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, AUD/USD and GBP/USD.
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 this week, at the IG Client Sentiment page on the DailyFX website, and at the IG Client Sentiment reports that accompany it. You might also like to check out the DailyFX Trading Global Markets Decoded podcasts.
Recommended by Martin Essex, MSTA
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— Written by Martin Essex, Analyst and Editor
Feel free to contact me on Twitter @MartinSEssex