Market sentiment analysis:
- Trader confidence remains high, with the safe-haven US Dollar dropping but stocks still at or near their record highs.
- Moreover IG client sentiment data suggest further losses ahead for USD.
Trader confidence still positive
Traders continue to buy into riskier assets like stocks as comments from central bank officials point to a lack of concern about inflation despite a global economic recovery, suggesting interest rates will remain low for the foreseeable future.
While stocks rise, losses for the safe-haven USD persist and IG client positioning data point to further weakness ahead for the Greenback.
US Dollar Index Price Chart, Four-Hour Timeframe (March 26 – May 25, 2021)
Chart by IG (You can click on it for a larger image)
The expected weakness of the US Dollar can be seen, for example, in a bullish signal for EUR/USD.
| Change in | Longs | Shorts | OI |
| Daily | -8% | -2% | -6% |
| Weekly | -12% | 9% | -4% |
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 this week, at the IG Client Sentiment page on the DailyFX website, and at the IG Client Sentiment reports that accompany it.
--- Written by Martin Essex, Analyst and Editor
Feel free to contact me on Twitter @MartinSEssex
