European bourses have dropped sharply on the open, as casualties from the selloff in equities mount up. Taking the lead from the US, where the Dow Jones recorded the biggest point fall in a single trading session of 1,175 points of 4.6% overnight, the FTSE and the DAX opened over 2.5% lower, although are quickly paring losses. 

Whilst there was no single event which prompted Monday’s sell off, fears over rising interest rates dampening economic growth and the fact that the market is long due a correction, have been weighing on sentiment. The first signs falling confidence and investors have been surprisingly quick to sell out and book profits from the phenomenal rally over the past few months. 

The last two sessions have seen the Dow wipe out 8.5%, all of the gains from January. Corrections are considered a healthy part of market dynamics; however, the size of this correction and the speed of the selloff have certainly served as a cautionary reminder to investors that the market doesn’t just go up in a straight line, which is pretty much what it has been doing in this latest stage of the bull market. 

Selloff stabilising 

Moving through the morning and the bloodbath appears to be stabilising, with indices across Europe showing signs of trying to move higher. US futures are in fact pointing to a mixed start in the US this afternoon, with the Dow Jones and the S&P still clearly in negative territory, although the Nasdaq in pushing back into positive ground. 

Traders are not panicking, the speed of the selloff implies that it won’t be able to hold out for an extended period of time. Whilst few have proved willing to catch a falling knife, on confirmed signs of a turnaround, investors could start to see this an epic buying opportunity; fundamentals are still strong. 

GBP/USD remains sub $1.40 

Despite the weaker dollar, GBP/USD has not been able to move back above $1.40. A triple whammy of weak PMI data and Brexit concerns mean any advance in the pound has been tentative. 

With no high impacting data on the UK economic calendar today, investors will turn their attention to the US for the trade balance and JOLTS jobs openings. Bitcoin below $6000 Equities haven’t been the only assets to plummet in recent sessions. Bitcoin continued to tumble on Tuesday, briefly breaking below $6000, its lowest level since mid-November. 

Bitcoin has now lost over 50% of its value so far this year, with the latest bout of selling coming amid increased concerns over increased regulation, hackers and potentially price manipulation. The bubble here seems to have burst, the question now is how low will it go?

CFD and forex trading are leveraged products and can result in losses that exceed your deposits. They may not be suitable for everyone. Ensure you fully understand the risks. From time to time, City Index Limited’s (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material. As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed

Analysis feed

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Analysis

Latest Forex Analysis

Editors’ Picks

EUR/USD extends losses toward 1.1250 amid coronavirus concerns

EUR/USD is trading closer to 1.1250 as concerns about US coronavirus cases are growing. Eurozone finance ministers are meeting ahead of next week's summit.  US PPI and updated COVID-19 statistics are awaited.


GBP/USD pressured under 1.26 amid risk-off mood, Brexit uncertainty

GBP/USD is trading below 1.26, off the highs. Rising US coronavirus cases are pushing markets lower and the safe-haven dollar higher. Concerns about Brexit and the UK refusal to participate in the EU coronavirus vaccine scheme are weighing on sterling. 


Gold: Well-defined battle lines point to range play around $1800

Gold nurses losses around the $1800 following Thursday’s good two-way businesses. The risk-off theme amid COVID-19 concerns continues to bode well for the US dollar. 

Gold News

Canada Net Change in Employment June Preview: June is looking better and better

Job gains expected to more than double in June. Unemployment rate to drop to 12% from 13.7 in May. Ivey PMI was twice its forecast in June, highest since Nov 2019. USD/CAD would benefit from better June job figures.

Read more

WTI extends Thursday’s drop as virus cases rise

Oil extends overnight sell-off as virus concerns dominate the market sentiment. The resurgence of virus cases in the US has fueled lockdown fears. The US on Thursday registered 65,551 new cases, a record for a 24-hour period.

Oil News

Forex Majors