Any time markets are volatile, traders look to perceived “leaders” to tell them everything is going to be alright (see the popularity of CNBC’s recent “Markets in Turmoil” specials), and today’s missionary du jour took on that mantle willingly.
It was another disappointing week for risk asset bulls. After showing signs of stabilizing early in the week, global stocks (led by Chinese equities) dropped off the map on Friday as concerns about the oil market once again spooked traders.
Earlier today, my colleague Fawad Razaqzada discussed the Nikkei 225 and whether Japan’s most widely-followed stock market index was forming a double bottom or merely seeing an oversold bounce. While the correlation is not perfect (no intermarket correlation is!) that bourse and many other equity indices are closely correlated with USD/JPY.
During the last week or so, we’ve reset the longer-term outlooks for a number of major currency pairs and markets, but now we wanted to take a look at the key short-term levels to watch on the world’s most widely-traded currency pair, EUR/USD.