Market Sentiment Improves, Shares Profit as US Greenback Sinks

Market sentiment evaluation:

  • Dealer confidence continues to rise, weakening the safe-haven US Dollar however benefiting so-called threat belongings akin to Wall Street shares.
  • These traits will seemingly proceed for some time, with the S&P 500 set to problem the highs.

Dealer confidence rising

Dealer confidence is returning to the markets, with cash flowing out of secure havens just like the US Greenback and into belongings thought to be extra dangerous, akin to Wall Avenue shares. The advance in international threat sentiment can be strengthening the costs of belongings akin to copper and crude oil that may profit from stronger international demand.

Furthermore, for now at the very least, the markets appear to be shrugging off constructing inflation pressures that can seemingly result in tighter financial coverage in nations such because the UK and the US, suggesting that these traits could proceed.

S&P 500 Value Chart, Every day Timeframe (April 20 – October 19, 2021)

Latest S&P 500 price chart.

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

Bullish sign for USD/CAD

Within the meantime, IG consumer positioning information are sending out a bullish sign for USD/CAD. The retail dealer information present 73.21% of merchants utilizing the corporate’s platforms are net-long, with the ratio of merchants lengthy to quick at 2.73 to 1. The variety of merchants net-long is 0.60% decrease than yesterday and seven.22% decrease than final week, whereas the variety of merchants net-short is 26.57% greater than yesterday and 14.20% greater than final week.

Right here at DailyFX, we usually take a contrarian view to crowd sentiment, and the very fact merchants are net-long suggests USD/CAD costs could proceed to fall.But merchants are much less net-long than yesterday and in contrast with final week. These recent adjustments in sentiment warn that the present USD/CAD worth development could quickly reverse greater regardless of the very fact merchants stay net-long.

USD/CAD Positioning – IG Shopper Sentiment

Latest IG client sentiment data for USD/CAD.

Supply: IG/DailyFX

On this webinar, I regarded on the traits within the main foreign money, commodity and inventory markets, on the forward-looking information 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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