Daily Forex & Energy Market Sentiment (2015.07.28)

Time of the market sentiment analysis – 0500 GMT.

1.FOREX

By the beginning of the trading day of July 28, 2015 we had the following technical picture in the FOREX market:

according to the market participants’ power balance chart, the Forex Majors segment is dominated by neutral-bearish sentiment at the moment. This can be seen from the general distribution of forces (the first column on the left):

2015JUL28 Forex Majors Market Sentiment

Forex Market Sentiment

 

 

 

 

 

 

 

 

  • the non USD bulls share stands at 14.3% level
  • the share of neutral market participants stands at 44.4% level
  • the non USD bears share stands at 41.3% level

As for the long-term trends, the balance of power here indicates that the market is still dominated by bearish sentiment. At the moment, slightly more than half of market participants have joined the bears’ camp (57%), one third of the market belongs to neutral market participants (33%), the share of bulls is insignificant (10%).

In the medium term, the market is developing exactly the same situation as in the long timeframes.

On the short time intervals the market is dominated by strong neutral sentiment. At the moment, slightly more than two-thirds of market players are in the category of observers (67%), about one quarter of the market is under control of bulls (24%), the share of bears is insignificant (10%).

From the technical point of view, the US dollar index continues to consolidate in a price range of 93.00 – 98.00, which emerged after a long-term uptrend. During the last week the market made an attempt to test the upper boundary of the range, but it was uable to break through it.

During yesterday’s trading the downward movement continued and the US dollar index fell 0.76% to reach session low at 96.36 level. As a result, a bearish candle with medium-sized body and short shadows has formed on the daily chart.

Judging by the sum of signals of three trading strategies that we use, at the moment the share of bulls in the USD Index stands at 11%, the shares of neutral market participants and bears make up for 44.5% each. Today we expect a mixed price dynamics in the USD index. In our opinion, today it is better to refrain from taking active steps in buying or selling the US dollar against other major currencies.

Today the  AUD and CAD seem to be the weakest currencies against the US dollar (first column on the right).

As for the cross rates, here we would like to draw your attention to the fact that today the AUD is quite weak against most major currencies. Judging by the sum of signals of three trading strategies that we use, at the moment the share of bears in the AUD has reached 71.4% level. In this regard, today, we recommend looking for opportunities to sell AUD against other major currencies with a good P/L ratio. Turning to the balance of power chart for AUD cross rates, we will see the following picture:

2015JUL28 AUD Crosses Market Sentiment

Forex Market Sentiment

 

 

 

 

 

 

 

 

On the other hand, it should be noted that today the EUR looks quite strong against most other major currencies. Judging by the sum of signals of three trading strategies that we use, at the moment the share of bulls in the EUR has reached 65.1% level. In this regard, today, we recommend looking for opportunities to buy EUR against other currencies with a good P/L ratio. Turning to the balance of power chart for EUR cross rates, we will see the following picture:

2015JUL28 EUR Crosses Market Sentiment

Forex Market Sentiment

 

 

 

 

 

 

 

 

Among the most important events and economic reports published or scheduled for publication today first of all it is worth mentioning the publication of a statistical report on the rate of growth of british economy. UK Office for National Statistics predicts the growth of the national economy during the second quarter of 2015 at 0.7%. Experts believe that strong numbers could speed up the decision of the BOE to raise the key interest rate in the future.

Also today, during the US trading session a report on the state of consumer confidence in the United States is expected. Financial confidence is a leading indicator of consumer spending, which accounts for a majority of overall economic activity in US.

Among the most important events that occurred in the market yesterday, first of all it is worth noting the publication of German Ifo Business Climate survey results. German business climate index, based on a monthly survey of some 7,000 firms, rose to 108.0 from a revised 107.5 in June, beating the consensus for a reading of 107.2. Experts attribute the improved business sentiment in Germany with the achievement of an agreement between Greece and its creditors.

Yesterday in the US was published a fairly strong report on orders for durable goods in June. According to the report, the total number of orders increased by 3.4%, which was above the forecast and the last month’s values. Experts attribute the growth rate with an increase in orders for aircraft, mostly coming from Boeing.  If not taking  into account the volatile components of the index, the reading grew by 0.8%, which is still two times higher than the forecast value. This is the highest increase in the numer of orders since August last year.

2.Energy Market

Please find Bulls and Bears Power Balance Chart for Energy Market below:

2015JUL28 Energy market

Energy Market Sentiment