Heading South

Asian Indices Down, NZDUSD at Three Month Top

Asian stocks finished lower today as comments yesterday from Chinese Foreign Minister Geng Shuang stated that US President Donald Trump is misleading people when it comes to trade deals, dampening the mood. The Nikkei225 ended 1.97 percent lower at 21,046; the Hang Seng finished 0.62 percent lower at 28,414. The Shanghai Composite ended 1.04 percent lower to 2,901, while in Singapore, the FTSE Straits Times index finished 0.39 percent lower to 3,351. Australian equities dropped 0.40 percent to 6649.3 after the Aussie jobless rate remained steady at 5.2% as expected by analysts’ only 500 jobs were created over the month, missing expectations for an increase of about 9,000.

European equities started the day negative, DAX30 is giving up 0.53 percent to 12,279, CAC40 is 0.29 percent lower at 5,555 while the FTSE MIB in Milan is trading 0.04 percent higher at 22,068. The London Stock Exchange is 0,36 percent lower to 7,508 amid non-deal Brexit worries.


In commodities markets, crude oil trades 0.05 percent higher at $56.59 as traders turn cautious on recent highs. Brent oil finished yesterday 1.07% higher at $63,66 per barrel despite major oil producers have agreed to cut output. Gold trades higher at 1,420, keeping the bullish momentum as the price holds above all the major daily moving averages. On the upside, strong resistance will be met at 1,427 the daily high and then at 1,437 recent high.      

In cryptocurrencies market, after comments from President Trump that he didn’t like bitcoin and other cryptocurrencies last Friday, bitcoin (BTCUSD) rebounds from recent lows to 9,785, hitting the daily low at 9,565 and the daily high at 10,022. Immediate support for BTC stands now at $9,205 yesterday’s low while next support holds at 9,000. On the upside, strong resistance now stands at 13,138 recent high and then at 13,500 round figure. Ethereum (ETHUSD) is adding over 13 dollars and trades at 214 with capitalization now to 23.2 billion. On the upside, the immediate resistance stands at 317, Friday’s high, while the support stands at 200, the 100-day moving average. Litecoin (LTCUSD) also trades higher, adding over 10 dollars at 91.72. The crypto market cap now stands above $268.3 billion.

On the Lookout: The Bank of Korea earlier today cut its policy rate by 25 basis points to 1.50%, for the first-rate cut since 2016 and marks the shift in direction from the rate hike initiated cycle in November 2018.

In Japan, the Merchandise Trade Balance Total came in at ¥589.5B beating expectations of ¥420B in June. 

Yesterday the Fitch Ratings agency affirmed Japan’s Long-Term Foreign-Currency Issuer Default Rating at ‘A’ with a stable outlook. The Australia Westpac Leading Index, month over month, declined to -0.1% in June from the previous reading of -0.08%. The Westpac Leading Index, month over month, came in at -0.08% for June.

In the US trading session, we have the weekly jobless claims data due at 12:30GMT that as always will receive attention given the importance of the labor market to the FOMC. Philadelphia Fed Manufacturing Index will also be released along with Philadelphia Fed Employment and Philadelphia Fed Business Conditions. The Leading Economic Index, month over month, will be released at 14:00GMT while the EIA Natural Gas Storage Change is due at 14:30GMT.

Trading Perspective: In forex markets, USD trades 0.13 percent lower at 97.05, the Aussie dollar trades 0.33 percent higher at 0.7035, while Kiwi trades at three months high at 0.6734.

NZDUSD Daily Chart

GBPUSD trading higher today after stronger retail sales data at 1.2480 area.  Major support now stands at 1.2381 yesterday’s low which if broken might accelerate the slide further towards 1.23 round figure. On the upside, immediate resistance now stands at 1.2662 the 50-day moving average while more offers will emerge at 1.2888 the 200-day moving average.  

Sterling futures markets open interest increased by 1,400 contracts while volume increased by 19,700 contracts.

EURUSD managed to rebound from weekly low around 1.1210 and now trades at 1.1240 mark which if the pair manages to close above will open the way to 1.1283 the high from Monday.  On the downside, immediate support stands at 1.1221 the 50-hour moving average. 

Euro futures markets open interest increased by 250 contracts while volume decreased by 32,700 contracts.

USDJPY is trading 0.13 percent lower at 107.75 having hit the daily low at 107.61 and the daily high at 107.97. USDJPY pair will find support around 107.50 round figure and then at 107.00. On the upside, immediate resistance for the pair now stands at 108.98 the recent high and then at 110.04 the 100-day moving average. 

USDCAD holds the gains from the recent rebound from the lows around 1.30 to 1.3054 amid broadly USD strength, and the retreat in crude oil prices, Canada’s main export item seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.32 zone before an attempt to 1.3450 recent high from 31st May.