Trade ideas thread - European session 25 March 2020

Author: Justin Low | Category: News

Daily thread to exchange ideas and to share your thoughts

So, a US stimulus deal is reached. Is it time to sell the fact?

The market has been brushing aside central bank and government action for the most part over the past three weeks but with the ECB launching a bazooka and the Fed going nuclear, it is getting a bit hard to ignore the recent interventions.

The monstrous rally in the stock market yesterday is but another sign of the volatility in the market right now and that there are still plenty of moving parts at play.

For some perspective, the Dow posted its largest one-day gain since 1933 yesterday and that comes after its biggest one-day fall since 1987 last week.

And despite yesterday's rally, the Dow is still down by over 27% year-to-date.

As Adam said: Every bottom starts with a bounce, but not every bounce is a bottom.

Looking over to major currencies, we are starting to see some shifts in near-term sentiment in the dollar as AUD/USD and NZD/USD break above their key hourly moving averages.

But for most other dollar pairs, things are less decisive with price action still sitting in between both key hourly moving averages i.e. near-term bias more neutral.

As such, I'm still not counting out the dollar just yet but given recent price action, it is signaling at some exhaustion and a pause for the dollar momentum at least.

The US weekly initial jobless claims tomorrow will be one to watch in case it gives the market something to run with. But for now, it is still floating somewhere between 'retracement week' and 'early rally, late fizzle'.

What are your views on the market right now? Share your thoughts/ideas with the ForexLive community here.

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