https://youtu.be/tYxQgRGHcjI
How the MT5 Currency Matrix Reveals Market Sentiment
The MT5 currency matrix reveals market sentiment clearly. It displays relational strength across all major pairs. A heatmap format ranks currencies visually. Strong ones appear in green. Weak ones show in red. This exposes overall mood instantly.
In this video which comes towards the end of the London session and the start of the US session, we highlight how the currency matrix helps to identify the universal sentiment to the Canadian dollar. In this example, the USD dollar has been strongly bullish before reversing to bearish, and coupled with very strong buying of the Canadian dollar, which is shown on the currency strength indicator.
On the currency matrix we then isolate our the Canadian dollar which confirms that sentiment across the CAD complex is universal. In other words, the CAD is being bought against all other primary currencies and as revealed on the 10 minute ranking ladder with the 20 minute timeframe starting to develop...
VIX Continues to Drift Ever Lower
The VIX continues to drift ever lower. This signals calm markets. Low readings reflect investor complacency. Expected volatility in the S&P 500 stays subdued. Traders interpret this as risk-on sentiment.
What Is the VIX and How Does It Work
The VIX, or CBOE Volatility Index, is known as the "fear gauge". It measures implied volatility from S&P 500 options prices. Calculations look 30 days ahead. High VIX shows fear and uncertainty. Low VIX indicates confidence and stability.
Volatility Indicator as a Sentiment Indicator
A drifting lower VIX displays bullish market sentiment. Investors feel safe buying equities. Safe-haven currencies like yen weaken. And volume price analysis (VPA) complements this—low volatility often aligns with steady uptrends and rising volume.
Trading Implications
Low VIX can precede tops if complacency peaks. Watch for sudden spikes as reversals. Quantum indicators on NinjaTrader or TradingView track VIX alongside equities. Anna Coulling's VPA approach uses it for intermarket context.
Monitor the VIX drift carefully. It reveals sentiment shifts early....
Cable continues to remain very weak for the time being, and is now approaching the tipping point of a potential deeper move once we have a strong close below the psychological 1.50 price point, which is clearly marked on the weekly chart by the support and resistance indicator.
At the same time the VPOC (volume point of control) is also weighing heavily on the pair, and should the above level be breached then a further cluster of support awaits below in the 1.48 region. Any failure here will see cable move into a low volume node in the 1.46 region, last seen in March this year from which cable managed to stage a sustained recovery.
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Aussie Finding Some Bullish Momentum
The Aussie is finding some bullish momentum recently. AUD pairs push higher. This reflects renewed buying interest. Commodity links and risk sentiment support the move. Traders spot opportunities in AUD crosses.
Of the three commodity dollars, namely the Aussie, Kiwi and Loonie it is perhaps the Aussie which finally appears to be showing signs of a potential reversal from its oversold state on the slower time frames of our currency strength indicatort (the blue line). And of the Aussie pairs it is perhaps the AUD/USD and AUD/CAD which appear the most interesting.
Starting With AUD/USD
Starting with the AUD/USD it was the failure in May to break through the resistance at 0.8160 which was the start of the its downards descent which saw the pair finally find some support at 0.6906 on the Friday before the Labor Day Holiday in the US. And whilst this level was tested once again last Monday, since then the AUD/USD has managed to...
Bears Take Hold of Cable
Bears take hold of cable in recent sessions. GBP/USD falls sharply. Selling pressure dominates. This creates strong downside momentum. Traders spot short opportunities in the pound against dollar.
Today's reversal in cable has once again taken the pair back to the VPOC (volume point of control) support which sits in the 1.5573 price region. This price area is where cable has been rotating since early July, and despite what appeared to be a decisive break away on Monday when cable touched a high of 1.5803, yesterday's down candle has had the effect of creating a classic two bar reversal. Therefore, no surprise to see the resulting fall in today's trading session where cable has fallen over 200 pips.
Today's price action has not only taken cable below the VPOC for the first time since early August but also seen a break through the 100 ma, and with today's move supported with good volume the next stop for cable...
Eurodollar Bears Take Control
Eurodollar bears take control in recent sessions. Selling pressure dominates EUR/USD. Price pushes lower with conviction. This signals short-term bearish sentiment. Traders watch for continuation.
Although the market is focused on tomorrow's release of the FOMC minutes, an event guaranteed to cause a degree of market volatility, it is the release of the CPI and Core CPI numbers earlier in the session which are probably even more important. Of the two releases it is the Core CPI the FED pays the most attention to, and a big influence on the likely timing of any rise in interest rates.
Meantime, the USD appears to have found its mojo once again following last week's dramatic fall, with the eurodollar bearing the brunt of this resurgence.
Daily Chart For Eurodollar
The daily chart for the eurodollar is particularly interesting where weakness for the pair started last week with the failure to break and hold above the VPOC (volume point of control) in the 1.1167...
CSI Highlights GBP Sell Off
The Currency Strength Indicator (CSI) highlights GBP sell off clearly. It ranks currencies by relative performance. GBP drops sharply in rankings. This signals heavy selling pressure. Traders see weakness early.
Ahead of the release of the Monetary Policy Minutes from the RBA, and tomorrow's CPI number for the UK, it's been interesting to see how the Aussie and British pound have been behaving in today's trading session. And of the two currencies it has been the British pound which has seen some heavy selling against both the USD and the Aussie.
The hourly chart of the CSI (currency strength indicator) highlighted the extent to which the British pound was overbought, and Cable's failure to take out the resistance at 1.5688 signaled the start of a reversal in fortune for the pair and a move lower of over 100 pips. And it has only been a combination of the VPOC at 1.5585 and support at 1.5578 that has prevented...
NZD/USD Rebounds Following PBOC
NZD/USD rebounds following PBOC actions. People's Bank of China stimulus often boosts risk sentiment. This supports commodity currencies like NZD. The rebound shows renewed buying pressure against USD.
Perhaps, not surprisingly, it has been the Aussie and Kiwi which have responded the most to the PBOC (People's Bank of China) move to devalue the yuan, with the AUD/USD completely erasing last Friday's and Monday's gains to end yesterday's trading session just over the key 0.73 level. Further falls overnight has seen the pair tumble to 0.7224 since when it has staged a remarkable comeback in the London session to trade (at time of writing) at 0.7330. The move off the session lows has also co-incided with our last VPOC supoort line on both the daily and weekly charts. On the daily chart the first target for AUD/USD is the VPOC resistance at 0.7395, followed by further resistance at 0.7438, and yesterday's high.
However, the extent of the comeback for...
In all the brouhaha about Greece and the euro it's easy to forget what else is going on in the forex market. Sometimes I feel Greece is taking up too much space in traders' heads at the expense of other markets and currencies. And for a perfect example of what I mean look no further than the continued strength in GBP which has seen some great trends in GBP/NZD & GBP/CAD & I'm still waiting for the GBP/JPY to turn lower, but only once we see a major reversal in risk sentiment.
On both charts the NinjaTrader trend monitor has remained firmly bullish with only a minor transition on the GBP/CAD reflecting the recent pause in the longer term trend. However, moving to the NinjaTrader currency strength indicator to the left of the chart, here we can see that the British Pound, the yellow line, is now moving ever deeper into the oversold region on the daily timeframe, so this trend...
We have four central banks on today's trading horizon, BOJ, RBA, BOE & later this evening we have interest rate decision, policy statement and a press conference from the RBNZ. I really must come up with a collective noun for the CB's! In between we have the Manufacturing Number for the UK where forecast is for 0.1% against a previous of 0.4%. This release can be very difficult to judge as there has been no clear trend since 2009 when the number was consistently awful. On the GBP matrix we have seen some strong buying of GBP against USD, which is not surprising given the alleged Obama comments at the G7.
However, GBP buying actually started last week after NFP. It was the deep lower wick to Friday's candle which signaled a potential reversal for cable. This was given further impetus on Monday, & the buying was cemented as yesterday's candle ended the session with an even deeper lower wick. The current daily chart...
