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
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
Mixed
Gold
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
GBP/USD
Bearish
USD/JPY
Bullish
More View more
Real Time News
  • Heads Up:🇺🇸 Fed Williams Speech due at 19:10 GMT (15min) https://www.dailyfx.com/economic-calendar#2020-09-25
  • Commodities Update: As of 18:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 0.07% Gold: -0.16% Silver: -0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/hbSoMksZVd
  • With South Africa recently easing restrictions in an effort to reopen the economy, investors are still wary about the future of the emerging market. Get your $USDZAR market update from @Tams707 here:https://t.co/f5Jmukipg0 https://t.co/o5Dyok2O99
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.19%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/eO8yAFDUvh
  • Indices Update: As of 18:00, these are your best and worst performers based on the London trading schedule: US 500: 1.06% Wall Street: 0.73% France 40: 0.65% Germany 30: 0.59% FTSE 100: 0.37% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/UFnW7j9LC3
  • Update on #Cryptocurrencies #BITCOIN +0.29% #BITCOINCASH +0.02% #ETHEREUM +0.51% #RIPPLE +3.72% #LITECOIN +2.19%
  • It took some time for USD/MXN to respond to weakness in equity markets, but this week it came to life as U.S. weakness spread across global markets. Get your $USDMXN technical analysis from @PaulRobinsonFX here:https://t.co/G8b6w1wCzH https://t.co/zEtpARMkMg
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 97.38%, while traders in EUR/GBP are at opposite extremes with 65.20%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/WGk95Bnjx5
  • Commodities Update: As of 16:00, these are your best and worst performers based on the London trading schedule: Gold: -0.45% Oil - US Crude: -0.63% Silver: -1.11% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/RvLy6xA9Is
  • Forex Update: As of 16:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: -0.06% 🇯🇵JPY: -0.15% 🇬🇧GBP: -0.22% 🇨🇦CAD: -0.32% 🇦🇺AUD: -0.38% 🇪🇺EUR: -0.43% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/MZIiNOFxXu
US GDP Sets Stage For US Dollar Test, Multiple Pairs Approach 200-WMA

US GDP Sets Stage For US Dollar Test, Multiple Pairs Approach 200-WMA

2017-07-27 20:30:00
Tyler Yell, CMT, Currency Strategist
Share:

Highlights:

  • DXY bounces from overnight low, likely on month-end profit taking
  • Fed digested as dovish for future hikes as per steepening UST 5s30s
  • EUR/USD and USD/CAD tag 2.618% Fibonacci extension off initial 2017 move, Testing 200-WMA
  • Sentiment Highlight: Crude Oil net-short positions rise ~40% week over week

The dollar seemed to have found life after trading at fresh 14-month lows after the Federal Reserve did what many expected them to do and hold rates at 1% and promise a “relatively soon” unwinding of their balance sheet that ballooned to $4.5T in response to 2008. However, in further dismembering of the statement that was not followed by a press conference, it appears that their language on below target inflation is having the effect of less priced in rate hikes, which appears bad for the USD. The market is no longer pricing in a rate hike in 2017, and a weak print at Friday’s US Q2 GDP could bring that expectation even lower and take the USD with it. Given the typical counter-trend moves that happen at month-end, some traders are looking at the short-term weakness in equities and strength in USD as a position unwind of global trades that were long US equities that could re-emerge at the start of August.

Recommended DFX Event: US GDP Round Table Coverage

One market that traders are looking to see if there is hope for the USD bulls is the US Treasury market and the respective spread between different tenors. A focal spread has been the US5s30s. The bond market marker has widened lately as traders buy the front end (UST 5) bringing down the yield as less inflation is expected out of the US while the 30yr yield is moving higher (price lower). This widening is seen in anticipation that the Fed Balance sheet unwind will be their primary tool for policy tightening as opposed to rate hikes. If the spread continues to widen, it would be expected to align with further USD weakness as you can see in the chart below.

Are you looking for trading ideas? Our Q3 forecasts are fresh and ready to light your path. Click here to access for FREE.

July Trend Of Widening US5s30s Aligning With Weakening Dollar Index (Orange Line)

US GDP Sets Stage For US Dollar Test, Multiple Pairs Approach 200-WMA

Chart created by Tyler Yell, CMT

For technically focused traders, many like to look at the 200-Day Moving Average as it covers nearly a rolling year’s average price. However, beyond the 200-Day is the 200-Week and a plethora of markets including EUR/USD, EUR/JPY, AUD/USD, EUR/CHF, USD/CHF, AUD/JPY, CAD/JPY, USD/CAD are seeing their price get awfully close or bouncing off the 200-DMA. While volatility has been low in equities, it could soon accelerate in FX if the price of any of these market has a strong reaction to the 200-WMA. Of particular focus is the price of EUR/USD & USD/CAD that have recently seen a 2.618% extension off their initial move of 2017. If the momentum remains, we could see a small pullback before the trend extends through the 200-WMA, which could align with a new era of cemented USD weakness. We’ll see.

JoinTylerin hisDaily Closing Bell webinars at 3 pm ETto discusstradeable market developments.

FX Closing Bell Top Chart: EUR/USD tests the 2.618% extension + 200-WMA (1.1794)

US GDP Sets Stage For US Dollar Test, Multiple Pairs Approach 200-WMA

Chart Created by Tyler Yell, CMT

Tomorrow's Main Event:USD Gross Domestic Product (Annualized) (2Q A)

Want to see the market’s reaction upon the news release? Need to ask questions to an analyst? Join the US GDP round table live broadcast.

IG Client Sentiment Highlight:US Oil net short positions rise ~45% Week over Week

The sentiment highlight section is designed to help you see how DailyFX utilizes the insights derived from IG Client Sentiment, and how client positioning can lead to trade ideas. If you have any questions on this indicator, you are welcome to reach out to the author of this article with questions at tyell@dailyfx.com.

US GDP Sets Stage For US Dollar Test, Multiple Pairs Approach 200-WMA

Oil - US Crude: Retail trader data shows 43.6% of traders are net-long with the ratio of traders short to long at 1.29 to 1. The number of traders net-long is 8.8% lower than yesterday and 26.3% lower from last week, while the number of traders net-short is 19.4% higher than yesterday and 45.8% higher from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests Oil - US Crude prices may continue to rise. Traders are further net-short than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger Oil - US Crude-bullish contrarian trading bias.(Emphasis mine)

---

Written by Tyler Yell, CMT, Currency Analyst & Trading Instructor for DailyFX.com

To receive Tyler's analysis directly via email, please SIGN UP HERE

Contact and discuss markets with Tyler on Twitter: @ForexYell

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

DISCLOSURES