Risky assets reach new long-term highs against the US Dollar but pull back later.
- The decline in the US Dollar in line with its long-term bearish trend continued yesterday, with several risky assets reaching new long-term highs against it:
- The S&P 500 Index closed at a new all-time high.
- Gold closed at a new all-time high.
- The EUR/USD currency pair briefly traded at a new 1-year high above $1.1200 before pulling back.
- The GBP/USD currency pair briefly traded at a new 2.5 year high above $1.3400 before pulling back.
- The Chinese Yuan reached a new 16-month high against the USD.
- Risk-on sentiment continues to dominate markets, but the Asian session has brought a retracement, albeit a relatively shallow one. Therefore, there is a good chance of these trends against the Dollar resuming, which could provide an opportunity to traders today.
- In the Forex market, the Australian Dollar has been the strongest major currency since the Tokyo open today, while the Japanese Yen has been the weakest, putting the AUD/JPY currency cross in focus as a showcase of risk-on price movement. Trend traders will be keeping a close eye on the EUR/USD currency pair, which is not far from closing at a new 1-year high, which could be a good long trade entry signal.
- The NASDAQ 100 Index is advancing firmly and is trading above 20,000 for the first time in a while, showing a recovery in technology stocks.
- Many commodities, notably Crude Oil but also some softs, are looking much stronger with the improvement in risk sentiment over the past few days. Sugar futures closed yesterday at a new 6-month high, which is typically a good long trade entry signal, although a long trade here may be a bit premature.
- The Swiss National Bank will be holding a policy meeting today, at which it is expected to cut its Policy Rate from 1.25% to 1.00%.
- There will be a release of Final US GDP data today, which is expected to show unchanged annualized GDP growth of 3.0%.
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