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The US Dollar is on pace to close the week out at a three year low (per the DXY Index) as the specter of a US federal government shutdown looms at the end of the day today. This particular government shutdown would be a unique phenomenon, insofar as a government shutdown hasn’t occurred when one singular party has been in control of the White House, the Senate, and the House of Representatives since the Jimmy Carter administration in September 1979 (a period of abject policy failure all-around – fiscal, monetary, foreign, etc.). Accordingly, the push higher by US Treasury yields – the 10-year yield is at its highest level since September 2014 – isn’t of the variety that would benefit the US Dollar (improving growth and inflation expectations); rather, the rise in long-end yields may be reflecting growing political risks in the US.
DailyFX Economic Calendar: Friday, January 19, 2018 – North American Releases
It’s a quiet Friday to close out the North American economic calendar for the week, with only one ‘high’ rated event. Even then, it’s debatable that the preliminary January US U. of Michigan Sentiment report deserves such a level of importance, given the fact that confidence readings have been holding near multi-decade highs for over a year now, resulting in the data leaving little discernible impact on FX markets. With the US federal government shutdown rapidly approaching at midnight tonight, all eyes should be on the news wire for real-time updates out of Washington, D.C.
DailyFX Webinar Calendar: Monday, January 22, 2018
IG Client Sentiment Index Chart of the Day: Spot Gold
Learn more about the IG Client Sentiment Index on the DailyFX Sentiment page
Spot Gold: Retail trader data shows 63.9% of traders are net-long with the ratio of traders long to short at 1.77 to 1. The number of traders net-long is 3.6% higher than yesterday and 2.5% lower from last week, while the number of traders net-short is 1.5% higher than yesterday and 3.3% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Spot Gold prices may continue to fall. Positioning is more net-long than yesterday but less net-long from last week. The combination of current sentiment and recent changes gives us a further mixed Spot Gold trading bias.
Five Things Traders are Reading
- “USD Bearish Momentum Continues as Government Shutdown Nears” by Christopher Vecchio, CFA, Senior Currency Strategist
- “GBPUSD Shrugs Off Poor UK Retail Sales, Brexit Optimism Dominates” by Martin Essex, MSTA, Analyst and Editor
- “Strong U. of Michigan Confidence Survey to Fuel Bearish EUR/USD Series” by David Song, Currency Analyst
- “S&P 500 Technical Analysis: Wobbling, but Still Strong” by Paul Robinson, Market Analyst
- “EUR/JPY Technical Analysis: Trend-Line Bounce into Resistance Zone” by James Stanley, Currency Strategist
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