US AM Digest: US Dollar Edges Back Higher as US Equity Markets Open

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After spending most of the day lower, the US Dollar has traded back to the topside, with the majority of the DXY Index’s earlier losses driven by a weaker USD/JPY (although price has rebounded near the start of the US cash equity session). A series of weak data releases over the course of the week has left traders doubting optimism over the state of US economic growth, following weak wage figures on Tuesday, retail sales on Wednesday, and housing data earlier this morning. Better than expected February US Industrial Production and Manufacturing Production figures have provided an opportunity for the US Dollar to rebound somewhat, with the DXY Index swinging to positive just a few minutes ago. Elsewhere, amid a rather absent calendar this week, the British Pound and the Euro have gyrated in recent days but have barely moved overall since markets opened Sunday in New York.

DailyFX Economic Calendar: Friday, March 16, 2018 – North American Releases

With the majority of data behind us for Friday, the remaining data on the North American economic calendar is due strictly out of the United States. At 10 EDT/14 GMT, the preliminary March US U. of Michigan Sentiment reading is due out, where it is expected that the confidence gauge will hold near multi-year highs. But the main source of risk for FX markets is once again the news wire, with rumors of more turnover in White House personnel plus ongoing concerns about the NAFTA negotiations remain in the spotlight.

DailyFX Webinar Calendar: Monday, March 19, 2018

IG Client Sentiment Index Chart of the Day: Spot Gold

Spot Gold: Retail trader data shows 73.7% of traders are net-long with the ratio of traders long to short at 2.8 to 1. The number of traders net-long is 8.7% higher than yesterday and 12.3% higher from last week, while the number of traders net-short is 1.6% lower than yesterday and 11.2% lower 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. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Spot Gold-bearish contrarian trading bias.

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

Five Things Traders are Reading

1. “Central Bank Weekly: Looking Ahead to Next Week’s FOMC Meeting” by Christopher Vecchio, CFA, Senior Currency Strategist
2. “Charts for Next Week – EUR/USD, Yen, Gold/Silver & More” by Paul Robinson, Market Analyst
3. “Sterling (GBP) Faces a Pivotal Week Ahead, BoE and Brexit Collide” by Nick Cawley, Analyst
4. “Dismal U. of Michigan Confidence Survey to Curb U.S. Dollar Strength” by David Song, Currency Analyst
5. “S&P 500 Technical Perspective: Market in Limbo, Watch the Dow Jones” by Paul Robinson, Market Analyst

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