Market sentiment analysis:
- Traders remain concerned about the limited progress on a US fiscal stimulus package, the upcoming US election and the renewed spread of the coronavirus in Europe.
- That is leading to many of the FX pairs trading in narrow ranges.
- However, IG client sentiment data are still sending bearish signals for several of the leading FX pairs.
Sentiment data sending bearish signals
Traders remain concerned about the continuing lack of agreement on a US fiscal stimulus package, the upcoming elections in the US and the second wave of the Covid-19 pandemic currently flowing through Europe. That is leading to many assets – including FX pairs, commodities and stock indexes – trading within narrow ranges.
However, IG client sentiment data - which track the positioning of retail traders - are still suggesting downward moves on the way for several currency pairs and crosses, including USD/JPY[1], AUD/USD[2] and GBP/USD[3].
IG Client Sentiment Data (October 20, 2020)
Source: DailyFX (You can click on the table for a larger image)
In this webinar, I looked at the trends in the major currency, commodity and stock markets, at the forward-looking data on the economic calendar[4] this week, at the IG Client Sentiment page[5] on the DailyFX website[6], and at the IG Client Sentiment reports[7] that accompany it. You might also like to check out the DailyFX Trading Global Markets Decoded[8] podcasts.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me on Twitter @MartinSEssex
DailyFX[9] provides forex news and technical analysis on the trends that influence the global currency markets.
