Effective forex trading will often come down to the types of assets that you choose, instead of the methods that people use to determine trade exits and entries. And to choose the right type of assets, you need a broader understanding of the events that are transpiring throughout the market.
Through this quick analysis, you will learn about the latest events that have transpired throughout the market and get insight into how the next week might look. By getting this broader perspective, you can even make more informed decisions about the assets that you invest in.
Overall Current Market Sentiment
As of now, investment news is more or less saturated with news about stocks, and the bullish market that it has at the moment. The market in general has been seeing record lows for the NASDAQ 100 and the S&P 500. As for other assets like the Chinese HSI, they managed to reach lows unseen for a decade.
Understanding the current sentiment surrounding different investment markets helps understand the relationship that it has to the forex market. With many investors moving away from stocks, the US dollar was surprisingly stable throughout.
Many found that the US currency made for a good safe haven for previously speculative funds. In fact, investor confidence in the dollar was so high that US treasury yields reached an all-time high.
The US dollar also got a boost from the US Core PCE, which showed a stronger increase than most analysts already expected. It is obvious that the US Federal reserve it looking to further strengthen the dollar despite the stock market experiencing record lows.
The British Pound takes a sharp plunge
One of the biggest developments that occurred during the week was that the prices for the Pound took a major dive. In fact, analysts had yet to see a plunge this massive since the days of the Brexit referendum. As a result, the preceding week opened with a price of $1.0350 price, which was an all-time low.
This was likely the most volatile plunge in the currency’s history.
What the following week holds in store
Along with considering the events that are currently taking place throughout the market, it is also important to consider the predictions that various analysts provide. However, the volatility that has become a staple of the preceding weeks shows no signs of stopping any time soon.
The following week will also have a number of major data releases, making the market even more volatile. Major data releases will include the Swiss CPI, OPEC meetings, and the RBA cash rate, just to name a few.
It will also be a public holiday in Australia and Germany on the 3rd of October. As for China, the next week is a public holiday.