Sentiment Is Driving The Market, EUR/USD
Skerdian Meta • 1 min read
Market sentiment has been driving the markets around for quite some time now. The sentiment is always an important factor in forex, but usually, the central banks and economic data run the markets.
However, over recent months that has changed. It seems that market sentiment is running the show now. The economic data and central banks have taken on a peripheral role and only manage to move the market occasionally.
This is clearly portrayed in EUR/USD over the last few trading sessions. Last Friday the US employment report was decent, with unemployment falling to 4.4%. However, the USD lost about 40-50 pips, which didn´t make any sense technically or fundamentally. This seems to have been based solely on market sentiment.
We´ve been seeing the same thing today with the Euro. Earlier today, the German factory orders and Eurozone investor confidence figures beat the expectations but the Euro continues to slide.
So, EUR/USD jumped last Friday after the positive US employment report and it jumped again last night when the market opened. Since this morning though, it has been sliding despite the better economic data coming from the Eurozone.
It´s not that easy trading the market sentiment because you never know when it might change. Sometimes it does so in a split second, so we will be following it until it changes, hence the buy forex signal in USD/JPY.