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In the Zone
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Market Insight Commentary – Forex
Today's News Headlines
- Major trendline in Bitcoin was broken last night and comments out of the ECB did not help. This pair was trading at around 20,000 before Christmas but is now below 7,000, that’s a big move in just 6 weeks.
Market Insight Commentary – Indices
Market Recap
Yesterday was all about the US equity market, as all the major indices posted massive losses – has the market finally defined the top of the market? I am not entirely certain, sometimes when the market is waiting for a bubble to burst, the market runs with any momentum that is created. It has done a lot of work over the last couple of days and I wouldn’t be surprised if we see a small relief rally before we get confirmation of a down trend.
There is often a sharp reaction in both the US dollar and US yield market when the equity markets move so much and that is exactly what we saw yesterday. The yields move sharply lower and the dollar moves sharply higher.
The USDJPY is often the pair that trades in correlation to the equity markets and yields and as a result we saw the Yen trade sharply lower. The pair traded lower by 150 pips, it seems excessive, but it is pretty standard on days that we see massive equity moves. This means that the Yen is by far the strongest currency at present, it is trading on a major support level and technically speaking could encourage buyers to hang out a couple bids.
I will be watching the equity markets today as a driver, and still prefer to trade the commodity currencies.
Important Economic Data Due Today
15:30 CAD Trade Balance
Consensus: -2.3B
Effect: Actual higher than expected is good for the CAD
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