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Fundamental Analysis & Market Sentiment

Fundamental Analysis & Market Sentiment

Fundamental analysts are leaning in favor of the view that the recent quarter-point cut in the U.S. interest rate will be the last cut for a while, with Jerome Powell signaling there are likely to be no further cuts and maintaining an upbeat take on the U.S. economy.

The U.S. economy is still growing, but there are some fears of a pending recession. A major issue concerning sentiment on the U.S. and global economies is the trade dispute between the U.S. and China, with the U.S. using the treating of new tariffs later this month as leverage in negotiations. There is increasing hope that a deal will be signed soon which should be positive for the U.S. stock market. T the benchmark U.S. stock index, the S&P 500, ended the week not far from its all-time high price.

There are a few long-term trends in the Forex market, notably bullish trends in the GBP/USD and NZD/USD currency pairs, and a bearish trend in the EUR/GBP currency cross. I am wary of trading EUR/GBP short and prefer to trade GBP/USD long. The long-term bullish breakout made by the GBP/USD last week is driven by the fact that opinion polls are showing a strong government victory should happen in next Thursday’s election, which would resolve the Brexit impasse.

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