Breaking News

Risk assets may be on the rise, but it is more due to a pause in risk off as opposed to buyers rushing back in. Still, it could still allow for some bullish wriggle room on AUD/USD and bitcoin if sentiment allows.

After starting the day well in the green, the major US indices were coming under a bit of pressure again at the time of writing, with investors unable to shake off the recent turmoil impacting financial markets. For now, the Nasdaq 100 forecast remains mildly bearish after the recent breakdown. More evidence of a bottom is needed to excite the bulls again even if there is a sense of calmness observed in price action over the past two days or so.

The absence of new bearish news and a light economic calendar have helped improve risk appetite somewhat. While not completely out of the woods, the market's realignment with fundamentals offers a more optimistic outlook. Stay tuned for further updates as the DAX tries to establish a base around its 200-day average.

The spotlight is on the USD/JPY and other yen crosses right now, with a particular focus on the ongoing unwind of carry trades that continues to make waves across financial markets.

Market turbulence often presents lots of opportunities, but there is still excess froth to be shed as the unwinding of leveraged carry trades persists for now. For now, the greenback has rebounded, helped in part by the stronger ISM services PMI. Still, in light of the recent events and expectations of a sharper pivot by the Fed than was previously expected, the EUR/USD outlook remains mildly positive.

Market reactions over the past 24 hours have been well covered. But the VIX is worthy of a closer look, given it just posted its strongest single-day rally on record.

An upside surprise on ISM services helped slow the bleeding on US stock markets and AUD/USD erase heavy losses ahead of todays RBA meeting. Nikkei futures rose 6% after its 12% plunge, which brings hopes for a bounce on the ASX 200 today.

The EUR/USD earlier was up at 1.10 to test its best levels since January, before dipping on the back of the ISM data. Still, in light of the big drop in the dollar index and expectations of a sharp pivot by the Fed, the EUR/USD forecast will remain positive.