Trading sentiment analysis:
- Trader confidence has been lifted by the prospect of concerted central bank action to counter the economic impact of the coronavirus.
- However, it remains unclear whether this will be enough to sustain the recent bounce or whether the previous plunge will resume.
Trader confidence brittle
Market sentiment is finely balanced as traders weigh up whether central bankers and finance ministers will do enough to offset fears about the economic impact of the spread of Covid-19, extending the recent market rally, or will take insufficient action to prevent an extension of the previous plunge.
While traders may welcome the recent increase in volatility, deciding whether the panic seen so far – principally in the stock markets – is over is a hard call to make.
Dow Jones Industrial Average Price Chart, Four-Hour Timeframe (February 20 – March 3, 2020)
Chart by IG (You can click on it for a larger image)
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.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me via the comments section below
