Markets remain in a positive grind at the moment, as the last few weeks of selling appear to be forgotten for the time being.

Of course, we have to remember that generally speaking volatility moves from periods of contraction to expansion.

I think of it in terms of energy. It takes a fair bit of energy to move markets in one direction or another and afterwards there needs to be a period of quiet for that energy to reset itself and recharge.

That might be what we are seeing now in equities as volatility contracts ahead of the next sharp move.

For the time being, that volatility contraction is seeing the USD weaken along with the JPY and there is some money flowing into risk assets again.

How long that will last is really the question and as the main economic events occur towards the end of the week, that might well be the answer.

Forex Signal Update

The FX Leaders Team ha a relatively quiet start to the week, finishing 2 and 1 on the session. Check out the updated signals performance for the 2018 calendar year as it was another strong one for FX Leaders Team.

GOLD – Gold has been on the charge in recent times, but we still haven’t taken out 1300. The market looks a little toppy in the short-term.

WTI – Oil has bounced a touch overnight but is also still shy of the key $50 level. Look for some opportunities as we approach that, however, price will be subject to the fallout from the US-China trade talks.

NZD/USD – Active Signal

The Kiwi has been in a downtrend for a few months now, however, this last little bounce that we’ve seen in the risk-on pairs has allowed us to get an opportunity to get short. Looking for a continuation to the downside.

EUR/USD – Pending Signal

The EUR/USD has actually been quite range bound for a while now, as the ECB hasn’t made any meaningful changes in many months. While we do have the ECB minutes later this week, at current levels, we are looking for a short and a move back into the range.

Cryptocurrency Update

BITCOIN continues to battle the $4,000 and so far it is holding. There is plenty of resistance above and it will have its work cut out to get through both $4,400 and $4,200 should it actually break.

The downtrend is strong, however, if it breaks out above all the resistance, that is a massively bullish sign.

We also have to remember that the entire section is highly correlated to BTC, so if we do get a run, that will be big news across the board.