Risk on Risk off London Session 140916

1. Yesterday we saw the Vix dropping at the start of the London session though continued risk off sentiment during the day saw Yen strength and commodity weakness. We also saw increased volatility as indicated by the Vix hourly chart below.
2. I have noticed some reversal patterns starting to form on the Ftse, Dax and Nikkei though we will see if these are confirmed during the London session – should they be confirmed we should see a change in risk sentiment in the market
3. I have also noticed some interesting price action on Gold and Oil as illustrated below. Could we see some dollar weakness heading into next week? We will see how they play out during the London session. Keep an eye on oil inventories today.
3. Should risk sentiment follow on from yesterday then we should look for weak commodities and strong Yen
4. Should we start seeing risk on coming back to the market and those patterns on the indices hold then we should keep an eye out on our commodity currencies as they could indicate a change in trend. Is it possible the market has now rebalanced according to the ECB last week and are ready to go into next week’s FOMC meeting?
5. Write your trade plans inline with risk sentiment and trade accordingly

Note:
a. Please read Kate’s post on Forex Major Currencies Outlook everyday so you are up to date with the latest news. You can follow Kate here
b. Please be aware of risk events for the day by using the Forex.Today calendar
c. Watch Wayne’s webinar daily at 13:30 SAST or catch the recording on the Forex.Today Youtube Channel

Vix Daily

Ftse

Dax

Nikkei

Oil

Gold