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Market Sentiment Diving on China Virus Worries | Webinar

Market Sentiment Diving on China Virus Worries | Webinar

2020-01-28 13:00:00
Martin Essex, MSTA, Analyst and Editor
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Market sentiment analysis:

  • Trader confidence has been damaged by the spread of the deadly coronavirus and the markets show few signs yet of rallying after Monday’s slump.
  • Safe havens, particularly US Treasuries, are benefiting while the Australian Dollar and other “risk on” currencies are falling hard.

Trader confidence suffers viral damage

Traders are continuing to favor safe havens such as US Treasuries and sell “risk on” currencies such as the Australian Dollar, the Canadian Dollar and the New Zealand Dollar as concern grows that the spread of the coronavirus could damage the Chinese, and potentially the global, economy.

As the chart below shows, the Aussie – which is seen as a proxy for China – has been hit particularly hard and while there has been an anemic bounce in some risk-off assets such as stocks it could be short-lived.

Australian Dollar Price Chart, One-Hour Timeframe (January 16 - 28, 2020)

Latest AUD/USD price chart.

Chart by IG (You can click on it for a larger image)

AUD/USD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily -7% -13% -8%
Weekly 9% -19% 1%
What does it mean for price action?
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Elsewhere, commodities such as crude oil, copper and iron ore are falling in price on worries about a potential economic slowdown that could be caused by the virus.

In this webinar, I looked at the trends in the major currency, commodity and stock markets, at the forward-looking data on the economic calendar this week, at the IG Client Sentiment page on the DailyFX website, and at the IG Client Sentiment reports that accompany it. You might also like to check out the DailyFX Trading Global Markets Decoded podcasts.

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
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--- Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below

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

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