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Currensee Chief Market Analyst Shaun Downey has a new blog post over at Forex Magnates this week in which he compares the activity in the US stock market to the range of USD pairs in Forex.

…there is no escaping the overwhelming importance of the American stock market and its influence over the Dollars direction. It can sometimes feel like you are trading that and not the Dollar at all…

Last month, guest Forex blogger Tim Mazanec pondered a divergence between stock and Forex traders.

…US equities opened the week on a strong note … Currency traders are well versed though that EUR/USD has only partially kept pace as it continues to trade around the 1.50 level. This begs the question of whether or not we are starting to see a divergence between traders in the stock market and in the currency market?

Whichever way you think the market winds are blowing, it’s interesting to see both Tim and Shaun comparing data from Currensee’s social indicators with their technical and fundamental analysis.  As Shaun writes,

The Currensee social indicators of positioning also provide insight. Last months Unemployment number saw negative sentiment on the Dollar maintained, but this had changed dramatically by last weeks figure. Longs of Dollars against Yen and Canadian where in the 90’s%, which is particularly telling, when taking into the account the latter’s initial bearish move on a very positive Canadian jobs report. Positioning against the Euro and Pound was also positive for the Dollar.

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Be sure to read the full risk disclosure before trading Forex. Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.

Author Bio

There are two interesting discussions brewing on Currensee.com right now that started overnight as Europe woke up and looked at the numbers.  First, Shaun noted that the USD and the DJIA have been locked together lately and those who buy bucks when stocks bear have done well:

The slavish correlation between the Dow and the Dollar remains unchecked and while the Buy on Dips (Bods) are being rewarded in stocks this looks to continue. However, when looking for clues to whether stocks are making a top and by default the Dollar a low, is to look at the Bond market. Both the 10 year Note and TBonds are in a classic triangle formation…

Meanwhile, Barak notes that his Value Area Low (VAL) calculation on the EUR/USD is at a critical point:

Just wanted to point out an interesting critical point to take into consideration. VAL=1.4535 calculation from two days ago (that is the “Value Area Low” of which 70% of market activity and transactions hangs on a previous day, the upper bound of this area was [VAH=1.4600], it’s a significant area the market tend to check on the move from one day to another)…

The discussion goes from there with lots of good info on the Value Area method and associated triggers, while folks following Shaun’s chart are sticking with their stock market triggers.

Join the discussion and follow Barak and Shaun’s trades on Currensee.com!

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Be sure to read the full risk disclosure before trading Forex.  Please note that Forex trading involves significant risk of loss. It is not suitable for all investors and you should make sure you understand the risks involved before trading. Performance, strategies and charts shown are not necessarily predictive of any particular result. And, as always, past performance is no indication of future results.