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.



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

Live Webinar

Live Webinar Events


Economic Calendar

Economic Calendar Events

Free Trading Guides
Oil - US Crude
Wall Street
More View more
Real Time News
  • Forex liquidity makes it easy for traders to sell and buy currencies without delay, and also creates tight spreads for favorable quotes. Low costs and large scope to various markets make it the most frequently traded market in the world. Learn more here:
  • There is a great debate about which type of analysis is better for a trader. Is it better to be a fundamental trader or a technical trader? Find out here:
  • #Gold prices succumbed to selling pressure as the US Dollar soared this past week What is #XAUUSD facing these next few days and can these fundamental forces extend its selloff? Check out my outlook here -
  • GDP (Gross Domestic Product) economic data is deemed highly significant in the forex market. GDP figures are used as an indicator by fundamentalists to gauge the overall health and potential growth of a country. Learn use GDP data to your advantage here:
  • Many people are attracted to forex trading due to the amount of leverage that brokers provide. Leverage allows traders to gain more exposure in financial markets than what they are required to pay for. Learn about FX leverage here:
  • Key levels in forex tend to draw attention to traders in the market. These are psychological prices which tie into the human psyche and way of thinking. Learn about psychological levels here:
  • The price of #oil may continue to trade in a narrow range as the rebound from the September low ($36.13) appears to have stalled ahead of the month high ($43.43). Get your #commodities update from @DavidJSong here:
  • The Australian Dollar may extend its slide lower despite the planned easing of Covid-19 restrictions, as the market continues to price in an RBA rate cut on October 6. Get your #currencies update from @DanielGMoss here:
  • The Indian Rupee may be at risk to the US Dollar as USD/INR attempts to refocus to the upside. This is as the Nifty 50, India’s benchmark stock index, could fall further. Get your USD/INR market update here:
  • Technical indicators are chart analysis tools that can help traders better understand and act on price movement. Learn more about the importance of technical analysis here:
EUR/USD Triggers High Profile Reversal Pattern, SPX Gaps Lower

EUR/USD Triggers High Profile Reversal Pattern, SPX Gaps Lower

2017-03-28 00:06:00
John Kicklighter, Chief Strategist

Talking Points:

  • The S&P 500 suffered its biggest bearish gap in 8 years following last week's US healthcare policy collapse
  • Dollar found itself tied to the speculatively-driven markets with a key break for the DXY and EUR/USD H&S patterns
  • Focus carries forward with political tides, US sentiment, Fed speak and Brexit milestones presenting primed catalysts

See how retail traders are positioning in the majors using the DailyFX SSI readings on the sentiment page.

The news Friday after the close that the US healthcare reform effort had fallen apart exerted the expected pressure on the US markets and Dollar on Monday's open. The S&P 500 index suffered its largest bearish gap on the open in eight-and-a-half years while the ICE Dollar Index broke through the floor of a prominent head-and-shoulders pattern. Yet, on both accounts, there is not a sense of finality to this dramatic opening move. For the equity index, a rebound through the session helped to recover most of the opening losses; and further, risk aversion was not a universal spark for the world's financial markets. For the Greenback, a critical break of the EUR/USD's inverse head and shoulders didn't translate to exceptional technical progress on most of the other majors. This was the move to release some pent up pressure, but not a definitive change in conviction. That said, it could further set the stage for such a systemic view.

For US equities and the many other markets dependent upon favorable views of sentiment for performance, there is plenty of evidence to suggest current standings are precariously views of US political progress. The healthcare revamp poses a greater risk that more economically-directed tax reform and a new stimulus program could be far more difficult to push through - and perhaps even impossible. That does bode well for a market whose latest leg was a far reach and aligns very distinctly to the timing of the election. So, while there may be many components at play with sentiment's progress over the past months, it is likely that the fluidity of US policy is a main current. On that front, there is little scheduled ahead which we can track the progress - for better or worse - of this fundamental lever. There are no solid dates to discuss next steps on the proposals that matter the most, so headlines on upcoming debates or social media updates from US President Trump will have to be our volatile markers. That puts a serious burden on those holding risk - wait for relief that may never come, run the risk of confidence collapsing versus the restrained opportunity of further progress under ideal circumstances.

As for the Dollar. The risk connection is tangible. The appetite for the Dollar as early adopter carry currency and the hope for a robust pace of tightening moving forward are both wrapped up in the performance of the financial system. Should it falter, there is double pressure on the currency. The Dollar and EUR/USD reflected that, but the other majors weren't showing so troubled a picture. Sure, the Greenback slipped, but critical breaks and momentum were not as prevalent outside the Euro-cross. Fed speak and the Conference Board's consumer sentiment survey Tuesday may help stoke a direct Dollar view. Outside of the USD's pull, Brexit headlines will intensify and oil is on the hook with key support in view after an unfavorable OPEC/non-OPEC committee meeting this past week. We discuss the bigger developments in the market in today's Trading Video.

EUR/USD Triggers High Profile Reversal Pattern, SPX Gaps LowerEUR/USD Triggers High Profile Reversal Pattern, SPX Gaps Lower

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

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