Market News Archives - The Industry Spread

Dollar Flat, Powell Faces a Divided Fed; Jackson Hole Speech Eyed

August 23, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, CFTC, EUR-USD, Forex, FX trading, GBP-USD, Retail Fx, Sino-U.S. trade talks, USD/JPY

Summary: It was a market where the Dollar Index (USD/DXY) closed little changed (98.207) ahead of today’s Jackson Hole, Wyoming central bank symposium. However, there was lots of movement in FX. The British Pound soared 1% against the Dollar to 1.2255 (1.2125), hitting one-month highs after German Chancellor Angela Merkel said a solution to the Irish border could be found ahead of the October 31 Brexit deadline. Against the beleaguered Euro, Sterling was up 1.08%. EUR/GBP plummeted to 0.9043 (0.9145). EUR/USD was modestly lower at 1.1080 (1.1087) despite better-than-expected rises in Euro area PMI’s. The Dollar dipped against the Yen to 106.42 (106.62). The Aussie fell 0.42% to 0.6760 (0.6780) while the Kiwi dropped 0.62% to 0.6370 (0.6403) after China’s offshore Yuan slumped 0.3% against the Greenback to 11-year lows (USD/CNH 7.0885 vs 7.0700). Asian currencies were all lower against the Dollar. Welcome to the good old world of FX!

FOREX FACTORY – US Manufacturing PMI – 23 Aug 2019

US Bond yields rose while stocks ended with moderate gains. The US 10-year bond yield climbed to 1.61% (1.59%). The spread between the US 2-year and 10-year yield moved to flat after briefly hitting negative territory. The Dow climbed 0.17% to 26,225.
Fedspeak revealed a deep divide amongst US policymakers on interest rates. Amidst a worsening global economic outlook two Fed officials said they saw no need for easing at this time.
Australia’s Flash Composite PMI’s missed forecasts at 49.5 from 51.5. French, German and Eurozone Flash Manufacturing and Services PMI’s were all better than expected. US Flash Manufacturing PMI’s fell to 49.9 in August from 50.4 and a forecast of 50.9. US Flash Services PMI also underperformed. US Weekly Jobless Claims improved to 209,000 from 220,000.

GBP/USD – The British currency jumped after Angela Merkel lifted invertor’s hopes that a solution to the crucial Irish border could be found before the October 31 Brexit deadline. Sterling soared to 1.2273, one-month highs before settling at 1.2255 as spec shorts scrambled for cover.
EUR/USD – The Euro remained on the backfoot closing near at 1.1080 (1.1087) despite better-than-expected Euro area PMI data. Sentiment toward the shared currency remains bearish with the ECB expected to announce fresh stimulus measures in September.
AUD/USD – The Aussie dropped after the Chinese Yuan hit its weakest since March 2008. USD/CNH jumped 0.3% to 7.0885 (7.0700) while Asian currencies fell. AUD/USD retreated to 0.6760 at the close.

On the Lookout: All eyes on Jerome Powell due to deliver a keynote speech at the Jackson Hole symposium in Wyoming (12 midnight Sydney 23 August). Powell’s speech will be on the “Challenges of Monetary Policy”. He faces a divided Fed after two key policymakers said they saw no need for easing at this time. Kansas City Federal Reserve president Esther George (a noted hawk) said that the July rate cut was not needed, and that further stimulus measures are not needed. Patrick Harker, Philadelphia Federal Reserve Head said that there was no need for another rate reduction. Dallas Fed President Kaplan backed the July rate cut. Powell will want to be seen not bowing to repeated attacks from President Donald Trump for not easing policy further. Markets are expecting the US central bank head to clarify the July meeting minutes “mid-cycle adjustment” message and re-affirm an easing stance. The risk is that Powell downplays any rate cut chances.
The US 2-year against 10-year bond yield spread closed flat (1.61%). A move to negative territory, the market’s most feared recession signal, will put pressure on the US Dollar.

Forex Factory – Jackson Hole, Wyoming Economic Policy Symposium Description – 23 AUG 2019

Trading Perspective: It all boils down to Jackson Hole, the annual Wyoming symposium hosted by the Kansas City Fed which is attended by global central bankers, finance ministers and academics and financial market participants. In the past, Jackson Hole has moved FX and this year is no different. Be ready for a volatile ride in FX tonight.

LIVECHARTS.CO UK – GBP USD 1H Chart – 23 AUG 2019

GBP/USD – Yesterday’s move in Sterling saw the impact of market positioning in FX. While Angela Merkel’s comments offered hope for a Brexit backstop solution, the reality is that the UK and EU remain far apart on the issue. French President Macron was sceptical after a meeting with Boris Johnson. For weeks, Sterling has been under pressure on fears that Johnson would take the UK out of the EU without a deal. Net speculative short GBP bets increased to multi-year highs according to the latest COT/CFTC report. GBP/USD jumped to an overnight high at 1.2273 from 1.2125 yesterday before settling at 1.2255. Immediate resistance lies at 1.2270-1.2300. Immediate support can be found at 1.2220 and 1.2180. From here it will depend much on where the US Dollar heads. Look for a volatile 1.2200-1.2300 range today.
EUR/USD – The Euro slid to 3-week lows at 1.10636 before settling at 1.1080 in New York. The shared currency traded to an overnight high at 1.11132. The immediate resistance at 1.1120/30 is strong and would have to see a clean break to push the Euro higher. Immediate support at 1.1060 should hold, otherwise we will see EUR/USD test this year’s low at 1.1025. The next support level lies at 1.0980. Market sentiment is decidedly bearish, but the specs are short. Look to trade a likely range of 1.1060-1.1110 until Powell speaks at Jackson Hole.
AUD/USD – Like the Euro, market sentiment is bearish on the Australian Battler. Net speculative Aussie shorts increased to -AUD 62,912 contracts, an increase of 13% from the previous week. Spec shorts are now at 83% of 2019’s biggest total. The Australian Dollar TWI is at lows now seen since 2008. All supportive factors. On the other hand, continuing weakness in the Chinese Yuan and Asian currencies will weigh on the Australian currency. The locals are decidedly bearish which makes this writer want to buy Aussie dips. An overly bearish domestic market has almost always been a reverse indicator. AUD/USD closed at 0.6760 from 0.6780 yesterday. Immediate support lies at 0.6750 (overnight low 0.67509). The next support level lies at 0.6730 and 0.6700. Immediate resistance can be found at 0.6790 (overnight high 0.67872) followed by 0.6810. Look to buy dips with today’s range likely 0.6750-0.6800.

Put those tin helmets on and get ready to rumble. Happy Friday and trading all.

Equities Subdued on Fed Meeting Minutes Update, US PMI’s In Focus

August 23, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: Fed Meeting, forex market, NA market

Fed meeting minutes revealed unexpected shift in fed stance causing traders to look for clarity in Jackson hole symposium and fed speech. US Preliminary PMI in focus.

Summary: Global market today saw key risk assets – benchmark indices, equities, F&O’s trade subdued following unexpected cues from fed meeting minutes released yesterday. The Fed meeting minutes show that contrary to public expectations that interest rate adjustments made in last meeting was start of long term easing, the changes made last time were considered by FOMC members as more of recalibration of interest rate to suit current economic scenario. This threw investors and analysts into confusion, causing traders to take on cautious stance and observe proceedings in the market awaiting fresh directional cues before placing any major bets. Following Asian market’s price momentum, European markets also saw subdued opening in the market today. But better than expected Euro area services and markit composite PMI updates helped investor sentiment gain a bullish edge resulting in comparatively positive price action in European equity market today. In forex market, while Yuan continues to decline owing to prolonged trade war, major global currencies are seeing neutral to slightly dovish activity owing to mixed signals such as declining USD and unexpected shift it Fed stance on interest rate decision.

Precious Metals: Precious metals continue to trade with slight dovish bias albeit limited declines as prevalent caution in global market and weak USD in the global market today provide some level of support to precious metal bulls keeping safe-haven demand relatively high in the market today.

Crude Oil: Crude oil is seeing mixed activity, while spot market remains neutral with slight tinge of dovish influence, futures of two major international crude oil benchmarks are trading with positive bias influenced by decline in US weekly Crude oil inventory data which saw draw in both EIA & API stockpile.

AUD/USD: The pair is trading with dovish bias today as cautious investor sentiment influenced by fed meeting minutes update and Sino-U.S. trade war woes weighed down AUD while USD’s decline helped limit loss. However, AUD bulls remain pressured by market bears keeping the pair trading in red.

On The Lookout: Geo-Political events took the backseat post release of fed meeting minutes yesterday. As Fed meeting minutes revealed that the recent change made in interest rate was more of a recalibration rather than continues series of policy easing while comments from Fed members have been fairly dovish, investors took cautious stance awaiting clarity of Fed’s stance before making major bets. In immediate future, while geo-political events continue to dictate long term price momentum, the price momentum in present and immediate future will be decided based on directional cues gained from Jackson hole symposium later today and Fed Chair Powell’s speech tomorrow. Ahead of Powell’s speech, risk assets are likely to remain subdued on cautious investor sentiment. On release front today, US calendar is set to see the release of Preliminary Manufacturing, Services and Markit Composite PMI while Canadian calendar is set to see release of Whole sales data which are to provide short term trading cues.

Trading Perspective: Forex market is likely to gain some level off directional bias post Jackson hole symposium update but is likely to remain in familiar levels until Powell speech later tomorrow. US Futures trading in international market in Asian and European market hours traded positive on upbeat earnings reports from retail stocks. However caution ahead of Jackson hole symposium will likely keep gains in check post subdued opening in US Wall Street later today.

EUR/USD: The pair traded positive earlier in the day as upbeat EU area macro data helped improve sentiment surrounding EURO bulls. But the influence faded shortly as caution ahead of Jackson hole symposium kept risk assets capped resulting in pair declining and hitting fresh three week lows. Traders now await Jackson hole symposium update for short term profit opportunities in NA market hours.

GBP/USD: The pair is trading positive in late European market hours influenced by German Chancellor Merkel’s comments which eased no-deal Brexit woes. Merkel stated a solution to backstop can be found before Oct 31 boosted GBP bulls helping GBP push the price back above 1.22 handle. Traders now await Jackson hole symposium update for short term profit opportunities in NA market hours.

USD/CAD: The pair is trading in red today influenced by USD weakness and spike in crude oil price in the global market. Canadian Loonie being a commodity linked currency gained strength to push below 1.33 handle and has remained steady below the mentioned price level for major part of the day. Traders now await Jackson hole symposium update for short term profit opportunities in NA market hours.

Please feel free to share your thoughts with us in the comments below.

NZDUSD Continues South, EURUSD Consolidates around 1.11

August 22, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: EURUSD, Jackson Hole, NZDUSD

Asian indices finished mixed today as investors turn cautious ahead of the Jackson Hole meeting later this week. The Hang Seng trading 0.84 percent lower at 26,048, Nikkei225 in Japan is 0.05% higher at 20,628. The Shanghai Composite trading 0.11 percent higher to 2,883, while in Singapore the FTSE Straits Times index finished 0,22 percent higher to 3,129. Australian equities trading higher, the ASX 200 is 0.29% higher to 6,501.

European equities started lower today, DAX30 is 0.15 percent lower to 11,783, CAC40 is 0.44 percent lower at 5,411 while the FTSE MIB in Milan is trading 0.28 percent higher at 20,904. The London Stock Exchange is 0,59% percent lower to 7,161.

In commodities markets, crude oil trades 0.38 percent higher at $55.89 as traders turn cautious on recent trade war escalation and global growth concerns. Brent oil is trading 0.22% higher at $60,43 per barrel despite major oil producers have agreed to cut output. Gold consolidates around 1,500 mark keeping the bullish momentum as the price holds above all the major daily moving averages. On the upside, strong resistance will be met at 1,534.94 recent high.

In cryptocurrencies, Bitcoin (BTCUSD) trades lower at 9,914, hitting the daily low at 9,741 and the daily high at 10,164. Bitcoin lost the bullish momentum as it breached below the 50-day moving average. Immediate support for BTC stands now at $9,439 the low from July 30, while next support stands at 9,000. On the upside, strong resistance now stands at 13,138 recent high and then at 13,500 round figure. Ethereum (ETHUSD) trades lower to 184, with capitalization now to 19.9 billion, on the upside the immediate resistance stands at 317 high while the support stands at 172 recent low, Litecoin (LTCUSD) also trades lower at 72.90. The crypto market cap now stands above $259.4 billion.

On the Lookout: Germany’s Manufacturing PMI came in at 43.6 beating expectations of 43 in August the Composite PMI also came in at 51.4 above forecasts of 50.5 in August. The EU Manufacturing PMI came in at 47 topping forecasts of 46.2 in August. Japan All Industry Activity Index (month over month) registered at -0.8%, below forecasts of -0.7% in June.

NZDUSD Weekly Chart

Trading Perspective: In forex markets, USD index trades 0.07 percent higher at 98.32, the Aussie dollar trades 0.27 percent lower at 0.6763, while Kiwi trades lower to 0.6383.

GBPUSD trades 0.09% higher at 1.2132. Major support now stands at 1.2017, the daily which if broken might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2415 the 50-day moving average while more offers will emerge at 1.2652 the 100-day moving average.

In Pound futures markets open interest decreased by 1,300 futures contracts, while volume decreased by 21.500 contracts.

EURUSD trades 0.07% higher and consolidates at 1.1082, as Oli Rehn’s dovish comments pressure the common currency. Immediate resistance for the pair stands at 1.1114 the 100-hour moving average and then at 1.1156, the 200-hour moving average. On the downside, immediate support stands at 1.1069 the low from August 2 and then at 1.1026 the YTD low.

In Euro futures markets open interest decreased by 1,700 futures contracts, volume decreased by 340.500 contracts.

EURUSD Daily Chart

USDJPY is trading 0,15% lower at 106.37 having hit the daily low at 106.24 and the daily high at 106.64. USDJPY pair will find support at 106.20 the low from yesterday. On the upside, immediate resistance for the pair now stands at 107.56 the 50-day moving average and then at 108.91 the 100-day moving average.

USDCAD is trading 0.03 higher at 1.3289, 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 1.3330 the daily high before an attempt to 1.3450 high from 31st May.

Fed Signals Flexibility on Rate Cut Path, US Yields, Dollar Advance

August 22, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, CFTC, EUR-USD, Fintech, Forex, FX trading, GBP-USD, trading platform, USD/JPY

Summary: The Dollar advanced against its rivals, climbing most against the safe-haven Yen and Swiss Franc. US bond yields rose after Fed minutes signalled that policymakers preferred flexibility when it came to the path of further rate cuts. In its July meeting FOMC members discussed a 50-basis point rate cut but decided on 25 basis points, seen as a mid-cycle adjustment. Yields on US treasuries rose after the minutes were published. The benchmark 10-year yield bond yield climbed to 1.59% (1.56%). Two-year US rates rose to 1.57% from 1.51%. Risk appetite increased, stocks rallied, paring gains at the New York close. The Dollar gained 0.37% against the Yen to 106.64 from 106.22. USD/CHF was up 0.47% to 0.9830 from 0.9778. The Euro slipped back to 1.1082 (1.1100) while Sterling retreated 0.345% to 1.2122. The Australian Dollar was little changed, finishing at 0.6780 (0.6778).
The DOW finished up 1.4% at 26,260, while the S&P 500 ended up 1.25% to 2,932.
Canada’s July Headline CPI beat forecasts, up 0.5% against an expected 0.1%.

CNBC US Bond Yield Table – 22 AUG 2019

EUR/USD – The Euro slipped against the generally stronger US Dollar to close at 1.1085. The shared currency traded within a familiar 30-point range between 1.1080 and 1.1110.
USD/JPY – the Dollar advanced against the safe-haven Yen to 106.65, up 0.32%. The rise in the US 10-year yield once again the main support for the Greenback. The increase in risk appetite also weighed on the Yen and the other safe-haven Swiss Franc.
GBP/USD – The British currency slipped back to 1.2125 from 1.2170. Traders were cautious about an upcoming meeting between Boris Johnson and Angela Merkel on Brexit. While both leaders intend to make the divorce as smooth as possible, market sentiment on Sterling remains bearish. On the other hand, market positioning is well short on Pounds.
AUD/USD – The Australian Dollar finished little changed at 0.6780 against the backdrop of broad-based USD strength. Trade tensions between the US and China have eased with the recent US concessions. And the RBA has signalled a wait-and-see stance for now.

On the Lookout: The Jackson Hole, Wyoming Symposium begins late Thursday in the US. Fed Chair Jerome Powell’s speech takes on added significance following the signal from the Fed’s later meeting minutes and constant criticism from President Trump.
Today sees a data dump with the latest Manufacturing and Services PMI’s from several major economies.
Australia’s Flash Manufacturing PMI beat forecasts (51.3 vs 51.0) however Services underwhelmed (49.2 vs 51.8). Japan reports its Flash Manufacturing PMI (10.30 am Sydney). Japanese All Industry Activity Index is also released today. The Euro area begins with French, German and Eurozone Flash Manufacturing and Services PMI’s with most expected to be close to the previous month’s results. Eurozone Consumer Confidence (August) is also due for release later in the day. The ECB releases its monetary policy meeting accounts. UK CBI Realised Sales precede Canada’s Wholesale Sales report (June). The US releases its Flash Manufacturing and Services PMI followed by US Conference Board Leading Industry Index.

Trading Perspective: The Dollar should stick within its recently established ranges ahead of Jackson Hole. The climb in US bond yields will provide short term support for the Greenback. Bonds though have been behaving more like currencies. The Dollar has since retreated in early Asia following its advance on the less dovish Fed. Jackson Hole this year could be huge for FX. The next 48 hours will be crucial for the US Dollar and its rivals.
Jackson Hole also coincides with the conclusion of the northern hemisphere August summer holidays. This writer can remember Jackson Hole meetings in the past where a speech from the Fed Head (Yellen, Bernanke) moved FX in extremely volatile fashion. The importance of Jerome Powell’s speech cannot be underestimated.

EUR/USD – The Euro trading range has narrowed as we approach Jackson Hole. Despite the resignation of Italian PM Conte yesterday EUR/USD traded in a tight 27-point range between 1.1080 and 1.1107. Today’s Euro area PMI’s will be the first test for the shared currency. Median expectations are for slightly weaker numbers than the previous release. Euro area economic data has been mostly weaker in Q2. Meantime market positioning is still short Euro but not at extremes. EUR/USD has immediate resistance at 1.1110 and 1.1130. Immediate support can be found at 1.1080 and 1.1060. Weaker than expected PMI’s could see 1.1060 tested but expect that to hold into Jackson Hole. Look to trade both sides for today with a likely range at 1.1060-1.1110.

CNBC US Bond Yield Table – 22 AUG 2019

USD/JPY – The Dollar traded to an overnight low at 106.213 before rallying on the Fed minutes to 106.65 at the New York close. The rise in US 10-year yields to 159% and increase in risk appetite boosted the Dollar against the Yen. Overnight high was 106.65 which is immediate resistance for today. The next resistance level is found at 106.80 and 107.00. Support can be found at 106.20 followed by 105.80. Look to trade both sides with a likely range today of 106.25-106.75. Prefer to buy dips.
AUD/USD – The Aussie Battler held against the overall stronger Dollar finishing little changed at 0.6780 (0.6778). AUD/USD has immediate resistance at 0.6800 followed by 0.6830. Immediate support can be found at 0.6770 (overnight low 0.67729) followed by 0.6750. Emerging Market currencies were stronger against the US Dollar last night which is Aussie supportive. Speculators are also short Aussie bets. And the Australian Dollar TWI (Trade Weighted Index) is still near multi-year lows. Look to trade a likely 0.6760-0.6810 range. Prefer to buy dips.

Happy trading all.

US Dollar, Yields Dip, Aussie Climbs as RBA Holds Steady

August 21, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Capital Markets, CFTC, EUR-USD, FOMC, FX, FX trading, GBP-USD, SEC, USD/JPY

Summary: The US Dollar and bond yields dipped as optimism on new stimulus measures from global central banks faded just days ahead of the Jackson Hole, Wyoming gathering. Fed Chair Jerome Powell will open annual symposium with a speech where several other central bank heads are expected to speak. Markets were cautious but remained calm. US President Trump stepped up his attacks on the Federal Reserve, saying Jerome Powell should cut rates 100 basis points and add QE as well. The Dollar Index (USD/DXY) a popular gauge of the currency’s value against 6 majors, dipped 0.18% to 98.171. US bond yields retreated. Benchmark US 10-year rate finished at 1.56% from 1.61% yesterday, trading more like a currency. In Italy PM Giuseppe Conte resigned, opening prospects for new elections and adding to global uncertainties. The Euro recovered to 1.1100 after hitting near two-year lows. Earlier, Australia’s central bank, the RBA revealed a “steady as she goes” policy from its latest meeting minutes. The Australian Dollar bounced off its lows to close at 0.6777, up 0.3% (0.6752). Risk aversion led to a lower Dollar versus the haven sought Yen to 106.20 from 106.62 and Swiss Franc, 0.9778 from 0.9817.

BloombergMarkets US 10-Year Bond Yield Hourly Chart – 21 AUG 2019

Wall Street stocks gave back most of their gains. The DOW dipped 0.83% to 25,897, from 26,115. The S&P 500 lost 0.9% to 2,895. (2,922.)

EUR/USD – managed to rally on the back of weaker US Dollar to 1.110 (1.1080 yesterday) despite Italy’s growing political turmoil. In his resignation Conte accused Deputy Minister Mateo Salvini of breaking up the government and putting the country at risk. Earlier the Euro dropped to near 2-year lows at 1.10656.
AUD/USD – The Australian Dollar rallied against the Greenback to 0.6777 from 0.6752 after the RBA latest meeting minutes revealed a “steady as she goes” policy. Market sentiment though remains bearish on the Battler. AUD/USD kept within a two-week trading range.
USD/JPY – the Dollar dipped against the Yen weighed by lower 10-year bond yields and a more risk-averse market stance. USD/JPY closed at 106.20 from 106.62 yesterday.
GBP/USD – The British Pound rallied against the generally weaker Greenback to 1.2170 (1.2130 yesterday). Sterling was aided by comments from German Chancellor Angela Merkel who said that the EU would think about practical solutions to the backstop, which is the agreed insurance policy for the Irish border. Boris Johnson’s UK government wants it scrapped.

On the Lookout: Yesterday saw a light economic calendar while in Italy, politics heated up. The trade front produced little headway which traders will keep a lookout for in Asia today. China has yet to respond to the recent US moves.
Today data releases pick up. Australia opens with its M1 Leading Index followed by New Zealand’s annual Credit Card Spending (August). The UK reports on its Public Sector Net Borrowing, the difference between government spending and income. Canada reports on its inflation numbers with Headline August CPI, Annual Trimmed CPI, August Core CPI data. The US Existing Home Sales report rounds up the day’s data. The FOMC’s latest meeting minutes are released in the North American evening (early Sydney Thursday 4 am). Which will give traders a clearer guide of future Fed interest rate policy.

Trading Perspective: Ahead of the FOMC’s release of its meeting minutes and Jackson Hole, Wyoming global central bank symposium, expect the recent trading ranges to hold. We highlighted that net speculative US Dollar longs were very much unchanged. However speculative shorts in Sterling and the Australian Dollar continued to build, which may see further short-covering support. Against the Yen, it is a totally different ball game. Among the majors, the Yen is the only currency where speculators are net long the currency (ie short US Dollars).

Saxo Bank Bloomberg – Non-Commercial USD vs 9 IMM Currencies – 21 AUG 2019

President Trump’s attacks on the Fed and some of his solutions, ie cutting taxes on payrolls will erode support for the US Dollar. It is no secret now that he prefers a weaker Dollar. Watch the bond yields, they are trading like currencies and will give us a guide.

EUR/USD – The Euro rallied on the back of the generally weaker US Dollar. The latest drama in the Italian political scene leaves the shared currency vulnerable. EUR/USD closed at 1.1100 after trading to an overnight and near 2-year low at 1.10656. The overnight high traded was 1.11066 which leaves the immediate resistance at 1.1110. The next resistance level lies at 1.1130. Immediate support can be found at 1.1080 and 1.1060. A clean break of 1.1060 could see 1.1027, early August and two-year lows. The latest COT report saw a small increase in net speculative Euro shorts to -EUR46,649 contracts. Which is about 45% off the biggest shorts recorded in a year. Expect a likely trading range today of 1.1060-1.1110.
USD/JPY – The Dollar retreated against the Yen weighed by lower US bond yields and a rise in risk aversion. USD/JPY closed at 106.22 from 106.62 yesterday. Immediate support for today can be found at 106.10 followed by 105.80. Immediate resistance can be found at 106.70 and 107.00. The latest COT report saw net speculative long JPY bets increase by +JPY 14,181 bets to total +JPY 24,742 the biggest total since November 2016. This is a danger sign to getting too short of US Dollars near the 105.00 area. We also know that the Japanese authorities will be vigilant at those levels as well. Meantime we have not broken out of the 105-107 range. Look to trade a likely range today of 106.00-106.70. Prefer to buy dips.
AUD/USD – The Australian Dollar dipped to an overnight low at 0.67546 ahead of the RBA meeting minutes release yesterday. Following the result where the Australian central bank signalled a steady as she goes policy, the Battler slowly grinded higher against the generally weaker Greenback. AUD/USD traded to an overnight high at 0.6495. Immediate resistance remains at 0.6800 followed by 0.6830. Immediate support can be found at 0.6755 followed by 0.6730. The latest COT report saw speculative Aussie shorts increase to -AUD 62,912 bets from the previous week’s -AUD 55,511. Look to trade a likely 0.6760-0.6810 range today, prefer to buy dips.

21 AUG 2019 – DAILY FX GBP USD 1D Chart –

GBP/USD – Sterling had a brief rally to 1.2180 after Merkel’s positive comments on the EU’s preparedness to think about practical solutions to the Irish backstop which is key to a Brexit agreement. This was short-lived and the Pound slipped back to 1.2160 in early Asia. GBP/USD has immediate resistance at 1.2180 followed by 1.2210. Immediate support can be found at 1.2130 followed by 1.2100. The latest COT report saw speculative short GBP bets trimmed to -GBP 95,820 contracts from the previous week’s -GBP 102,702. This is still a large number of shorts, and the risk is for a further short squeeze. Look to trade a likely range today of 1.2110-1.2180. Prefer to buy dips.

Happy trading all.

Equities Muted Post Strong Rebound, Lingering Stimulus Keeps Bulls Sustained

August 21, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: Germany, Huawei, Sino-U.S. trade talks

Summary: Asian market opened positive post bullish price action in US Wall Street last night. US decision to give China’s Huawei a 90-day extension combined with easing recession woes played a major role in influencing positive action in the global market yesterday. Lingering influenced from previous sessions positive cues helped underpin market bulls in Asian market today.

The European market also saw a positive opening on cues from the Asian market and positive investor sentiment. But lack of trigger and factors to sustain bull’s influence on price action and profit booking activities caused key European indices to decline in late European market hours.

Also, investors expectations that German stimulus may not be sufficient to keep the economy strong weighed down investor sentiment. In forex markets, USD’s rebound along with easing strength of market bulls has caused major global currencies to decline sharply resulting in dovish price action.

Precious Metals: Precious metals reversed loss incurred in the previous session and are trading positive in the global market today. Despite the rebound in USD, receding influence surrounding market bulls has caused investors to divert funds to safe-haven assets to protect part of their investments.

Crude Oil: Crude oil is trading in red today but losses were capped as easing trade war woes ahead of upcoming talks between the US and China kept crude bears in check. However, demand to supply ratio still remains a cause for concern weighing down crude oil in the global market today.

AUD/USD: The pair opened positive for the day and is trading in green. But gains were capped owing to decline in Aussie T.Yields and risk aversion booming in European market hours. However, optimism surrounding upcoming Sino-U.S. trade talks keeps AUD bulls sustained.

On The Lookout: Geo-Politics remains the main focus of global investors. However, a lack of progress which could cause a significant change in price direction has caused cues from geopolitical events to take back seat. Macro data and local market headlines remain as the main driving force behind intra-day price action in immediate and near future trading sessions. US and China representatives are set to talk about trade deal which if has a positive progress would result in delegates of both nations meeting in the US but as Trump commented recently it doesn’t guarantee a trade deal unless Hong Kong protests are resolved in humanitarian as Trump sees more gains when both China and Hong Kong are at peace. In macro calendar front today, the US remains silent while the Canadian calendar is scheduled to see the release of manufacturing Sales data.

Trading Perspective: In US market hours, Wall Street is likely to see subdued price action given the muted performance of US stock and index futures in the international market today ahead of Wall Street opening. However, receding recession woes are likely to keep bulls sustained to some extent. Traders await the release of earnings reports from Home Depot, Amcor PLC, Medtronic and Kohls Corp which are likely to provide some short term directional and trading cues.

EUR/USD: The pair is trading with slight bearish bias in the global market today as European markets turned risk-averse over the possibility of German Stimulus lacking the strength to keep economy supported. Firm USD bulls also weighed down EURO. Traders now await fresh cues from US market for short term profit opportunities.

GBP/USD: The pair trades in red as GBP suffers from Brexit uncertainties given EU’s stubborn stance to revoke Irish backstop agreement ahead of high-level talks between EU representatives and UK PM Boris Johnson. Traders now await further updates on Brexit proceedings and cues from the US for directional bias and short term trading opportunities.

USD/CAD: The pair is trading positive as firmer USD helped bulls keep positive momentum sustained while CAD bulls suffered owing to decline in Crude oil price in the global market today. Traders now await upcoming US API inventory data and Canadian manufacturing data for short term profit opportunities.

EURUSD at Weekly Lows, Gold below 1,500

August 20, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: EURUSD, Germany, gold

Asian indices continue higher for the second day mirroring Wall Street as traders look for stimulus in major economies that can boost hectic growth. Germany is prepared to increase fiscal spending as its economy heading to a recession, while the central bank of China lowered corporate borrowing costs. The Hang Seng is trading 0.05 percent higher at 26,306. Nikkei225 in Japan is 0.46% higher at 20,656. The Shanghai Composite traded 0.07 percent higher to 2,884, while in Singapore, the FTSE Straits Times index finished 0,33 percent higher to 3,138. Australian equities are trading higher; the ASX 200 is 0.83% lower to 6,458.

European equities started higher for the second day, DAX30 is 0.37 percent higher to 11,759, CAC40 is 0.36 percent higher at 5,390, while the FTSE MIB in Milan is trading 0.03 percent lower at 20,706. The London Stock Exchange is 0,49% percent higher to 7,225.

XAUUSD Daily Chart

In commodities markets, crude oil trades 0.05 percent higher at $56.17 as traders turn cautious on recent trade war escalation and global growth concerns. Brent oil is trading 0.08% higher at $59,79 per barrel despite major oil producers have agreed to cut output. Gold is under pressure and breached the 1500 mark down to 1,495, keeping the bullish momentum as the price holds above all the major daily moving averages. On the upside, strong resistance will be met at 1,534.94 recent high.

In cryptocurrencies, Bitcoin (BTCUSD) continues higher at 10,789, hitting the daily low at 10,621 and the daily high at 10,944. Bitcoin managed today to break above the 50-day moving average, and bulls are looking to add to long positions. Immediate support for BTC stands now at $9,439 the low from July 30, while next support stands at 9,000. On the upside, strong resistance now stands at 13,138 recent high and then at 13,500 round figure. Ethereum (ETHUSD) adds four dollars to 197, with capitalization now to 21.4 billion, and on the upside, the immediate resistance stands at 317 high while the support stands at 172 recent low. Litecoin (LTCUSD) trades lower at 75.90. The crypto market cap now stands above $271.4 billion.

On the Lookout: Australia weekly consumer sentiment, ANZ/Roy Morgan survey came in at 112.8 while the previous week was at 115.5. The central bank of China set the Yuan rate (USDCNY) at 7.0454 versus yesterday fix at 7.0365.

Trading Perspective: In forex markets, USD trades 0.03 percent lower at 98.33, the Aussie dollar trades 0.37 percent higher at 0.6790, while Kiwi traded lower to 0.6424.

GBPUSD trades 0.02% higher at 1.2123. Major support now stands at 1.2017 the daily which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2415 the 50-day moving average while more offers will emerge at 1.2652, the 100-day moving average.

In Pound futures markets open interest increased by 525 futures contracts, while volume decreased by 21.500 contracts.

EURUSD trades 0.07% higher at 1.1082, as Oli Rehn’s dovish comments pressure the common currency. Immediate resistance for the pair stands at 1.1114 the 100-hour moving average and then at 1.1156 the 200-hour moving average. On the downside, immediate support stands at 1.1069 the low from August 2 and then at 1.1026 the YTD low.

In Euro futures markets, open interest decreased by 1,700 futures contracts, and volume decreased by 34.800 contracts.

EURUSD Daily Chart

USDJPY is trading 0,15% higher at 106.48 having hit the daily low at 106.45 and the daily high at 106.68. USDJPY pair will find support at 106.25 the 100-hour moving average. On the upside, immediate resistance for the pair now stands at 107.60 the 50-day moving average and then at 109.01, the 100-day moving average.

USDCAD is trading 0.05 lower at 1.3317, and 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 1.3330 the daily high before an attempt to 1.3450 high from 31st May.

DXY Advances to 2019 Highs, Global Stimulus Hopes Boost Risk

August 20, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, CFTC, EUR-USD, Forex, FX trading, GBP-USD, trading platform, USD/JPY

Summary: Optimism on stimulus hopes from Germany and China boosted risk which lifted the Dollar, treasury yields and stocks. The Bundesbank’s (German central bank) latest monthly report stated: “there is a risk the German economy could shrink again in the third quarter.” German Finance Minister Olaf Scholz reportedly said that Berlin could make available EUR 50 billion of extra spending in case of a slowdown. This saw EUR/USD retreat for the 5^th day in a row to close at 1.1080, down 0.11%. Elsewhere, China is preparing to announce today details of their new Loan Prime Rate program (approx. 11.30 am Sydney time). Which replaces their fixed benchmark lending rate (updated every 20^th of the month). Markets expect the fixed rate (4.35%) to be set lower. Risk appetite increased with the Dollar, treasury yields and stocks climbing. The Dollar Index (USD/DXY) rose 0.23% to 98.372, approaching 2019 highs. Haven darlings the Yen and Swiss Franc retreated. USD/JPY was up 0.29% to 106.62 (106.35) while USD/CHF advanced 0.49% to 0.9817 (0.9787). The Australian Dollar eased to 0.6765 (0.6775) ahead of today’s RBA August meeting minutes release.
Wall Street stocks rallied with the S&P 500 adding 1.05% to 2,922. (2,892). The benchmark US 10-year bond yield climbed 6 basis points to 1.61%. Germany’s 10-year Bund yield closed at -0.65% from -0.69% yesterday. Japan’s 10-year JGB yielded -0.24%, unchanged from yesterday.
New Zealand’s PPI Input and Output beat expectations. The Eurozone’s Final CPI (annual) slipped to 1.0% from the previous 1.1% and forecasts of 1.1%.

TRADING VIEW – DXY Chart – 20 August 2019

EUR/USD – slip-sliding away. The Euro retreated for the 5^th day in a row to finish modestly lower at 1.1080 (1.1090 yesterday). The Bundesbank’s monthly report findings and comments by the German Finance Minister weighed on the shared currency. However, there was little movement ahead of next week Euro area PMI’s and Friday’s Jackson Hole summit.
USD/JPY – The Dollar rallied against the haven sought after Yen following the rise in US treasury yields. Risk-on stance by the markets on global stimulus hopes also buoyed USD/JPY. The latest COT/CFTC report saw little change to the overall speculative long USD positioning. Against the Yen (and Sterling), there are highlighted changes.
USD/DXY- while mainly a mirror of the Euro, the Dollar advanced against the Yen, Sterling and Swiss Franc. USD/DXY closed 0.23% higher to 98.372 from 98.203 yesterday. DXY was boosted by the climb in US bond yields and within striking distance of 2019 highs at 98.93.
AUD/USD – the Aussie stayed weak ahead of today’s RBA August meeting minutes release (11.30 am Sydney time). AUD/USD finished at 0.6765, down 0.18% from 0.6775. While RBA speak has been less dovish and economic data brighter, market sentiment toward the Battler is still bearish. The risk, according to this writer, could be for an Aussie short squeeze.

On the Lookout: The main event today is the RBA’s August monetary policy meeting minutes release. Economic data releases start off with the Swiss Trade Balance followed by German Producer Prices. The UK reports its CBI Industrial Order Expectations. Canada reports its Manufacturing Sales for August. New Zealand’s Global Dairy Prices are also released early tomorrow morning.
Traders will be focussed on China today with the new interest rate mechanism paving the way for lower borrowing costs to businesses.
On the trade front, tensions eased with the announcement that the US is granting Chinese tech giant Huawei a 90-day extension with which to buy components from US companies to supply their customers.

The Jackson Hole Symposium for the world’s central banks which begins on Friday with a speech by US Fed Chair Jerome Powell is the week’s big event.

Trading Perspective: Amidst the plethora of news items, FX stayed well within established ranges. The Dollar Index extended its grind higher, this time against a broader range of currencies. The bounce back in US treasury yields have been a solid support for the Greenback, and we would need to see more yield support for a move higher.

The latest COT/CFTC report (week ended 13 August) saw total net speculative US Dollar long bets pretty much unchanged. Speculators increased their net long US Dollar bets against the Euro, Aussie and Canadian Dollar. Versus the British Pound, specs cut their short Sterling bets. The biggest move came against the Japanese Yen where speculative long JPY bets increased +JPY 25,000 lots, to their biggest total since November 2016.

EUR/USD – The Euro remains under pressure with all the stimulus rhetoric coming out of Europe of late. EUR/USD grinded lower top close at 1.1080, trading to a low of 1.10762. Overnight high for the Euro was 1.11138. Lately, Euro area economic data has underperformed. On Thursday, crucial Euro area and Eurozone Manufacturing and Services PMI’s for August are due. Should the PMI’s be weaker than expected, the Euro will test recent lows of 1.1027. Immediate support lies at 1.1070 followed by 1.1040. Immediate resistance can be found at 1.1100 and 1.1120. The latest COT report saw speculative short Euro bets increase to -EUR 46,649 bets from the previous week’s -44,010 bets. Look to trade a likely range of 1.1060-10. Prefer to buy dips.
AUD/USD – the bearish sentiment on the Aussie stayed intact with the US Dollar gaining strength on a broad base. While risk rallied, Emerging Market currencies ended lower against the Greenback. Higher US yields contrast with market expectations of lower Australian rates. Markets are still looking for a dovish bent from the RBA. AUD/USD closed at 0.6765. Immediate support on the day can be found at 0.6740 followed by 0.6710. Immediate resistance lies at 0.6800 and 0.6840. The latest COT/CFTC report saw speculative Aussie short bets increased to -AUD 62,912 bets (week ended 13 Aug) from last week’s -55,571. That’s a decent rise. Let’s not forget that the Aussie Dollar TWI is at multi-year lows. The risk is for a short squeeze soon. Today’s likely range will be 0.6745-0.6795. Prefer to buy dips.

DAILY FX – USD JPY Chart – 20 AUGUST 2019

USD/JPY – The Dollar rose to finish at 106.62, up 0.29% on higher US yields and a more positive market risk profile. USD/JPY traded to an overnight high at 106.697. Immediate resistance lies at 106.70 followed by 107.00. Immediate support can be found at 106.30 (overnight low 106.244) and 106.00. The latest COT/CFTC report (week ended 13 August) saw speculative JPY long bets increase by a hefty +JPY 14,181 contracts to total +JPY 24,742 bets, the biggest net long JPY total since November 2016. Which isn’t surprising given current market sentiment. Look to trade a likely range today of 106.25-106.95. Prefer to buy dips.

Happy trading all.

Equities Positive on Central Bank Policy Stimulus Cues

August 20, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: Brexit, equities, Sino-U.S. trade talks

Central bank cues underpin market bulls while Trump’s comments on keeping trade deal un-signed until Hong Kong protests are resolved caps gains.

Summary: Global stock market is seeing positive price action today on receding fears surrounding the possibility of economic recession and central bank stimulus cues. Following last week’s cues on fresh German government announcement of plans to ditch balanced budget to counter recession outcome, cues from Chinese central bank’s key interest rate reforms also added a positive influence to investor sentiment boosting risk appetite in the market.

Following positive opening and price momentum in major benchmark indices and key risk assets in the Asian market, European market took on cues from the Asian market and saw positive price action in risk assets. Further, gains in Deutsche bank shares also added strength to market bulls in European market hours helping key European benchmark indices to trade positive today. In forex markets, USD recovered strength and gains were capped in check, but prevalent risk appetite underpinned major currencies resulting in mixed activity among top forex pairs.

Precious Metals: Precious metals are seeing dovish price action today. Both Gold and Silver traded with dovish bias as USD regained strength owing to a recovery in US T.Yields while the boost in broad-based risk appetite also added to decreasing demand for safe-haven assets.

Crude Oil: Crude oil is trading positive in the global market today as economic outlook stabilized on central bank stimulus cues. Further, news of drone attack on Saudi Oil field also affected demand to supply ratio skewing price in favor of crude oil bulls.

AUD/USD: The pair is trading with dovish bias today despite the rise in 10-yr Australian government bond yields. The dovish influence comes from Trump’s comments hinting at a delay in the trade deal and a rebound in USD weighing down AUD bulls, and it is likely to continue trading in red for the rest of the day.

On The Lookout: In the immediate future, all eyes are focused on proceedings of Sino-U.S. trade negotiation related headlines. US President Donald Trump and white house officials downplayed recession worries in US market commenting impact of China-U.S. trade war hasn’t caused a major impact on US economy and that sales/consumption/demand still continue to rise, hinting at flourishing on positive business activity. While Trump also mentioned talks between US and China negotiators which could lead to meet in the USA later this month leading to an end in trade war, he said he is also not interested in signing a trade deal at the moment and wants Hong Kong protests to be resolved first as he believes it will help the US gain more benefits once a trade deal is signed.

Brexit seems to be heading towards hard Brexit outcome, but UK remains unprepared given the leak of operations Yellowhammer details and lack of fast response team to keep economy intact while the PM remains steadfast on the exit date. Today’s calendar is silent on release front during North American market hours. However, central bank stimulus cues and positive investor sentiment influenced cues from international market are likely to keep major assets in US market in bulls’ territory.

Trading Perspective: As USD remains strong owing to a recovery in US T.Yields, risk appetite influenced positive support for major global currencies are offset by USD bulls. This suggests the status quo will remain unchanged in the forex market in American market hours. US Index and stock futures trading in the international market saw positive action ahead of Wall Street opening on news of Trump’s talks with Apple CEO Tim Cook over the impact of a trade war on the firm. Broad-based investor risk sentiment is also expected to keep market bulls sustained in north American market hours, suggesting bullish price action on Wall Street today.

EUR/USD: The pair is trading positive in the global market despite mixed macro data outcome as positive equity market activity and German government decision to scrap balanced budget plan added strength to EURO bulls while USD’s rebound on recovery in US T.Yields kept gains in check. Traders now await fresh cues from US market for short term profit opportunities.

GBPUSD: The pair is trading in red as British Pound is pressured from multiple fronts. Increasing odds of no-deal Brexit, lead of yellowhammer operation details are major factors weighing GBP bulls. However, USD’s rebound on recovery in US T.Yields also kept GBP under pressure. Traders now await fresh cues from US market for short term profit opportunities.

USD/CAD: The pair opened with a dovish bias earlier in the day scaling multi-session lows near mid 1.32 handle as Crude oil grew strong on news of drone attack on Saudi Oil fields. However, the decline was offset by a recovery in USD owing to rise in US T.Yields which caused the pair to erase early losses and traded flat ahead of US market hours. Traders now await fresh cues from US market for short term profit opportunities.

Please feel free to share your thoughts with us in the comments below.

Nikkei Rebounds, Bitcoin Trades Above 10,000

August 19, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Bitcoin, Nikkei, Wall Street

Asian stocks are trading higher today mirroring the Wall Street rebound on Friday. The Hang Seng is trading 1.93 percent higher at 26,236, Nikkei225 in Japan is 0.64% higher at 20,547. The Shanghai Composite is trading 1.47 percent higher to 2,865, while in Singapore, the FTSE Straits Times index finished 0.52 percent lower to 3,132. Australian equities are trading higher; the ASX 200 is 0.83% lower to 6,458.

European equities started higher this week. DAX30 is 1.12 percent higher to 11,693, CAC40 is 0.77 percent higher at 5,337 while the FTSE MIB in Milan is trading 0.91 percent higher at 20,507. The London Stock Exchange is 0.87% percent higher to 7,179.

In commodities markets, crude oil trades 0.97 percent higher at $55.34 as traders turn cautious on recent trade war escalation and global growth concerns. Brent oil is trading 1.11% higher at $59.29 per barrel despite major oil producers agreeing to cut output. Gold started the week lower at 1.520, keeping the bullish momentum as the price holds above all the major daily moving averages. On the upside, strong resistance will be met at 1,524.11 recent high.

BTCUSD Daily Chart

In cryptocurrencies, Bitcoin (BTCUSD) is trading higher at 10,347, hitting the daily low at 10,247 and the daily high at 10,432. Bitcoin is trading below the 50-day moving average, and bulls need a break above to add to long positions. Immediate support for BTC stands now at $9,439, the low from July 30, while next support stands at 9,000. On the upside, strong resistance now stands at 13,138, the recent high and then at 13,500 round figure. Ethereum (ETHUSD) trades higher at 193, with capitalization now to 20.9 billion. On the upside, the immediate resistance stands at 317, Friday’s high while the support stands at 172 recent low, Litecoin (LTCUSD) also trades higher at 76.11. The crypto market cap now stands above $271.4 billion.

On the Lookout: The central bank of China has set the Yuan (USDCNH) reference rate at 7.0312, versus Thursday’s fix of 7.0268.

The New Zealand Business NZ PMI came in at 48.2 below forecasts of 51.8 in July.

Japan Foreign Investment in Japan Stocks increased to ¥-187B on August 9 from previous ¥-339.9B.

Trading Perspective: In forex markets, USD trades 0.05 percent higher at 98.20, the Aussie dollar trades 0.11 percent higher at 0.6784, while Kiwi traded lower to 0.6435.

AUDUSD Daily Chart

GBPUSD trades 0.22% higher at 1.2122. Major support now stands at 1.2014 the low from yesterday which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2438, the 50-day moving average, while more offers will emerge at 1.2672, the 100-day moving average.

In Pound futures markets, open interest increased by 5.100 futures contracts, while volume increased by 28.900 contracts.

EURUSD started the week 0.02% higher at 1.1092, after Oli Rehn’s dovish comments. Immediate resistance for the pair stands at 1.1105, the 50-hour moving average and then at 1.1138 the 100-hour moving average. On the downside, immediate support stands at 1.1069, the low from August 2.

In Euro futures markets, open interest increased by 2,200 futures contracts, volume decreased by 0.000 contracts.

USDJPY is trading 0,05% higher at 106.38 having hit the daily low at 106.22 and the daily high at 106.46. USDJPY pair will find support at 105. On the upside, immediate resistance for the pair now stands at 107.67, the 50-day moving average, and then at 109.11, the 100-day moving average.

USDCAD is trading 0.05 higher at 1.3270; 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 1.3324, the daily high before an attempt to 1.3450 high from 31st May.