US Market Wrap

Despite the negative headlines in the media and the continued fallout from the social distancing measures aimed at containing COVID-19, markets don’t seem to care.

The rally in stocks, in particular, has continued with the likes of the NASDAQ almost back at record high levels.

The NASDAQ, SPX and Dow are 2%, 9% and 13% off their pre-COVID all-time highs, so that really shows us what is actually going on. We are seeing the same thing with some long positions unwinding in the USD and money flowing hard into the likes of the AUD/USD which is the leading risk-on pair.

In the commodity space, WTI is also fighting back, however, it’s GOLD that is the interesting trade and somewhat bucking the trend. While the yellow metal is a safe-haven, there appears to be a flight back to genuine assets across the board and forex pairs that can represent that fact.

So we are definitely experiencing a surge higher here and it’s important not to get drawn into what the mainstream media might be saying.

The Data Agenda

For the first time in a while, we are starting to see a bit of data for us to work with.

In early European trade, we get German employment data which is starting to show some signs of a recovery, so keep the EUR/USD in focus early on. Eurozone unemployment is also set to be released and will show a rise to 8.2%. Out of the UK, the GBP/USD will be watching services PMI for May.

Over to the US and the interesting number will be the private ADP data, which will show an improving jobs number. While still a large loss, it is going to be better than the prior month. And of course, this will be a good precursor to Friday’s official non-farm payroll data.

On top of the jobs number, we also get ISM non-manufacturing PMI and finally WTI crude oil inventories.

And not to be forgotten, amongst all of this we also have the BOC, who are expected to be leaving rates unchanged at 0.25%. But the FX Leaders team will have more on that and the USD/CAD later in the day. 

Forex Signal Update

The FX Leaders Team hit 3 winners from 4 trades yesterday, as the guys put in a really solid performance.

EUR/GBP – Active Signal

The EUR/GBP has been dumped from the 0.9000 level and is now on the cusp of 0.8900. We are short here looking for more downside under that level.

Oil – Pending Signal

WTI is thorough the $35 level and bullish. The risk-on trade is alive and well here, but just be cautious with inventories due out today.

Cryptocurrency Update

Am I the only one here feeling a sense of deja-vu with BTC at the moment?

Once again we have seen a test of the $10,000 level and a massive smackdown. And as we saw last time, size has liquidated into this rally, which has been the story of the last few months. So if the big players keep selling at these levels, what is it saying about the fundamentals at the current price?

What we do know, is if $10,000 ever holds we could be seeing a huge rally. But until that point, false breaks might be the order of the day.

This all comes on the back of Coinbase crashing which just adds to the intrigue at the moment.