Chinese policy easing cues, healthy risk appetite in the market underpin market bulls supporting positive price action. Traders now await US inflation data for short term directional cues.
Summary: Global market is continuing its positive price activity for second consecutive session this week while geo-political issues simmer in the background. Asian markets gained positive momentum on headlines from China hinting at easing financial rules and policy tweaks. Further, lingering influence from US decision to hold off on import tariff for Mexican goods also provided positive cues. Healthy risk appetite, positive cues from US and Asian markets, Chinese policy tweak updates helped European equities open positive and trade with bullish bias today. On Forex front, mounting bets surrounding possibility of rate cut by US Federal Reserve continues to cap USD ahead of upcoming G20 meeting which will see China and US presidents meet face to face since their last meeting in December 2018. Weak USD and healthy risk appetite underpin market bulls supporting positive price action in forex market.
Precious Metals: Precious metals exhibit mixed price activity in the global market today. Despite weak USD in the broad market, prevalent risk appetite in the market has capped demand for yellow metal resulting in gold spot and future price trading in red with post prices hitting new weekly lows near $1320 level, while cheaper rates surrounding silver has helped the metal retain positive price action.
Crude Oil: Chinese policy stimulus and healthy risk appetite hint at strong demand for crude oil helping liquid gold trade positive in the market. While Sino-U.S. trade war continues to weigh down crude oil to some extent, OPEC’s decision to extend production and supply cut enforcement and efforts to get non-OPEC members such as Russia to comply with its decision also provides crude bulls with positive support.
AUD/USD: The pair is trading range bound today and lacks a clear directional bias. AUD bulls failed to gain momentum despite strong business confidence report and positive cues from china. Meanwhile weak USD in the broad market remains the driving force behind the pair’s momentum today. The remains struck near mid-0.69 handle and needs to make a clear breakout above 0.70 for bulls to gain price momentum.
On The Lookout: Investors focus for the day remains on US inflation data scheduled to release later today. The week ahead lacks major events on geo-political scale which could affect the overall price momentum of the pair significantly. Chinese stimulus in form of policy easing may have provided positive influence in short term but lacks impact to provide a long term solid bullish fundamentals for the market bulls. Tension surrounding Brexit uncertainties, race for power in UK’s political world continues to heat up with Tory leadership announcing names of top 10 contenders. Also, Trump’s trade war with Europe and China still remains unresolved keeping bears fundamentally supported and ready to pounce on opportunity as investor caution still remains active to some extent in the global market.
Trading Perspective: Positive headlines and macro data influenced momentum are the main driving force behind overall market momentum today. Chinese stimulus and positive investor sentiment in the global market helped US index and stock futures trading in the international market retain its positive momentum from last night and given price action in Asia and Europe, there is strong possibility for Wall Street to trade in green as well unless a major headlines or update from US disrupts overall momentum.
EUR/USD: The pair is trading positive with signs of strong bullish bias having managed to breach above resistance level of 1.1300 and gaining strong support near 1.1302/05 handle. US-DE bond yield spread difference dropped to 18 month lows earlier in the day which added strength to EURO bulls in the market. Traders now await US inflation data update for short term profit opportunities.
GBP/USD: The pair is trading positive in the global market as weak USD overshadowed bearish influence surrounding GBP acting as main driving force behind today’s momentum. Upbeat UK average earnings data which showed growth strengthened GBP bulls while raising fears of no-Brexit deal given top 10 contender list for PM and other disappointing UK data updates capped gains. Traders now await US inflation data update for short term profit opportunities.
USD/CAD: The pair is trading positive but gains are capped owing to weak USD in the broad market. Positive crude oil price and healthy risk appetite among investors provided some support for CAD bulls. But USD managed to retain hold near price levels gained from overnight rebound activity despite remaining near multi month lows. Traders now await US inflation data update for short term profit opportunities.