DailyFX US AM Digest: US Dollar Higher on Tax News, Pound Continues Bull Run
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The US Dollar has started the week higher after a gap open Sunday following news that the US Senate passed its version of a tax bill that could eventually be written into law by President Trump. While the House and the Senate need to reconcile the differences between their bills, signs are beginning to point to the legislation being wrapped up by December 14, when Congress goes on break for the Winter Holiday session. Elsewhere, the British Pound’s bull run has continued as headlines emerged that further progress was being made on issues surrounding Ireland and access to the trade union post-Brexit.
DailyFX Economic Calendar: Monday, December 4, 2017 – North American Releases
There are no Canadian data on the economic calendar for Monday, and the US economic data shouldn’t be that market moving upon their releases. October US Factory Orders are the most meaningful piece of information set to be released, while the October US Durable Goods Orders report is the final version of an already-released data series.
DailyFX Webinar Calendar: Monday, December 4, 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 37.1% of traders are net-long with the ratio of traders short to long at 1.7 to 1. In fact, traders have remained net-short since Nov 21 when GBPUSD traded near 1.32465; price has moved 2.1% higher since then. The number of traders net-long is 7.5% higher than yesterday and 22.3% lower from last week, while the number of traders net-short is 14.2% higher than yesterday and 8.5% higher 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. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger GBPUSD-bullish contrarian trading bias.
Five Things Traders are Reading
- “FX Markets Turn to RBA, BOC, and US NFP in First Full Week of December” by Christopher Vecchio, CFA, Senior Currency Strategist
- “COT: Large Speculators Long Pound Again; Gold, Silver Diverge” by Paul Robinson, Market Analyst
- “USD/CAD Options Prices Rising Ahead of BoC, More Selling Anticipated” by Paul Robinson, Market Analyst
- “GBP Needs an Answer to the Brexit Timetable Question” by Nick Cawley, Analyst
- “Euro Fundamentals Remain Strong, but Heavy Positioning a Clear Burden” by Christopher Vecchio, CFA, Senior Currency Strategist
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