Market Sentiment Constructive, Shares Profit Whereas US Greenback Eases

Market sentiment evaluation:

  • Dealer confidence stays excessive, with sturdy company earnings among the many components serving to shares on the expense of safe-haven belongings just like the US Dollar.
  • These tendencies look set to proceed near-term over every week dominated by central financial institution conferences.

Dealer confidence excessive

Dealer confidence stays at elevated ranges due to sturdy company earnings and quite a lot of different components resembling US/China financial and commerce talks, and Iran/EU discussions on reviving the nuclear deal beforehand in place.

These tendencies will seemingly stay in place close to time period over every week dominated by central financial institution conferences within the EU, Japan and Canada, with the S&P 500, for instance, wanting sturdy after the latest consolidation.

S&P 500 Value Chart, Each day Timeframe (Might 18 – October 26, 2021)

Latest S&P 500 price chart.

Chart by IG (You may click on on it for a bigger picture)

Bearish sign for AUD/JPY

Within the meantime, IG shopper positioning knowledge are sending out a bearish sign for AUD/JPY. The retail dealer numbers present 30.25% of merchants are net-long, with the ratio of merchants brief to lengthy at 2.31 to 1. The variety of merchants net-long is 61.90% larger than yesterday and 17.24% larger than final week, whereas the variety of merchants net-short is 4.39% decrease than yesterday and 10.73% larger than final week.

Right here at DailyFX, we usually take a contrarian view to crowd sentiment, and the very fact merchants are net-short suggests AUD/JPY costs could proceed to rise.But merchants are much less net-short than yesterday and in contrast with final week. Latest modifications in sentiment warn that the present AUD/JPY worth development could quickly transfer decrease regardless of the very fact merchants stay net-short.

AUD/JPY Consumer Positioning – IG Consumer Sentiment

Latest AUD/JPY client sentiment chart.

Supply: IG/DailyFX

On this webinar, I seemed on the tendencies within the main forex, commodity and inventory markets, on the forward-looking knowledge on the economic calendar this week, on the IG Client Sentiment page on the DailyFX website, and on the IG Client Sentiment reports that accompany it.

— Written by Martin Essex, Analyst

Be at liberty to contact me on Twitter @MartinSEssex

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