Asian stocks finished mixed for one more day after a strong GDP figure from the USA on Friday and Europe continues to struggle under the weight of weaker economic data and political uncertainty. The Hang Seng benchmark in Hong Kong finished 0.90 percent higher at 29,875. Japanese markets are closed for 10 consecutive days. The Shanghai Composite is underperforming, finishing 0.77 percent lower at 3,067 and in Singapore, the FTSE Straits Times index finished 1.46 percent higher at 3,405. Australian equities came under pressure on Monday, held down by falls in the Financial, Energy, Telco, and Industrials sectors. The ASX 200 lost 26 points or 0.4% to 6,359, snapping a four-session positive streak which saw the market hit an 11 year high.
European session started with gains as traders focused on a steady stream of corporate results from US corporate heavyweights and better Q1 GDP reading from the USA. DAX30 is 0.35 percent higher to 12,358, CAC40 is 0.30 percent higher at 5,585 while FTSE100 in London is 0.07 percent lower at 7,433 and the FTSE MIB in Milan is trading 0.41 percent higher at 21,826.
In commodities markets, crude oil continues the correction lower from five-month high giving up one dollar at 62.97 as markets digest the US additional sanctions on Iran. Oil industry analysts expect that the sanctions could potentially remove up to 1.2 million barrels of oil per day from international markets. The near-term upside target that we have at the 65.00 figure has materialized, and now the $67 area is the next target as the bullish momentum builds up. Brent oil is also trading lower at $71,82 per barrel. Gold bearish momentum is still intact but the precious metal rebounds from previous week low adding 3 dollars to 1283 hitting the low at $1281. XAUUSD technical picture is negative, and now the support stands at the 200-day moving average down to $1250, which if broken can accelerate the downward move to 1200 as sellers are in full control. Strong resistance stands at the $1300 round figure and then at the 50-day moving average around $1303.
In cryptocurrencies market, bitcoin (BTCUSD) whose market capitalization accounts for more than half of all other cryptocurrencies combined, consolidates above the 5,000 mark after it lost over 300 dollars from high at $5,600 (five-month high. The New York Attorney General has taken on Friday action against Bitfinex and crushed crypto investor’s sentiment. Hong Kong-based iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd., has been commingling client and corporate funds to cover up the missing funds, which occurred in mid-2018 and hadn’t been disclosed publicly. The daily low for BTC was at 5,104 and daily high at 5,179. BTCUSD immediate support stands at the 200-day moving average at 5,091 while the next strong support stands at the $5,000 level and then at the daily low at 4,937. On the upside, strong resistance stands at 5600 the recent high. Ethereum (ETHUSD) is lower for the second day at 152 but holding above the 50-day moving average at 138, facing the immediate resistance at 185 the 200-day moving average, while Litecoin (LTCUSD) trades at 67.72 down 4 dollars from Friday level. The cryptocurrencies market cap holds above $160.0B.
On the Lookout:
The International Monetary Fund in its latest review on the Saudi Arabian economy for this year noted that the country needs oil at least at $85 to balance the budget.
In Australia, for the second consecutive quarterly survey, Victoria and NSW share the title of the best-performing economy.
The big focus on the US macro front will be the US personal income, and spending data is released along with the Dallas Federal Reserve manufacturing index.
Trading Perspective: In fx markets, the US dollar holds to recent gains for the fourth straight day at 97.89 figure supported by stronger US GDP. A stronger US dollar will likely increase the US trade deficit, adding risk that Trump administration continues to target those nations with a significant trade surplus with the US (China – Germany – Europe). The Aussie dollar continues the rebound from previous week low and trades at 0.7048 as cash rate futures now see a 71.0% probability of a rate cut in the next RBA meeting coming in two weeks. Kiwi trades flat in a narrow trading range at 0.6660.
GBPUSD is trading 0.22 percent higher at 1.2944 area, after hitting the two-month lows in the previous week and started a slow recovery above 1.29. On the downside, major support will be found at 1.2880 the low from the previous week and then at 1.2830 the support line from February. On the flipside, immediate resistance stands at 1.2961 the 200-day moving average.
In GBP futures markets noted open interest increased by around 3K contracts on Friday, while volume advanced more than 2.1K contracts.
EURUSD made a new 22 month low at 1.1115 last Thursday as sellers are in full control. The pair made the Asian high at 1.1165 and the low at 1.1144. Immediate support can be found at 1.1115 the yearly low, and further bids will emerge at 1.11 round figure. On the upside, the 100-hour moving average is the immediate resistance at 1.1174 while more offers will emerge at 1.1212 the 200-hour moving average.
In Euro futures markets, traders added nearly 1.7K contracts to their open interest positions on Friday from Thursday’s final 511,041 contracts. The volume went up by almost 28K contracts, reversing the previous drop.
USDJPY continues its consolidation around 111.75 zone after failing to hold above 112 level that managed to break last week. Today the pair hit the low at 111.53 and the high at 111.77. Major support for the pair stands at 111.51 the 200-day moving average and then at 111 round figure if the pair manages to break below the 100-day simple moving average at 111.10. Immediate resistance for the pair stands at 112.18 the April 2019 high.
In JPY futures markets, the open interest shrunk by around 5.5K contracts on Friday, according to advanced data from CME Group. Volume followed suit, down by nearly 5.5K contracts after three consecutive daily builds.
USDCAD consolidates lower, from 16 weeks high, after dovish Bank of Canada and trades at 1.3465. The pair will find immediate support at the 100-hour moving average around 1.3432 while extra support stands at 1.3396 and the 200-day moving average which if breached will drive prices down to 1.33 key support. On the upside, immediate resistance stands at 1.3570 a break of which can escalate the rebound towards 1.3630.