US Market Wrap

Just when sentiment was returning and as US equity markets regained their 2020 highs, it looks as though the bull run might have run out of steam.

All week long, markets had been really struggling to push higher, and that ultimately led to a savage sell-off yesterday, as the risk trade took a beating.

The SPX got dumped by 5.89%, and there was a flight back to safety. We’ve been following the key risk pairs including the NZD/USD and AUD/USD and both were hit hard.

Naturally, both GOLD and the Yen saw some interest as it appears markets were simply ripe for a pullback.

While US jobless claims keep on improving, this looks like it was the natural place for a correction. Although there were worries about further COVID cases, which had been something many investors were moving beyond.

The Data Agenda

After a week that was very thin on the ground in Europe, we’ll be looking to the UK to lead the way today.

For traders of the GBP/USD, the key release is GDP which is expected to show a huge contraction for the month at -18.7%. While this might be priced in, it isn’t going to be helping sentiment after yesterdays bloodbath on global markets. Some are saying the UK could be the worst hit of all developed countries.

At the same time, we also have manufacturing production scheduled for release which will paint an equally poor picture.

For the EUR/USD we have some data on CPI from various member countries as well as industrial production. On top of that, there are some top-level meetings going on in Europe at the moment so that might yield some headlines for news traders.

Finally to the US, the main release is Michigan Sentient and Export Prices, which in all honesty probably won’t impact the Greenback all that much.

Forex Signal Update

The FX Leaders Team hit 1 winner from 3 trades yesterday, as volatility returned.

Oil – Pending Signal

WTI fell hard along with other risk assets and is back at the key $35 level. There could well be an opportunity here today headed into the weekend.

NZD/USD – Active Signal

NZD/USD has taken a tumble but has run into support. We are long and looking for a quick bounce.

Cryptocurrency Update

BTC once again failed at the $10,000 level but this time we have to put the blame on the overall market – not just the Bitcoin whales.

That said, there is now a very clear correlation between the risk trade at the major cryptos, so we must keep that in mind going forward.