US stock markets have made their deepest bearish retracements in months, leading to the liquidation of many long positions.
- Although stock markets have bounced back somewhat in recent hours after the G7 renewed commitments allowing members to defend their currencies against a surging US Dollar, several major indices have made their deepest bearish retracements in months. Both the NASDAQ 100 Index and the S&P 500 Index have given up more than 3 times the long-term average daily true range. The selloff is seen as partly due to more hawkish expectations on US rate cuts and partly due to tensions in the Middle East, although the latter is not persuasive as Crude Oil continues to weaken.
- Precious metals Gold and Silver are holding up relatively well, suggesting that they are keeping their relative strength and are quite likely to rise to new highs eventually.
- Bitcoin’s halving is expected to happen on Friday or Saturday. Bitcoin’s price action continues to look bearish, with the price about 15% lower than the high made earlier this month.
- In the Forex market, since today’s Tokyo open, the strongest major currency has been the Australian Dollar, and the weakest major currency has been the US Dollar, putting the AUD/USD currency pair in focus. The Japanese Yen is not showing any strength despite the Bank of Japan stating that its short-term policy adjustment is likely to move at a slow pace.
- Crude Oil is continuing to move lower.
- There will be a release of US Unemployment Claims data today.
- The earlier release of Australian Unemployment Rate data saw a smaller rise in unemployment than expected, from 3.7% to 3.8%.
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