News & Analysis at your fingertips.

We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

0

Notifications

Notifications below are based on filters which can be adjusted via Economic and Webinar Calendar pages.

Live Webinar

Live Webinar Events

0

Economic Calendar

Economic Calendar Events

0
Free Trading Guides
Subscribe
Please try again
EUR/USD
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Mixed
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Wall Street
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Gold
Mixed
GBP/USD
Mixed
USD/JPY
Bearish
More View more
Real Time News
  • Forex Update: As of 14:00, these are your best and worst performers based on the London trading schedule: 🇪🇺EUR: 0.31% 🇦🇺AUD: 0.29% 🇨🇦CAD: 0.10% 🇬🇧GBP: 0.06% 🇨🇭CHF: 0.06% 🇯🇵JPY: -0.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/OODkBySEaS
  • Indices Update: As of 14:00, these are your best and worst performers based on the London trading schedule: US 500: 0.66% Wall Street: 0.42% FTSE 100: -0.13% France 40: -0.28% Germany 30: -0.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/0PTPoUF2Jz
  • #Gold has slipped to its lowest level since Tuesday today. After meeting resistance around 1,795 this morning, the precious metal fell back to trade near the 1,770 level. $XAU $GLD https://t.co/tOiSk0n6t5
  • Biden’s proposed tax hike sees investors unload profitable assets. Bitcoin intensifies losses, falls below $50,000. Get your $btc market update from @Daniela here:https://t.co/pkHFvFotbz https://t.co/1R7T4HpfQX
  • With the US data beating expectations, we have all of the major developed world economies reporting April PMIs with a significant improvement in economic activity for the current month. Seems only black swans and regulations can stop the train now... https://t.co/HpOW5ul5YW
  • Commodities Update: As of 14:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.92% Gold: -0.24% Silver: -0.29% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/ck2iRms5Hp
  • Heads Up:💶 ECB President Lagarde Speech due at 14:30 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-04-23
  • $EURUSD is currently trading back above the 1.2060 level today, around its highest point since early March. This is the third time of the week that the pair has tested the 1.2060 level. $EUR $USD https://t.co/HUbjgKOhCR
  • 🇺🇸 New Home Sales MoM (MAR) Actual: 20.7% Expected: 12% Previous: -16.2% https://www.dailyfx.com/economic-calendar#2021-04-23
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Silver are long at 92.38%, while traders in US 500 are at opposite extremes with 66.76%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/3GlR9tqywl
S&P 500 Plunges, DAX Enters Bear Market on Trade War Fears

S&P 500 Plunges, DAX Enters Bear Market on Trade War Fears

Peter Hanks, Strategist

Talking Points:

  • After markets were closed on Wednesday, US equities were battered early Thursday
  • Previously touted trade war progress has since been dismissed and fresh fronts have been opened
  • European indices felt the pressure earlier Thursday as the DAX entered into a bear market

A breakdown in US equity markets followed market participant’s reevaluation of the US-China trade war progress touted by President Trump earlier in the week. The S&P 500 and Dow have now suffered losses in the year-to-date while the Nasdaq remains green.

S&P500, Dow, Nasdaq Price Chart Daily, Year-to-Date (Chart 1)

US Indexes price chart trade war drop

Despite the relatively low historical volume for the month of December, the depth of the recent decline is substantial and could buck the trend. Further, the degree of Thursday’s move is reflected in the CBOE’s VIX or ‘fear index’ which jumped 50% from Tuesday to Thursday’s open despite a strong equity performance to start the week.

S&P 500 Plunges, DAX Enters Bear Market on Trade War Fears

Chart prepared by John Kicklighter

On Monday, President Trump heralded strong progress and a 90-day trade war truce between the two nations and the news sent global indices higher. On Tuesday, geopolitical analysts voiced concerns on the lack of immediately tangible results from the talks.

Markets were closed on Wednesday to honor the passing of former President George H.W. Bush which squashed volume and volatility. The low-volume day halted any significant move in the major indices despite concrete developments in the US-China trade war.

After a day on the sidelines, investors were eager to dump their shares Thursday morning after the arrest of China’s Huawei CFO, also the daughter of Huawei’s CEO. The arrest was made in Canada at the behest of the US Justice Department. Many analysts equate the move to a dangerous new front in the US-China trade war and a substantial increase in tension just days after significant progress was cited. For many, the arrest was the concrete development speculators needed to confirm their suspicions on trade war progress and equities felt the consequences.

FTSE, DAX, S&P 500 Price Chart Daily, Year-to-Date (Chart 3)

S&P500, FTSE, DAX price chart trade war december

For those watching global markets, the risk-off tone was seen well before US markets opened. Many European indices faced their worst performance in years. The German DAX plummeted -3.48% to a two-year low and entered bear market territory. Similarly, the FTSE 100 shed -3.15%. For both the indexes, the drop is the worst since Brexit.

S&P 500 Price Chart Daily, Year-to-Date (Chart 4)

S&P 500 price chart december decline

As for the S&P 500, the next few days will be a critical test for the index from a technical perspective. The price trades near trend-line support from February 2016 and a weaker line of support from February of this year. Similarly, the 50-day moving average (DMA) crossed the 200DMA to signal a “death-cross” a technical signal many traders view as a strong bearish development.

Read about the history of major financial crashes and bubbles with “A Brief History of Major Financial Bubbles, Crises, and Flash-crashes.”

If the support lines are broken, it would be reasonable to expect further and deeper declines as the bottom becomes uncertain. On Friday, economic data to reverse the risk-off mood is sparse. With the exception of US unemployment, equity markets may have to wait for next week or a fundamental change in the trade war to regain their footing.

--Written by Peter Hanks, Junior Analyst for DailyFX.com

Contact and follow Peter on Twitter @PeterHanksFX

Read more:Oil Prices Drop on Potential OPEC Disappointment, CAD Extends Losses - US Market Open

DailyFX forecasts on a variety of currencies such as the US Dollar or the Euro are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES