DailyFX US AM Digest: US Dollar Tries to Scrap Back Some Losses

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The US Dollar is rallying back a bit after Friday’s payrolls disappointment, with no clear catalyst coming from at home. Abroad, the British Pound has been weighed by news of UK Prime Minister Theresa May reshuffling the mid-level of her cabinet, while the Euro has been offered as Germany enters another week without a government. Meanwhile, with global risk appetite remaining firm heading into the first full trading week of 2018, the Japanese Yen continues to trade lower. The news wire is poised to be the key source of event risk for Monday.

DailyFX Economic Calendar: Monday, January 8, 2018 – North American Releases

The North American economic calendar is quiet this week, with only two ‘high’ importance events in total, both due out on Friday. At the start of the week, three speeches by various Federal Reserve policymakers are due that should generate headlines and provoke price action development in the US Dollar. Notably, both the Fed’s Williams and Rosengren will be speaking about inflation targeting, a key issue as the FOMC contemplates three rate hikes in 2018.

DailyFX Webinar Calendar: Monday, January 8, 2018

IG Client Sentiment Index Chart of the Day: EURUSD

Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page

EURUSD: Retail trader data shows 28.0% of traders are net-long with the ratio of traders short to long at 2.57 to 1. The number of traders net-long is 18.8% higher than yesterday and 55.4% higher from last week, while the number of traders net-short is 5.0% higher than yesterday and 14.3% higher from last week.

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

Five Things Traders are Reading

1. “FX Markets Tracking Global Equities, US Dollar Awaits CPI & Retail Sales” by Christopher Vecchio, CFA, Senior Currency Strategist
2. “Silver Technical Outlook: Resistance Threatens Rally” by Paul Robinson, Market Analyst
3. “CoT: Euro Speculators Record Long, Curious Position Changes in AUD/USD” by Paul Robinson, Market Analyst
4. “Cryptocurrency Prices Spike on South Korean Exchange” by Nick Cawley, Analyst
5. “Euro’s Strong Fundamentals Drive Long Positioning Build Up at Start of 2018” by Christopher Vecchio, CFA, Senior Currency Strategist

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