD: Retail trader data shows 48.6% of traders are net-long with the ratio of traders short to long at 1.06 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29512; price has moved 1.5% higher since then. The number of traders net-long is 9.0% higher than yesterday and 39.3% higher from last week, while the number of traders net-short is 1.5% higher than yesterday and 18.1% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
Five Things Traders are Reading
- “ECB Discussed How Best to Reduce Its QE Program, Euro Eases Gently” by Martin Essex, MSTA, Analyst and Editor
- “DXY Index Posture Remains Bullish Ahead of US NFPs Tomorrow” by Christopher Vecchio, CFA, Senior Currency Strategist
- “Little Risk To Euro From Catalonia Dispute, Spanish Assets To Stay Weak” by Martin Essex, MSTA, Analyst and Editor
- “EUR/USD Technical Analysis: Euro Down Trend Remains Intact” by Ilya Spivak, Senior Currency Strategist
- “DAX – Even in Record Territory Resistance Can be Found” by Paul Robinson, Market Analyst
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