How Can We Gauge Market Sentiment?

You need to study every market moving catalyst that is currently driving currency prices. You also need to understand how market expectations are changing.
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Gauge Market Sentiment

Okay, we just have a quick question here from Mike. Mike is saying that we often state that it is very important to always know what sentiment is currently driving the market. And Mike is asking how we can gauge that market sentiment. Now first of all Mike, thanks for the question.


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There are quite a few ways that you can go about doing this. I think one of the reasons why I wish that the Forex Source terminal was around when I started trading is because most of that heavy lifting is basically already done for you in the reports that we generate in the terminal.

Now we basically go through all the market information that is currently driving the market at any given time. And then from there we filter it down into the most important information, the most current market moving drivers. Now some examples of this is the daily dominant sentiment theme reports that you can find always in the Market Insights tab.

We basically do that dominant theme update for the European as well as the New York trading session. And that’ll basically highlight the key drivers for the London and the New York trading session in every particular trading day. Now we also have the daily risk event. Altered report also in the must read section.

Now this will go into a lot of detail on the upcoming events that we have in terms of the economic calendar, what events we need to watch out for, how we think they can move the markets obviously, and that could also be a key driver, in terms of market sentiment.

They will also have the video commentary that keeps us up to date with the current drivers for each of the major currencies each and every single day when we do our opening video coverage, telling you exactly what we think is driving each of the major currencies right now. And then of course for more details view we also have the sentiment drivers report updated on a daily basis as well, which basically gives you the primary drivers for each of the currencies right now as well as the future possible sentiment shift. So lots of value there in terms of pinning down exactly what is moving each currency.

Now if you want to follow the same process that we follow to basically generate these reports, make sure to check out our daily routine video that we did last week. But as a quick recap of that, there are a couple of places that you can start for basically evaluating the current drivers.

The first and best place to start of course, is in the must read section, opening up the daily Asia-Pac opening news, as well as the European opening news and then the US opening news for every session.

Now this report has a lot of details and lots of valuable information shared there on exactly what is driving the markets, not only the currency markets, but more importantly, what is driving things like equities, what is driving things like commodities, what’s driving the bond market. All of that obviously plays a huge role in the overall sentiment.

So also a very important report to start with. It’s really something that I start with each and every single trading session, don’t really start trading without going through that report. Then the next step that you can do apart from obviously reading that, as you could also consider reading the news events or news reports that comes out on a terminal like Zenith, if I just quickly give you a quick example of that. You can see I basically go through the FX news, the global market news and the commodity news on a daily basis.

There’s also other free sites that you can all obviously use. You can go to Reuters, from Reuters, lots of lots of valuable information there. A lot of articles that you can read up on exactly what is driving the markets. Another one that isn’t really free anymore, but also very valuable also and I use on a daily basis is Bloomberg. Bloomberg has great articles in terms of the current drivers. And then of course, apart from all of these, you can also do research on the investment bank. From the investment banks, a lot of them has daily notes will be daily updates that’ll tell you exactly on a daily basis what they think is driving the markets.

So that is just a quick take on exactly what we do, how we find that sentiment drivers. And if there’s any other questions, make sure to please let us know.




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