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Market Sentiment Benefiting From Lockdown Hopes | Webinar

Market Sentiment Benefiting From Lockdown Hopes | Webinar

2020-04-28 12:00:00
Martin Essex, MSTA, Analyst
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Market sentiment analysis:

  • Trader confidence has been helped by hopes that the worldwide lockdown due to the coronavirus pandemic may be eased soon and by some strong corporate earnings reports.
  • That suggests the current rally in riskier assets could continue but several bearish signals from IG client positioning data mean traders need to be cautious.

Trader confidence in riskier assets rises

Traders are becoming more confident in the outlook for riskier assets, suggesting further rises are on the way for stocks and the “risk on” currencies such as EUR, GBP, AUD and NZD. However, IG client sentiment data are sending out some bearish signals, suggesting that traders need to be cautious chasing prices higher.

One example is the FTSE 100 index of major London-listed stocks, which is trending higher but seems to be lagging Wall Street.

FTSE 100 Price Chart, One-Hour Timeframe (April 23-28, 2020)

Latest FTSE 100 price chart.

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

FTSE 100 BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 16% -5% 3%
Weekly 18% -3% 5%
What does it mean for price action?
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While sentiment has been helped by hopes that several countries will soon ease the coronavirus restrictions, and by some strong corporate earnings reports, sentiment is unlikely to recover fully until the crude oil market settles down.

A Brief History of Major Financial Bubbles, Crises, and Flash-crashes

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

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

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