Markets on Monday: Are Markets Entering a Correction Phase?
Rowan Crosby • 1 min read
The USD didn’t fire too many shots on Friday. However, it was stocks that felt the heat the most. The Dow and S&P 500 both had big red days, with moves of 2-2.5%.
US employment actually came out better than expected. There were more jobs created last month than had been predicted. That didn’t halt the sellers, who pushed markets to one of the biggest down days we’ve seen in some time.
The AUD was one of the big losers from the forex world, with the Aussie getting smashed all the way back down to 79 cents. It was only a few days prior that we had been trading at 81 cents. And in reality, there hasn’t been all that many chances.
The speculation around has been that markets are getting scared about potential rate rises. That is bullish for the USD. However, what is an interesting fact is that it’s also bullish for stocks. Historically, markets have risen with rate rises.
USD Resistance Holding
Despite the late strength in the Greenback we are still stuck beneath the 89.50 level. I am changing my bias now, to be more bullish.
I think Friday’s action is the stock market might follow through to some other asset classes and it might be time that the USD saw some strength returning.