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
Subscribe
Please try again
EUR/USD
Bullish
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
Oil - US Crude
Mixed
Wall Street
Mixed
Gold
Mixed
GBP/USD
Bearish
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
  • Indices Update: As of 17:00, these are your best and worst performers based on the London trading schedule: FTSE 100: -0.40% Germany 30: -0.48% France 40: -0.53% Wall Street: -0.90% US 500: -1.39% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/WrZvjEBs4w
  • USTR Nominee Tai says US has enforcement tools to hold China accountable for not meeting commitments
  • Heads Up:🇺🇸 Fed Bostic Speech due at 17:00 GMT (15min) https://www.dailyfx.com/economic-calendar#2021-02-25
  • USD v G10 and EMs https://t.co/fReXOc9PLl
  • it's not copper, tin or random length lumber futes but $silver has a pretty compelling setup here https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/02/25/silver-price-forecast-xag-usd-xagusd-settles-can-bulls-force-slv-breakout.html https://t.co/H08rZmgFe9 https://t.co/8tD1tQJ2Tk
  • Is the 3rd time the charm at the 30 handle for $Silver? set a fresh seven-year-high to start the month, has held support even as gold has tipped-lower. Buyers so far have been holding the line $XAG $SLV https://www.dailyfx.com/forex/fundamental/daily_briefing/session_briefing/daily_fundamentals/2021/02/25/silver-price-forecast-xag-usd-xagusd-settles-can-bulls-force-slv-breakout.html
  • Hey traders! Get your Thursday market update from @DailyFX Chief Strategist @JohnKicklighter 👇 https://t.co/50r5qyuMP4
  • Fed's Bullard: - Fed will be less preemptive to tighten than in the past - Sees more inflation pressure in 2021 than in previous years #Fed $USD
  • The British Pound is beginning to lose ground against the commodity currencies: the AUD, the NZD, and the CAD, suggesting that its recent broad strength may be drawing to a close near-term. Get your $GBP market update from @MartinSEssex here:https://t.co/d015Cpcj1W https://t.co/LFQWfh34pY
  • EUR/USD climbs to a fresh monthly high (1.2238) following the semi-annual testimony with Federal Reserve Chairman Jerome Powell. Get your $EURUSD market update from @DavidJSong here:https://t.co/mGjClEgEhd https://t.co/dvqtOOCZok
S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

John Kicklighter, Chief Strategist

Dow, EURUSD, AUDUSD, Oil Talking Points:

  • S&P 500 gapped higher to start the week but couldn’t hold above the 200 MA, the Dow held onto some of its active gains but the Nasdaq 100 completely retraced and ended the day lower
  • For now, hopes of a coronavirus vaccine has overridden concerns of a broader US-China dispute over the latter’s pressure on Hong Kong
  • A Dollar retreat sent the DXY to the bottom of its multi-week range, but a few majors secured breaks like USDCAD and NZDUSD

A Key Gap That Failed Critical Momentum

The return of London and New York trade Tuesday had a material impact on liquidity and an unmistakable boost to trading activity. On the open of US trade, there was a charged speculative run that resulted in a few high profile technical accomplishments. For the S&P 500, the opening salvo earned a charge to the 200-day moving average (3,000) which the market briefly traded above. The blue-chip Dow hurdled a similarly important level at 25,000; but neither would hold their respective critical levels. That would lead to some serious questions as to commitment by the speculative masses. With other major risk benchmarks – global indices, emerging markets, junk bonds, carry, etc – trading far behind their major resistance levels, is sentiment at risk of losing critical traction?

How to Use IG Client Sentiment in Your Trading
How to Use IG Client Sentiment in Your Trading
Recommended by John Kicklighter
Improve your trading with IG Client Sentiment Data
Get My Guide

Chart of S&P 500 with 100 and 200-Day Moving Averages (Daily)

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Chart Created on Tradingview Platform

Looking at the US indices as a group, there was a notable contrast among the major measures. Over the past months – not to mention the past years – the tech-heavy Nasdaq index has outpaced the broader measures (ie S&P 500) as well as the blue-chip measures (ie the Dow). That wasn’t the case for the first full session for US trade this week. Risk appetite, as we have come to know it, seemed to ebb with the ratio of NDX-to-DOW posted its biggest retreat in a few months. On a questionable ‘risk on’ day, that draws some serious questions. Those questions extend further to the other risk measures across the global markets.

Equities Forecast
Equities Forecast
Recommended by John Kicklighter
See the DailyFX outlook for Global equities through 2Q
Get My Guide

Chart of S&P 500 with 100 and 200-Day Moving Averages (Daily)

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Chart Created on Tradingview Platform

The Fundamental Charge That Will Take Responsibility for Markets

What is taking fundamental charge at the moment. That is something we should be able to identify for the broader market as it can helm the most effective theme in the financial system: speculative appetite. I believe sheer risk trends are exerting a greater influence than virtually all other identifiable themes as of late – and that includes the focus on the intensity of recession or the scale of global stimulus. Perhaps ironically, President Trump seemed tap into the self-sustaining aspects of risk appetite when he noted Tuesday that the local indices had clear critical levels – and he in turn connected the sheer sentiment view to tangible fundamental milestones.

Twitter Statement by US President Trump

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Screenshot from Twitter, @realDonaldTrump

Meanwhile, the recession threat that continues to weigh the ‘lagging’ indicators to new lows – such as the German final 1Q GDP update or Fitch official 2020 forecast – is overruled by the lower-impact indicators that nonetheless are more timely. Thematically, headline interest in the progress towards a vaccine to the Coronavirus (Covid-19) has had an obvious surge in influence lately. Following on the back of reports of progress in Gilead, Moderna and AstraZeneca drugs for combatting the pandemic; the news outlets seized on a new player: Novavax. The point is not who has the most effective treatment but rather who is taking over the most recent leg of enthusiasm.

Chart of Novavax, AstraZeneca in Red, Moderna in Blue, Gilead in Green (Daily)

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Chart Created on Tradingview Platform

While speculative appetite and vaccines have a bullish fundamental default, the deteriorating relationship between the US and China is a lurking bearish threat. China announced a national security law for Hong Kong that would override the region’s legislature. That announcement has drawn rebuke from Western democracies concerned about the implication for freedoms. With the White House chief economic adviser warning on the fallout from this move, traders should keep close eye on USDHKD (Hong Kong Dollar), USDCNH, the Hang Sent Index and Shanghai Composite for indications as to how risk trends will trend.

Chart of USDHKD Overlaid with S&P 500-Hang Seng Index Ratio (Daily)

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Chart Created on Tradingview Platform

Dollar Dives for a DXY Range, USDCAD and NZDUSD Breakouts

Meanwhile, the benchmark Dollar took a dive through this past session. Whether this was a reflection of the Greenback’s standing as a dis-used haven, a relative loss in fundamental traction or perhaps a drop in yield potential is unclear. Nevertheless, if we were to look at the potential for follow through, that question would be important to answer. For the DXY Dollar Index, the slide brought the benchmark to its congestion (back to mid-March) floor and 100-Day moving average. EURUSD was similarly closing on its 200-day moving average as resistance around 1.1000.

Chart of DXY Dollar Index with 100 and 200-Day Moving Averages (Daily)

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Chart Created on Tradingview Platform

Alternatively to the boundary test of DXY or EURUSD, we have the clear progress from the likes of GBPUSD or AUDUSD. Both would hit fresh recent highs which is in turn multi-month highs for these benchmarks. Yet, the technical cues are not that remarkable in the grand scheme of things. If I were looking for the most technical punch, it would come from the likes of USDCAD and NZDUSD. Both ‘lesser majors’ triggered high profile technical breaks. Yet, we have seen so many high visibility breaks these past weeks and months. The real question is follow through. Is there any potential of that here?

USD/CAD BEARISH
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 3% -15% -2%
Weekly 9% -23% -1%
What does it mean for price action?
Get My Guide

Chart of USDCAD with 100- and 200-day Moving Averages (Daily)

S&P 500 Can't Extend a Bullish Gap, Dollar Drop Cues USDCAD, NZDUSD Breaks

Chart Created on Tradingview Platform

Building Confidence in Trading
Building Confidence in Trading
Recommended by John Kicklighter
Building Confidence in Trading
Get My Guide

If you want to download my Manic-Crisis calendar, you can find the updated file here.

.

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

DISCLOSURES