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.

Free Trading Guides
EUR/USD
Bearish
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
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
GBP/USD
Mixed
USD/JPY
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
More View more
Real Time News
  • Why must financial market traders monitor both monetary and fiscal policy? Find out from @MartinSEssex here: https://t.co/Fkzk88Y5gm https://t.co/AldbSctm9V
  • Do you know how to properly Identify a double top formation? Double tops can enhance technical analysis when trading both forex or stocks, making the pattern highly versatile in nature. Learn more about the double top formation here: https://t.co/yF133btXFd https://t.co/Sjnr0iVgAf
  • Upside momentum stalls with the #DAX and #FTSE 100 vulnerable to testing lower levels as the economic backdrop deteriorates further. Get your #equities technical analysis from @JMcQueenFX here: https://t.co/BFIaXTfDcs https://t.co/q0Mso4zWlT
  • RT @iv_technicals: *TRUMP SAYS HE'D USE TARIFFS IF NEEDED TO PROTECT OIL INDUSTRY - BBG #OOTT #WTI $USO
  • After the pattern is composed with the closing of the signal candle, then you can look to the following candle to identify a clear bias and risk points. Learn how to apply this knowledge to a trading strategy here: https://t.co/uh3NwgHBVv https://t.co/yl4KUMNmUh
  • Asia’s vast and growing importance to the world economy is not yet matched by the presence of a currency trading center to rival the established order. Get your update on market drivers in Asia here: https://t.co/r3Ku0p9dw1 https://t.co/CU5vMilpLH
  • - Gold prices may suffer if FOMC minutes spark risk aversion, concerns about liquidity - #XAUUSD could face additional selling pressure if employment data sours sentiment - Ballooning credit risks from distressed corporate debt markets may cap gold’s gains https://www.dailyfx.com/forex/fundamental/forecast/weekly/chf/2020/04/04/Gold-Prices-May-Fall-on-FOMC-Minutes-Recession-Credit-Risks.html
  • The bear flag pattern is a popular price pattern used by technical traders within the financial markets to determine trend continuations. Learn how to spot a bear flag pattern here: https://t.co/zg8QzS3ytS https://t.co/A8fvEmmh0K
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/VsfbITIb6B https://t.co/qSLzCiGVxa
  • S&P 500 Sinks as Unemployment Spikes; VIX Index Drops? -via @DailyFX “#StockMarket recovery stymied by dismal jobs report. #Volatility down, but extreme fear lingers.” Latest Forecast: https://www.dailyfx.com/forex/market_alert/2020/04/04/spx-sp500-sinks-as-unemployment-spikes-vix-index-price-drops.html $SPY $SPX $ES_F #Stocks #Analysis #Trading https://t.co/qwfhehTnbt
GBP/USD Event Risk Fails Clear Break, S&P 500 Grows More Extreme

GBP/USD Event Risk Fails Clear Break, S&P 500 Grows More Extreme

2017-01-25 05:02:00
John Kicklighter, Chief Strategist
Share:

Talking Points:

  • Despite event risk on crucial themes for both sides of the pair (Brexit, US trade policy), GBP/USD failed to break
  • The short-term impact from Australian 4Q CPI proves more productive for AUD/USD and other Aussie crosses
  • An already-extreme complacency in 'risk appetite' is redlining again with SPX hitting a record and VIX at 2.5 year lows

Sign up for the live UK or US 4Q GDP coverage and see what other live coverage is scheduled to cover key event risk for the FX and capital markets on the DailyFX Webinar Calendar.

Opportunity was high for the Cable this past session with a convergence of UK and US event risk that could move the deep fundamental tides behind their respective currencies. The UK Constitutional Court's ruling on Parliament's say on Brexit could alter the expectations of a near 3,000 pip depreciation of the Sterling. As for the US budget forecast from the Congressional Budget Office (CBO), the new President's extraordinary policy proposals - which drove the Dollar and S&P 500 to rally after the election - could have been put against realistic measure. Neither event offered a decisive shift in views that could supply GBP/USD with the critical break that could have been.

For the CBO, a lack of detail on the incoming President's policies meant their influence was left out of the forecasts. Though the UK Court announced Parliament had a say in the UK's exit from the EU, the Sterling didn't respond to that the same kind of speculative retracement fervor that we had seen in the past with data-motivated QE increases and risk trends. More market moving was the Australian 4Q CPI figures. While its surprise quotient was far from extreme and monetary policy has proven less exceptional a fundamental theme of late; it was a clearer outcome with noteworthy technical progress from the likes of AUD/USD. Perhaps the upcoming New Zealand 4Q CPI update can afford the same for Kiwi crosses.

Shifting from economic-oriented theme and scheduled event risk, the market's most rudimentary motivations are once again flashing a warning signal. Risk trends have been pushed to extreme complacency and exposure. The S&P 500 resolved a narrow wedge with a bullish break to fresh record highs, but follow through was notably lacking. This stretched benchmark for all things designated 'risky' is well established in the speculative rank. Where the real concern should be placed is the market's lack of insurance to this stretched position. The VIX - the cost of hedge to protect against unfavorable moves in the underlying US equity market - moved back to its lowest close since July 2014. The short-term measures of implied volatility in the VXX extended its dive to record lows. Meanwhile, there was still evidence of market's buying cheaper 'disaster' insurance via the SKEW. Sentiment is already way out on a limb, and throwing off the safety lines doesn't improve circumstances. We look at where the markets are moving and where they are most pressurized in today's Trading Video.

To receive John’s analysis directly via email, please SIGN UP HERE

VIX Volatility Index with S&P 500 Overlay (Purple)

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

DISCLOSURES

News & Analysis at your fingertips.