Forex Today: S&P 500 Index, Euro, British Pound Retreat from Highs

Risky assets reach new long-term highs against the US Dollar but pull back later.

1. The decline in the US Dollar in line with its long-term bearish trend continued yesterday, with several risky assets reaching new long-term highs against it:
   • The S&P 500 Index closed at a new all-time high.
   • Gold closed at a new all-time high.
   • The EUR/USD currency pair briefly traded at a new 1-year high above $1.1200 before pulling back.
   • The GBP/USD currency pair briefly traded at a new 2.5 year high above $1.3400 before pulling back.
   • The Chinese Yuan reached a new 16-month high against the USD.
2. Risk-on sentiment continues to dominate markets, but the Asian session has brought a retracement, albeit a relatively shallow one. Therefore, there is a good chance of these trends against the Dollar resuming, which could provide an opportunity to traders today.
3. In the Forex market, the Australian Dollar has been the strongest major currency since the Tokyo open today, while the Japanese Yen has been the weakest, putting the AUD/JPY currency cross in focus as a showcase of risk-on price movement. Trend traders will be keeping a close eye on the EUR/USD currency pair, which is not far from closing at a new 1-year high, which could be a good long trade entry signal.
4. The NASDAQ 100 Index is advancing firmly and is trading above 20,000 for the first time in a while, showing a recovery in technology stocks.
5. Many commodities, notably Crude Oil but also some softs, are looking much stronger with the improvement in risk sentiment over the past few days. Sugar futures closed yesterday at a new 6-month high, which is typically a good long trade entry signal, although a long trade here may be a bit premature.
6. The Swiss National Bank will be holding a policy meeting today, at which it is expected to cut its Policy Rate from 1.25% to 1.00%.
7. There will be a release of Final US GDP data today, which is expected to show unchanged annualized GDP growth of 3.0%.

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