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Daily Forex Market Commentary
The U.S. dollar gained significant ground on all the major currencies today except the Japanese yen.
The broad sell-off in equities and commodities meant a resurgence of U.S. dollar strength today. The AUDUSD lost significantly, closing nearly 100 pips lower over yesterday’s close. The Canadian dollar also lost big to the greenback as crude oil prices took a $2.72/a barrel tumble lower, the USDCAD closed up over 100 pips.
Looking ahead, the resurgence of U.S. dollar and Japanese yen strength today may continue into next week should earnings reports and economic data continue to disappoint Wall Street.
Stocks:
On Wall Street today stocks got hammered lower in the heaviest trading this year which produced a dramatic end to the recent six-day winning streak in equities. Fraud charges against Goldman Sachs and sub-par earnings sent investors running for the hills.
Today’s sell off was the market’s biggest decline in nearly two months, taking the polish off a very strong rally just as investors are awaiting a plethora of earnings reports next week.
The Dow was down 125.91 points, or 1.13 percent, the S&P 500 was down 19.54 points or 1.61 percent, and the Nasdaq was down 34.43 points, or 1.37 percent.
Currency pair in focus: GOLD
Today we are looking at the daily spot gold chart. While gold is obviously not a currency pair, it is accepted all over the world as currency and its movement has a direct and substantial influence on all the major currency pairs, especially the U.S. dollar.
Notice in the chart the small bearish pin bar that formed near resistance around 1160.00/1170.00 on Monday of this week, the pair subsequently consolidated sideways just beneath this resistance area but could not break higher. Today the pair sold lower quite dramatically, there is not much support until around 1075.00.
For a more in-depth analysis of the major FX pairs as well as price action training, please check out my forex trading course.
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