DailyFX US AM Digest: US Dollar Back on the Schneid
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Despite recovering most of its losses late in yesterday’s session, the US Dollar finds itself trading lower once again on Thursday, even as rates markets settle down after echoes of the ‘taper tantrum’ rang through markets on Wednesday. The Euro is back near 1.2000 versus the US Dollar after the account of the ECB’s December policy meeting showed a willingness to change the pace of the QE taper if economic data warranted it (implicitly a hawkish connotation). With global equity markets turning back higher, the Japanese Yen’s hot streak has been put to a sudden halt.
DailyFX Economic Calendar: Thursday, January 11, 2018 – North American Releases
Another day featuring many data releases but none of which rise to the level of “high” importance per the DailyFX Economic Calendar. The US data released this morning hasn’t been favorable to the US Dollar, with the December US Producer Price Index showing deflation on the monthly readings and disinflation on the yearly readings. Elsewhere, the weekly US Initial Jobless Claims figure for the period ending January 6 was a touch worse than anticipated at 261K versus 245K expected. Later today, the Fed’s Dudley will be offering up his assessment on the US economy; as head of the New York Fed and Fed Vice-Chairman, he is considered one of the more important policymakers on the FOMC.
DailyFX Webinar Calendar: Thursday, January 11, 2018
IG Client Sentiment Index Chart of the Day: AUDUSD
Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page
AUDUSD: Retail trader data shows 32.7% of traders are net-long with the ratio of traders short to long at 2.06 to 1. In fact, traders have remained net-short since Dec 19 when AUDUSD traded near 0.76649; price has moved 2.4% higher since then. The number of traders net-long is 0.4% lower than yesterday and 7.7% lower from last week, while the number of traders net-short is 1.4% higher than yesterday and 9.1% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests AUDUSD 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 AUDUSD-bullish contrarian trading bias.
Five Things Traders are Reading
- “Cryptocurrency Charts: Bitcoin & Litecoin on a Similar Course” by Paul Robinson, Market Analyst
- “USD Steadies, US Treasury Yields Fall as China Denies Policy Change” by Martin Essex, Analyst and Editor
- “Bitcoin, Ethereum Prices Hit After South Korean Exchange Raids” by Nick Cawley, Analyst
- “NZD/USD Technical Analysis: False Breakout Below 0.73 Figure?” by Ilya Spivak, Senior Currency Strategist
- “China Sinks the Dollar, Trump Hits CAD and BoJ the S&P 500” by John Kicklighter, Chief Currency Strategist
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