Trading the Sterling and Stock Meltdown with Price Action

Forex Trading News & Analysis • Jan 19, 2016 at 5:15 PM EST

Equity markets are showing no sign of receding from pain; and with so much aggressive selling taking place, traders still need to actively look for risk-efficient entries.

Video length: 00:49:06

The open after an extended holiday-weekend in the United States did not bring a respite to the risk-off rallies that have plagued markets since the start of the New Year. Before traders in New York hit their desk to start the week, we already had another negative report out of China. This time it was GDP, as Chinese Q4 Gross Domestic Product printed at an annualized 6.8% print. This continued the trend when last quarter’s GDP came just shy of the 7% target for China, with a 6.9% print.

This speaks to the fear of a bigger slowdown in Asia. And as we can see on the GDP chart below, the question of whether or not China is slowing down isn’t really up for debate; that’s happening. The bigger question is how aggressively this slowdown is hitting, and perhaps more to the point – how much impact the rest of the global economy might feel from it.

Trading the Sterling and Stock Meltdown with Price Action

Chart prepared by James Stanley; data derived from China NBS: National Data- GDP

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