Trump Impeachment Vote

Asian Equities Retreat on President Trump Impeachment Vote

Asian indices finished lower the day after the U.S. House of Representatives voted to impeach President Trump for abuse of power. Senate which is controlled by Republicans also needs to vote the impeachment.

The Nikkei 225 index ended 0.29% lower at 23,864 after the Bank of Japan kept its interest rates unchanged as expected by markets. The votes were 7-2 to keep short-term interest rates at -0.1% and long-term rates at around 0%. The BoJ downgraded its view on industrial production and saw overseas risks as significant.

The Hang Seng index is 0.37% lower at 27,781. The Singapore FTSE Straits Times benchmark is 0.09% lower at 3,206 while the Shanghai Composite is 0.02% lower at 3,016. The ASX 200 finished 0.27% lower at 6,833 despite strong jobs report.  

European indices started the session mixed, DAX is 0.19% lower at 13,196, the CAC40 is 0.01 per cent lower at 5,959 while the FTSE MIB in Milan is 0.02 per cent higher at 23,633. In London, FTSE 100 is 0.08% higher at 7,546 as the GBPUSD trades lower at 1.3092. A new front of concern for European traders is the tariffs that the U.S. might increase to European products. Trade Representative Lighthizer said yesterday that the U.S. might increase tariffs on European imports as it tries to shrink its trade deficit with the EU. 

In commodities markets, crude oil trades 0.08 per cent higher at $60.90 close to two-month highs after OPEC+ agreed to reduce oil output by 500,000 barrels per day until June. The API report showed an increase of 4.7 mbpd above the expectations of 1.28 mbpd.

Brent oil is trading 0.17% higher at $65.34 per barrel on improved global growth prospects. Gold prices trade 0.04% higher at 1,475, on renewed Brexit worries. The short term momentum is neutral after the gold prices trade above the 20-day MA and below the 50 and 100-day MA. On the upside, significant resistance stands at 1,555.13 YTD high while support is at 1,448 the recent low.       

In crypto markets, BTCUSD made an impressive rebound yesterday from the lows around 6,400 and returned above the $7,000 mark,  now it trades at $7,141 hitting the daily low at $7,114 and the daily high at $7,372. Bitcoin momentum is still bearish as the cryptocurrency trades below the 100 and 200-day MA. First support for BTCUSD stands now at $6,400 recent low, while the next support holds at 6,000 round figure.

On the other side, resistance stands at 9,925 high and then at 10,000 round figure. ETHUSD also trades higher today at 126.64 with capitalization now at 14.02 billion, on the upside resistance for Ethereum stands at 200 recent high while the support stands at 117.09 daily low, Litecoin (LTCUSD) is trading higher at 39.24. The crypto market capitalization has dropped at $190.07 billion.

AUDUSD Daily Chart

In the Lookout: The Australia Unemployment Rate came in at 5.2%, below market expectations of 5.3% in November. The Employment Change came in at 39.9K betaing forecasts of 14K. The Participation Rate came in at 66% in line with estimates. 

The New Zealand Gross Domestic Product (QoQ) came in at 0.7%, above expectations of 0.6% in 3Q, the yearly Gross Domestic Product came in at 2.3%, below forecasts of 2.4%. New Zealand Trade Balance came in at $-753M below estimates of $-0.875M in November. 

The central bank of China (PBOC) set the Yuan reference exchange rate (USDCNH) at 7.0025 versus yesterday’s settlement at 6.9969.


Trading Perspective: In forex markets, the US dollar index trades 0.11 per cent lower at 97.31, the Aussie dollar trades 0.25 per cent higher at 0.6870 after the strong jobs data. NZDUSD trades 0.07% lower at 0.6583 on better-than-expected 3Q economic growth data. USDCHF is 0.03% lower at 0.9807.

GBPUSD trades 0.08% lower at 1.3087  as we are getting closer to the Brexit deadline on January 31st, 2020. First support for the pound against the dollar now stands at 1.2578 low which if broken, might push the pair further down towards 1.20. On the upside, the first resistance will be met at 1.3511 recent high.

Impeach President Trump
GBPUSD Daily Chart

EURUSD trades 0.16% higher at 1.1132 as the pair’s momentum has turned positive for the short term. The first resistance for the eurodollar stands at 1.1199 recent high. On the other hand, the first support is at 1.1111 today’s low and then at 1.11.

USDJPY is trading 0.02% higher at 109.56 in just 20 pips narrow trading range, having hit the daily low at 109.49 and the daily high at 109.68. USDJPY pair will meet support at 105.44 the low from August 22nd. On the upside, resistance for the USDJPY now stands at 109.69 recent top.

USDCAD is trading 0.02% higher at 1.3116, the pair will meet support at 1.3017 the yearly low while the next support stands at 1.30 round figure. On the upside, resistance will be met at the 1.3355 the top from September 3rd before a move up to 1.3450 high from 31st May.