Today's Highlights
Pound Briefly Below 1.20
Modest Safety Sentiment
Martin Luther King Day (US Stocks Closed)
Please note: All data, figures & graphs below are valid as of January 16th. All trading carries risk. Only risk capital you're prepared to lose.
What a Gap!!
This week opened with a bang and a pop as the British pound started trading with an enormous gap down. This morning we're seeing the cable (GBP/USD) as low as 1.1984, which is ironic because the last time it traded at these levels was 1984.
Is this some sort of Orwellian Easter Egg?
The reaction on eToro was less than favorable, with about 40% of positions on the cable closing at Stop Loss. However, the big money remains bullish. By volume, only 15% of positions were closed. This shows us that the smart money is still buying the pound sterling on low leverage.
Currently the sentiment on eToro is 86% buying the cable and the average stop loss by volume is at 1.1800. I'm quite confident that if we see it approaching this level our clients are more likely to double down rather than cut losses.
Today we'll hear from BoE governor Mark Carney. Mark has previously stated that the weak pound is one of the most unsettling consequences of Brexit. Oh when, oh when Mr. Carney will you fight back against the bears? How low will we need to go until we hear you utter the magic words "interest rates" and make the sterling fly?
Market Overview
At the moment, we're seeing a mild 'risk off' sentiment in the markets. This is defined by the higher stronger Japanese yen, the gaining US dollar, and Swiss franc.
Gold and Bitcoin both seem to be stabilizing at the moment. We can see that despite a few minor setbacks, gold has been on a clear upward trajectory since Christmas.
Bitcoin has found support just below $800 a coin and is now making some modest gains.
The stock indices around the globe are mixed. Investors are really drilling down by sector and region to gauge the performance, but we're lacking any type of clear direction ahead of the two key events that are about to define the next decade. Really, what's happening is we're ranging at the top ready to break out or crash depending how this week goes, so no pressure.
Martin Luther King Day
Today Americans will celebrate the birth of one of their strongest ever civil rights proponents. Perhaps a bit ironic that many will remember the man who said "I have a dream" by sleeping in.
Many markets will be closed for the afternoon and the ones that will be trading will experience reduced liquidity.
Disclaimer: This content is for information and educational purposes only and should not be considered investment advice or an investment recommendation. Past performance is not an indication of future results. All trading carries risk. Only risk capital you're prepared to lose.