Market sentiment analysis:
- Trader confidence in riskier assets is ebbing away, strengthening the safe-haven US Dollar[1], on concerns about the spread of the delta variant of Covid-19 and as lockdowns are imposed in Australia and several Asian countries.
- Meanwhile, the IG client sentiment data are sending out a bullish signal on the AUD/JPY[2] currency pair.
Trader sentiment worsens
Traders are becoming increasingly worried about the delta variant of Covid-19 and more lockdowns in Australia and several Asian countries. That’s sending investors out of riskier currencies such as GBP[3], CAD[4] and NZD[5] and into the safe-haven USD[6] – trends that look likely to continue. Note though that US stock markets are holding up well.
Meanwhile, IG client positioning data are sending out a bullish signal on AUD[7]/JPY[8] as net-short positions rise steeply.
AUD/JPY Price Chart, One-Hour Timeframe (June 11-29, 2021)
Chart by IG (You can click on it 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[9] this week, at the IG Client Sentiment page[10] on the DailyFX website[11], and at the IG Client Sentiment reports[12] that accompany it.
--- Written by Martin Essex, Analyst
Feel free to contact me on Twitter @MartinSEssex
DailyFX[13] provides forex news and technical analysis on the trends that influence the global currency markets.
