FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
Libertex information and reviews
FxPro information and reviews

US futures fluctuate following tech bounce

10 September 2020

After entering correction territory on Tuesday with an 11% decline from the highs, the Nasdaq 100 rebounded strongly on Wednesday rising 3% and led by the most beaten-up stocks, with Zoom Video Communications and Tesla up 11% on the day. While a drop of this size from the peak sounds like a steep correction, it remains a minor one given the index had rallied 83% from the March lows in a mere five months. With a price to earnings ratio of 36, valuations for the index are still significantly overstretched, hence we should expect more volatility in the weeks to come heading into the US Presidential Elections.

The 50-day moving average is offering strong support for the index and it needs a break below this level to encourage further selling. So far, the move lower is just being seen as the removal of some froth from the most overcrowded tech trade in decades, but it requires another selloff of similar magnitude to bring markets back to healthier levels.  US futures this morning have turned slightly positive after being in the red earlier this morning.

Traders awaiting Lagarde for guidance

The Dollar has strengthened sharply over the course of seven trading days. The DXY rallied from a low of 91.75 to 93.66 before giving up some of the gains yesterday and in today’s early trade. While better than expected economic data has lent some support to the Greenback, most of the rally was driven by the selloff in equity markets and not a change in fundamentals.

The Euro has fallen from a two year high of 1.2011 to 1.1750 and is currently trading slightly above 1.18 at the time of writing, with the single currency still up 5.5% on the year.

The European Central Bank policy announcement is the key event for the week and it will be interesting to see what action will be taken following the Fed’s adoption of average inflation targeting and comments from ECB’s Chief Economist Philip Lane who said the EURUSD rate “does matter”.

Latest developments in the Eurozone and especially the improvement in economic data rules out further easing for now, but given that the number of Covid-19 cases are rising again and negotiations with the UK over Brexit are not going well, the risks are mounting. The ECB had forecast inflation to reach 1.3% by 2022, so any downward revision to this figure may mean more stimulus is on the way.

While the ECB does not target a specific level for the Euro, Christine Lagarde may reiterate Philip Lang’s concerns that further strength in the single currency will hinder growth. Such a verbal intervention will likely bring the Euro lower, but without indication of further easing in the upcoming policy meetings, the selloff is likely to be short-lived.




The Euro rebounded from the low
The Euro rebounded from the low

After updating its multi-year lows again, the major currency pair rebounded. The current quote for the instrument is 0.9656. Last night, the local interest in risks improved a bit, helping the asset to successfully correct...

29 Sep 2022

Gold Shows Signs of Life, But Heads Towards Another Losing Month
Gold Shows Signs of Life, But Heads Towards Another Losing Month

The precious metal is largely considered as a hedge to inflation, but it has not confirmed this status during the current year. It did kick it off with a rally, but as the Fed begun hiking rates back...

28 Sep 2022

Forex and Cryptocurrencies Forecast for September 26-30, 2022
Forex and Cryptocurrencies Forecast for September 26-30, 2022

Last week, all the attention of the markets was focused on the FOMC meeting of the US Federal Reserve, which took place on September 21. The probability of another rate hike by 75 basis points (bp)...

26 Sep 2022

Trading the SPDR S&P 500 ETF Trust
Trading the SPDR S&P 500 ETF Trust

The Standard & Poor’s (S&P) 500 Index measures the market capitalisation of the top 500 US largest corporations. Many traders and investors use the S&P 500 Index as a benchmark...

23 Sep 2022

Gold pauses as traders await Fed decision
Gold pauses as traders await Fed decision

The anticlimactic performance of gold continues as the prospect of aggressive rate hikes by central banks around the world amid heightened inflationary pressures...

21 Sep 2022

Developing a forex trading plan: All you need to know
Developing a forex trading plan: All you need to know

All forex traders have different backgrounds, market views, risk appetite, thought processes and expectations. Therefore, traders should not just blindly follow what other traders do...

20 Sep 2022

Editors' Picks

HFM information and reviews
IronFX information and reviews
FXCM information and reviews
NordFX information and reviews
Vantage information and reviews
FP Markets information and reviews
FP Markets

© 2006-2022 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.