We enter a new week of trading with US equities charging higher following a late rally on Friday, Gold trying to hold above the $1,800.00 mark, the Pound still an out performer in the currency space, while the USD and Yen keep heading in opposite directions.

We’ve gone through a setback in risk sentiment as depicted by the out performance of the Yen and the US Dollar across the board, closely followed by the mighty Pound (judging by this week’s results), while the Aussie, the Euro and the Canadian Dollar were the main laggards as a wave of selling hit the S&P 500 early doors in the US.

What stood out through a Wednesday session vacant of market-moving fundamental news was the continuous fragility of the US Dollar, by far the worst performer, while on the other side of the spectrum, Gold added over 0.8% and convincingly broke $1,800.00.

The main take-away from Tuesday’s price action was an explosion in the price of Gold, hitting its highest level since 2011, alongside the eruption in buy-side flows in the Sterling amid speculation of a revival in Brexit talks, all in the context of a very weak Canadian Dollar and faltering US equities, unable to keep up the momentum but still bullish.

The underlying risk appetite phase we’ve transitioned into flared up on Monday, this time assisted from the early hours in Asia by the euphoria to keep buying Chinese stocks in mass, where the Shanghai Composite index soared over 5% to a 2-year high, driving global risk sentiment higher as financial markets remain oblivious to COVID-19 resurgence.

Today marks the beginning of Global Prime’s first ever monthly trading competition, this time only in Demo accounts.  In this article, I’d like to list a series of thoughts that would make your experience as part of this competition a meaningful one and hopefully you won’t fall victim of the common pitfalls.

The markets are slowly returning to life after a lukewarm ending last Friday ahead of July 4th Independence day in the US. The Forex market is expressing ‘risk on’ flows at the open in Asia while equities remain underpinned overall. These punchy in Asia are in line with the premise I’ve been promoting of a re-alignment in forex trends.

The main take away from the last 24h of price action is that equities and currencies, despite the latter still moving at a slow pace, are still very much in-sync signaling that we are slowly but steadily morphing into a stage of more protracted ‘risk-on’ conditions in the marketplace. 

The follow through in risk sentiment came to fruition and with it a fresh record high in the Nasdaq index, the S&P 500 sealing its bullish outlook as structure and momentum re-align, while the Pound and the Kiwi continue to be the darlings of FX this week.

The quarter that was ended on a bang for equities with the S&P 500 printing 1.54% gains for the day and 19.95% for the quarter. Gold, the Pound and commodity-linked currencies, in this order, had a stellar performance, while the US Dollar, Yen and Euro succumbed.