Asia AM Digest: Commodity Currencies Rise Alongside Stocks

Get the Asia AM Digest every day before Tokyo equity markets open – sign up here !

The sentiment-linked Australian, Canadian and New Zealand Dollars traded higher as risk appetite firmed yesterday, tracking S&P 500 futures upward. The benchmark US stock index issued its strongest close on record. All major global indexes save for Spain’s IBEX 35 posted gains. The US Dollar edged broadly lower but remained firmly contained within recent trading ranges.

DailyFX Economic Calendar: Asia Pacific (all times in GMT)

DailyFX Webinar Calendar– 22 October 2017

London FX & CFD Trading: Chart Set-ups (10:00 GMT) with Paul Robinson

Trading Q&A (11:00 GMT) with Christopher Vecchio

Central Bank Weekly (12:30 GMT) with Christopher Vecchio

Event Trading (18:00 GMT) with David Song

IG Client Sentiment Index Chart of the Day: EUR/JPY

CLICK HERE to learn more about the IG Client Sentiment Index

Retail trader data shows 37.6% of traders are net-long EUR/JPY, with the ratio of traders short to long at 1.66 to 1. In fact, traders have remained net-short since Aug 04 when EUR/JPY traded near 129.226; price has moved 2.2% higher since then. The number of traders net-long is 3.1% higher than yesterday and 21.4% lower from last week, while the number of traders net-short is 4.5% lower than yesterday and 28.2% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EUR/JPY 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 EUR/JPY price trend may soon reverse lower despite the fact traders remain net-short.

Five Things Traders are Reading

1. U.S. Dollar Dilemma: Return of Bearish Trend or Strength into Year-End? by James Stanley, Currency Strategist
2. Ethereum Price Rally Stalls Ahead of Key Resistance Targets by Michael Boutros, Currency Strategist
3. AUD/USD Carves Bullish Outside-Day as RBA Strikes Hawkish Tone by David Song, Currency Analyst
4. USD/CAD Tightrope Act at Risk by Paul Robinson, Market Analyst
5. U.S. Dollar Begins Test of Key Resistance Zone as Bulls Remain Bashful by James Stanley, Currency Strategist

To get the Asia AM Digest every day before the Tokyo cash equity open, sign up here

To get the US AM Digest every day before the US cash equity open, sign up here

To get both reports daily, sign up here