Today’s Key Market Drivers: 27th July 2018

“Facebook breaks stock market record.”

Please join me today for Friday Live at 2.00pm AEST in the FX Trading Room when I will be introducing a small filter to the price rejection trades that I believe will help eliminate some stop outs during times of sideways market activity. I have been going over my charts for a number of days and have something to share with you that I genuinely believe will make a difference moving forward.

The European Central Bank confirmed on Thursday that it would leave the official cash rate unchanged and again confirmed that it would begin winding back it’s current stimulus program in September concluding the program for good in December. The ECB also confirmed that it would not consider raising the official cash rate until the summer of 2019. Traders have previously heard a similar statement from Mario Draghi so his confirmation on Thursday about when the stimulus program would end was nothing new and thus gave the market no reason to buy back into the Euro. There was simply nothing exciting and new from the European Central Banks Governing Council and this morning the Euro is lower against the US Dollar moving into Wave 5 on the daily chart.

I have to share this comment with you today because I think it sums up the thoughts of most market participants. Gavekal strategist said in a note to their clients. “The one thing we have learned from the last 18 months of Trumps gyrating trade policies is that whatever looks certain today is likely to be undermined tomorrow.

The Aussie and Kiwi Dollars both fell back lower through the European and US trading sessions on Thursday and I note this morning that Reuters is reporting that traders have increased their short positions on emerging market currencies which include the Aussie and Kiwi Dollars. What also weighed on both currencies on Thursday was the slide in the value of the Chinese currency which again fell against the US Dollar. Since Trump decided to ramp up his trade tariffs the Yuan has continued to decline in value and this is a sign that any trade tensions are likely going to be US Dollar positive.

As we head into the last trading day of the week the Euro remains under pressure and its decline against the US Dollar may be exacerbated today with the release of the latest US GDP figures. The same can be said for the AUD and NZD and if today’s GDP figures beat economist’s expectations of 2.3% annualised for the second quarter the US Dollar will likely continue to rise continuing to push down the AUD, NZD and Euro.

Yesterday I mentioned the stock price of Facebook had fallen 20% after it missed earnings and growth estimates on Wednesday. CNBC is reporting this morning that Facebook’s slide in its stock price is the biggest one-day loss in stock market history. “No company in the history of the U.S. stock market has ever lost $100 billion in market value in just one day.” I like Facebook and it also owns Instagram and WhatsApp and I will be that in 12 months time the share price is back above where it was a few days ago. Social Media has only just gotten started and Facebook is the Coca-Cola of the Social Media space and will always be #1.

Any trade updates throughout the day will be sent via Trade Time. You can also follow my daily updates on Facebook, Twitter, Instagram by searching for TrainwithAndrew. Make sure you subscribe to the Andrew Barnett YouTube channel after watching today’s Sunrise video below.

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About the Author: Andrew Barnett

Andrew is a professional trader and successful investor who has a strong focus on education. He is a regular Sky News Money Channel Guest and one of Australia’s most awarded and respected financial experts and is regularly contacted by the Australian Media for the latest on what is happening with the Australian Dollar. Director at LTG GoldRock, Andrew Barnett, guides thousands of traders around the world in the live market on a daily basis, advising them on buy and sell directions, as well as trading his own personal account. Andrew, a regular keynote speaker at trading and wealth-creation events throughout the Asia Pacific region, is an authorized representative registered with the Australian Securities and Investment Commission (ASIC).

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