Risk Sentiment: VIX, Gold, and US Dollar Analysis and Charts
- The VIX has slumped by nearly 32% in the last seven sessions.
- US Dollar remains ahead of the FOMC decision and NFP report.
- Gold slipping lower as negative technical pattern begins to play out.
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Most Read: Markets Week Ahead, FOMC, Apple, Amazon, USD/JPY, Gold and USD Outlooks
Risk markets are looking to push ahead in early turnover after a marginally positive session in the US and Asia. The VIX is touching a near three-week low and has fallen by nearly a third from the Friday 19th multi-month high. The Israel-Iran crisis is, for now, not dominating market headlines or thinking, boosting risk assets, while gold continues to nudge lower. Ahead, the latest FOMC decision and chair Powell’s press conference, and Friday’s US Jobs Report (NFPs) are likely to stoke volatility and may turn risk sentiment around. Still, for now risk markets are happy to nudge higher.
In the equity space, Amazon (AMZN) releases its latest quarterly results after the US market close today. Recent Mag 7 earnings have produced wild, and unpredictable price swings and Amazon’s numbers must be followed closely.
What is the VIX? A Guide to the S&P Volatility Index
VIX Daily Price Chart
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The US dollar daily chart continues to build a bullish flag formation with additional support seen from the 20-day simple moving average. The FOMC decision (Wednesday) and NFP data (Friday) are key for the US dollar this week.
US Dollar Index Daily Chart
Gold is slipping and looking to break lower as a short-term bearish flag formation unfolds. The 20-day sma is now acting as resistance and continued weakness will see $2,280/oz. come under pressure.
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Gold Daily Price Chart
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IG Retail Sentiment 53.82% of traders are net-long with the ratio of traders long to short at 1.17 to 1.The number of traders net-long is 3.75% higher than yesterday and 6.05% higher from last week, while the number of traders net-short is 3.79% higher than yesterday and 6.58% higher from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests Gold prices may continue to fall.
Gold
Bearish
of clients are
net long.
of clients are
net short.
| Change in | Longs | Shorts | OI |
| Daily | 7% | -1% | 4% |
| Weekly | 36% | -26% | 3% |
Are you risk-on or risk-off ?? You can let us know via the form at the end of this piece or you can contact the author via Twitter @nickcawley1 .