Forex Analysis And Chartbook: Dollar and Oil Slide in Choppy Trading

Tuesday Market Snapshot

Asset Current Value Daily Change
S&P 500 2,750 0.39%
DAX 30 11,484 -0.09%
WTI Crude Oil 62.10 -0.96%
GOLD 1,227 -0.48%
Bitcoin 6,423 0.32%
EUR/USD 1.1412 0.05%

It has been a very quiet day in financial markets, with all eyes on the US midterm elections. The vote is a close call with regards to the House of Representatives and the Senate alike, with the Democratic House-GOP Senate outcome looking the most likely. That said, all combinations are plausible even today, and turn-out is expected to be very high by midterm standards. With the results coming out several hours after the IUS close, the Asian session could be way more active than usual.

EUR/USD, 4-Hour Chart Analysis

The Dollar and Treasuries could be the most affected by a surprise, with a Democratic sweep likely being the most bearish for the Greenback. The baseline scenario could see a usual post-election rally in risk assets, but given the decent deep risk-off shift, the odds of a strong year-end move are slim.

In any case, Treasury yields on the short end of the curve are edging towards their recent multi-year highs ahead of the elections and Thursdays Fed meeting, and while the Dollar lost ground in recent sessions, it’s still near its cycle high.

WTI Crude Oil, 4-Hour Chart Analysis

Besides the slight slip in the Dollar’s value, forex markets have been very quiet too, with larger moves in the most traded commodities. WTI Crude oil continued its decline towards the $60 per barrel level, as we speculated, and the commodity entered bear market territory today, losing more than 20% off its recent highs.

While the development of a larger scale trading range is still in the cards, a move below the $58-$60 could signal the end of the cyclical bull market in oil.

Pound Remains Volatile but Stock Markets Frozen

Nasdaq 100 Futures, 4-Hour Chart Analysis

The Pound produced the largest move in the forex space, as it has been the case so many times in recent weeks, since the Brexit saga continues to cause volatility in the currency. Although the GBP/USD is still clearly in a long-term downtrend, today’s new swing high is a positive technical sign, and we could be in for a test of the resistance zone marked by the September and October highs in the 1.3250-1.3350 area.

Gold Futures, 4-Hour Chart Analysis

Stock markets were little changed globally as volatility plunged lower across the board ahead of the important events of the week. As the US earnings season is practically over, and only the slightly worse-than-expected JOLTS job openings figure provided economic input, traders took a step back before the crucial vote.

After yesterday’s tech selloff, which was led by Apple (AAPL) today all of the major indices traded with low volatility, with range-contraction being the name of the game. The charts still look wounded across the main sectors, and although he oversold rally could continue in the coming weeks, we still treat the broader risk-off shift as an important and lasting change in the behavior of risk assets.


Major Stock Indices

S&P 500 Futures, 4-Hour Chart Analysis

Dow 30 Futures, 4-Hour Chart Analysis

VIX (US Volatility Index), 4-Hour Chart Analysis

DAX 30 Index CFD, 4-Hour Chart Analysis

FTSE 100 Index CFD, 4-Hour Chart Analysis

EuroStoxx50 Index CFD, 4-Hour Chart Analysis

Nikkei 225 Futures, 4-Hour Chart Analysis

Shanghai Composite Index CFD, 4-Hour Chart Analysis

EEM (Emerging Markets ETF), 4-Hour Chart Analysis


USD/JPY, 4-Hour Chart Analysis

GBP/USD, 4-Hour Chart Analysis

EUR/GBP, 4-Hour Chart Analysis

AUD/USD, 4-Hour Chart Analysis


Copper Futures, 4-Hour Chart Analysis

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Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.