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
Mixed
Oil - US Crude
Bearish
Wall Street
Mixed
Gold
Bearish
GBP/USD
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
USD/JPY
Bullish
More View more
Real Time News
  • The US Dollar is testing key support levels against the Singapore Dollar, Malaysian Ringgit, Philippine Peso and Indonesian Rupiah following persistent losses. Get your #ASEAN currencies market update from @ddubrovskyFX here: https://t.co/qqYDELqydd https://t.co/WPUL1SO8Fv
  • - #USDollar may catch a haven bid as the US and China lock horns over technology - #TrumpExecutiveOrders may encounter congressional friction, spark dash to cash - #bidenvppick announcement could fail to stir markets unless the choice is unexpected https://www.dailyfx.com/forex/fundamental/article/special_report/2020/08/10/US-Dollar-Comeback-Ahead-US-China-Tensions-Push-Havens-Higher.html
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.01%, while traders in US 500 are at opposite extremes with 77.49%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/AB97lqEJQB
  • Forex Update: As of 04:00, these are your best and worst performers based on the London trading schedule: 🇬🇧GBP: 0.18% 🇳🇿NZD: 0.13% 🇯🇵JPY: 0.12% 🇪🇺EUR: 0.08% 🇨🇦CAD: 0.05% 🇨🇭CHF: -0.06% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/ThG7IBzIKu
  • Indices Update: As of 04:00, these are your best and worst performers based on the London trading schedule: FTSE 100: 0.67% France 40: 0.66% Germany 30: 0.60% Wall Street: 0.23% US 500: 0.14% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/2l1TvwiW5l
  • The Indian Rupee struggled to benefit from an unexpected RBI rate hold as the Nifty 50 inched closer to invalidating a bearish reversal signal. What is the road ahead for USD/INR? Find out from @ddubrovskyFX here:https://t.co/Zjiay6hQWT https://t.co/IdM8hb6pI1
  • Join @ZabelinDimitri 's #webinar at 11:30 PM ET/3:30 AM GMT to find out how geopolitical risk will affect the markets in the week ahead. Register here: https://t.co/hsULxMNOtM https://t.co/TJbPf8arC3
  • Commodities Update: As of 02:00, these are your best and worst performers based on the London trading schedule: Oil - US Crude: 1.26% Gold: -0.27% Silver: -1.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/4Ap99p4ATh
  • Forex Update: As of 02:00, these are your best and worst performers based on the London trading schedule: 🇦🇺AUD: 0.18% 🇬🇧GBP: 0.16% 🇯🇵JPY: 0.14% 🇪🇺EUR: 0.09% 🇨🇦CAD: 0.08% 🇨🇭CHF: -0.04% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/5NRt7MMbs6
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 95.84%, while traders in US 500 are at opposite extremes with 78.33%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/NedpyrXTeR
Watch S&P 500 and Nasdaq Thursday Open after Tesla Earnings, EURUSD Running

Watch S&P 500 and Nasdaq Thursday Open after Tesla Earnings, EURUSD Running

2020-07-23 02:30:00
John Kicklighter, Chief Strategist
Share:

S&P 500, Nasdaq, Tesla, EURUSD Talking Points:

  • Despite the tailwind from confirmation of a large EU stimulus program (750bln euros), risk trends spun their tires this past session
  • With Tesla and Microsoft – speculative favorites for momentum and tech designation – reporting earnings beats, will Thursday’s take the prompt?
  • Should sentiment fail to launch, concerns over persistent recession, the steady march of the pandemic and growing pressure in the US-China trade war stands ready to tear markets down

Risk Appetite Jumps from Stimulus to Earnings Focus

There was a reliable tailwind for risk appetite trends heading into Wednesday’s session in the form of the EU’s long-awaited passage of a 750 billlion euro stimulus program. That infusion of support hits a familiar nerve that has charged trends on stimulus following programs from major governments’ pandemic stimulus responses or central bank programs from the likes of the Federal Reserve. Despite the scale of the program, the risk appetite it inspired was notably limited with both the German DAX and US’s S&P 500 index flagging for momentum this past session. In case the concern was that the stimulus didn’t register at all, EURUSD’s climb suggests differently. I wouldn’t write risk trends off altogether however.

Germany 30 MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 1% -1% 0%
Weekly -22% 44% 5%
What does it mean for price action?
Get My Guide

Chart of DAX to S&P 500 Ratio Overlaid with EURUSD in Blue (Daily)

Chart of DAX to S&P 500 Ratio Over EURUSD

Chart Created on Tradingview Platform

For risk appetite, the focus is likely to shift over the coming trading session. While stimulus is still very much a systemic theme that can regain the lead on markets, it will likely require another important update. Perhaps the United States’ follow up coronavirus stimulus program following the expiration of the first infusion is the next accelerant, but that is not on a particularly reliable track at present. Instead, earnings is my principal focus heading into the open of Thursday’s New York session. After hours, this past session, speculative favorite Tesla reported its fourth quarter of profitability ($0.50 EPS) which technically earns the company a spot in the S&P 500. Given the sheer speculative momentum behind this unusual company, its headline could set the tone for the entire market. Meanwhile, tech giant Microsoft reported its own $38 billion in revenues readily beat the $36.5 billion consensus forecast.

Equities Forecast
Equities Forecast
Recommended by John Kicklighter
Get Your Free Equities Forecast
Get My Guide

Chart of Nasdaq 100 with 50-Day Moving Average and Tesla in Purple (Daily)

Chart Nasdaq 100 and Tesla

Chart Created on Tradingview Platform

The speculative charge for the likes of Tesla and market-cap leading tech leaders like Microsoft can fuel remarkable risk appetite. Then again, it can also stretch markets to ‘bubble-like’ circumstances. Sentiment without fundamental support creates an environment in which any unexpected flaw in conviction can open up a troubling fraction in loosely held confidence. Naturally, the most productive benchmarks in this environment feed the greatest risks of bubbles. That aligns naturally to my poll which asks participants which market they felt was most likely to turn into a bubble that ultimately collapsed. The Nasdaq soundly drew the greatest percentage of the votes.

Read Paul Robinson’s article on some of the most impressive bubbles in recent market history.

Twitter Poll of First Major Market to Break

Twitter Poll

Poll from Twitter.com, @JohnKicklighter Handle

EURUSD Shows a Potential Systemic Shift in Ultimate Haven Status

While the development of risk trends remains my principal fundamental focus through the upcoming session, that isn’t the only matter worthy of market movement. EURUSD touches upon competing but productive winds. This benchmark pair has extended its charge following the 1.1450 technical break with an advance to levels not seen since October 2018. While there is traditional fundamental event that can be digested for this type of motivation, the practicality of stimulus benefitting Europe while the struggle to agree on a second round of pandemic-fighting stimulus from the US government makes for a practical driver.

EUR/USD MIXED
Data provided by
of clients are net long. of clients are net short.
Change in Longs Shorts OI
Daily 6% 3% 4%
Weekly 9% 11% 10%
What does it mean for price action?
Get My Guide

Chart of EURUSD with Disparity Between Spot and 200-Day Moving Average (Daily)

Chart of EURUSD with Difference Between Spot and 200-Day Moving Average

Chart Created on Tradingview Platform

Unlike the immediate session following the news of the EU’s 750 billion stimulus program whereby the Euro was lacking for charge, the world’s second most liquid currency showed greater productivity across the board through Wednesday. From EURUSD to EURGBP to EURJPY, the shared currency threw around its weight. That said, the Greenbacks’ struggle Tuesday carried forward to the past session. The DXY Index fell to October 2018 lows, but this measure’s principal weighting is in EURUSD. With insight from pairs like USDJPY and AUDUSD, it was clear that the Dollar was doing its own significant downshift. My equally-weighted USD index is leaning heavily on a well-tested range floor dating back two full years.

Chart of DXY Dollar Index (Weekly)

Chart of DXY Dollar Index

Chart Created on Tradingview Platform

Keeping Tabs on Stimulus Havens and Alternative Systemic Risks

A weak Dollar can carry significant knock-on consequences in the open market. For example, the commodities priced in the benchmark can enjoy a remarkable boost. Gold seems to be taking advantage with another strong reach following the 1,820 breakout. That said, a measure of the precious metal equally weighted in USD, Euro, Pound and Yen has similarly stretched but to fresh record highs for the eighth time in 18 trading days. And, before we chalk this drive up to haven demand, silver has enjoyed an even more prolific surge suggesting speculative appetite is at work in this channel as well.

Chart of Gold with Ratio of Gold to Silver in Red (Daily)

Chart of Gold and Ratio of Gold to Silver

Chart Created on Tradingview Platform

As we watch the balance of risk benchmarks and havens amid a speculative windfall for eyes glazed over by earnings, I feel it remains critical that we follow other systemically important fundamental themes. The coronavirus is only temporarily outmatched for headline space with constant reminders of the spread and its economic implications. Speaking of which, the Friday PMIs for Australia, Eurozone, UK and US can readily ground our focus. The same is true for the knock on effects of economic hardship such as the revival of the trade wars. News that the United States had pushed the closure of the Chinese consulate in Houston was a top concern Wednesday morning before earnings took over. I am always on the lookout for the convergence of fundamental and technical developments, and this news seemed to align neatly to USDCNH’s reversal from a multi-year trend channel support.

Chart of USDCNH with 20-Day Moving Average (Daily)

Chart of USDCNH

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

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.