Asian markets finished mostly higher today despite the fact that the USA has officially today increased the tariff rate from 10% to 25% on $200 billion of imports from China while the Chinese government released a statement, saying it “deeply regrets that it will have to take necessary countermeasures.”
The Nikkei225 lost 0.27 percent to 21,344 the Hang Seng benchmark in Hong Kong finished 1.01 percent higher at 28,392. The Shanghai Composite outperformed climbing more than 3 percent to 2,939, while in Singapore, the FTSE Straits Times index finished 0.23 percent higher at 3,276. Australian stocks finished a choppy session in positive territory, the ASX200 managed to recover, finishing the session up 15 points or 0.25% to 6,310. Over the week, the index was down 0.4 percent.
European session also started higher mirroring Asian indices and US futures. The DAX30 is 1.04 percent higher to 12,099 and CAC40 is 0.94 percent higher at 5,363 while the FTSE MIB in Milan is trading 1.04 percent higher at 21,032. The London Stock Exchange is adding 0.60 percent to 7,250 despite the United Kingdom Gross Domestic Product (MoM) registered at -0.1%, below expectations (0%) for March.
In commodities markets, the Cboe WTI volatility Index jumped around 10%, as crude oil trades higher today at 62.15 as investors eyes turn to geopolitical tensions. Brent oil adds almost a dollar to $70,80 per barrel. Gold holds the 1280 figure and trades 0.06 percent higher at 1285 level. XAUUSD technical picture starts to improve, and now the support stands at the 200-day moving average down to $1251, which if broken can accelerate the downward move to 1200 as sellers will take full control. Strong resistance stands at 1293 and the 100-day moving average, and then the $1300 round figure.
In cryptocurrencies market, Bitcoin (BTCUSD) whose market capitalization accounts for more than half of all other cryptocurrencies breaks above the 6,000 resistance and trades higher for a fourth straight day at 6,313 as bulls are in the driver’s seat. The daily low for BTC was at 6,058 and the daily high at 6,328. BTCUSD’s immediate support stands at the 50-hour moving average at 5,869 while the next strong support stands at the $5,759 level, the 100-hour moving average, and then at the 5000 round figure. On the upside, strong resistance stands at 6,328 the high from the Asian session. Ethereum (ETHUSD) mirrors BTC higher and adds 3 dollars to 172 holding well above the 50-day moving average at 138. On the upside, the immediate resistance stands at 185 the 200-day moving average, while Litecoin (LTCUSD) trades higher at 76.10. The crypto market cap holds above $173.0B.
On the Lookout: China has vowed to retaliate after the US administration lifted tariffs on Chinese goods to 25% from 10%. China said it “deeply regrets” the move and will have to take “necessary counter-measures.”
The Reserve Bank of Australia today cut its near-term economic growth forecasts while leaving its longer-term expectations unchanged. The RBA said it now expects annual GDP growth to June of 1.75% compared to the 2.25%, while the December target has been downgraded from 3% to 2.75%.
In the North Atlantic economic calendar, the US data on consumer prices is scheduled to be released along with the monthly budget forecast.
Trading Perspective: In forex markets, the US dollar is trading 0.02 lower at 97,16 as traders digest the developments in US-Sino trade war. 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 recovers from yesterdays low and trades at 0.6992 as the bears are in full control, and the present decline can extend towards 61.8% Fibonacci expansion level of moves since April 23, at 0.6940, a break of that level can force prices lower to 2016 lows at 0.6920. Kiwi also trades higher to 0.6590 as it continues its corrective bounce.
GBPUSD consolidates and holds the 1.30 in 30 pips trading range amid Brexit uncertainty hitting the daily low at 1.2991 a figure that also tested yesterday. On the downside, major support will be found at 1.2960 and then at 1.2830, the support line from February. On the upside, immediate resistance stands at 1.3096 the 50-day moving average.
In Pound futures markets the open interest dropped by just 420 contracts on Thursday. Volume followed suit, shrinking by nearly 11.4K contracts, reaching the second drop in a row
EURUSD is in a process to touch yesterday high during early European and trades at a daily high around 1.1230. The pair made the Asian high at 1.1234 and the low at 1.1213. Immediate support can be found at 1.1180, the 200-hour moving average, while more solid support can be found at the yearly low at 1.1115. On the upside, the immediate resistance stands at 1.1236, the bottom of the horizontal resistance line from the three-month trading range, while more offers will emerge at 1.1268 at the 50-day moving average.
In the euro futures market, open interest rose by nearly 4.5K contracts on Thursday while volume increased for the third consecutive session, this time by around 43.4K contracts.
USDJPY is trading below the 110 level for the second day as traders turn their eyes to safe assets amid renewed China-USA trade. Today the pair hit the low at 109.61 and the high at 110.00. The pair will find support at 109.61 the Asian session low. On the upside, immediate resistance for the pair stands at 110 round figure and then at 110.61, the 100-day moving average, and then at 111.33, the 50-day moving average.
In Yen futures, the open interest rose for the first time after two consecutive daily pullbacks, this time by around 3.5K contracts. On the opposite side, volume extended its uptrend, rising by around 22.1K contracts.
USDCAD is trading lower today at 1.3453 as buyers look exhausted above 1.35 zone and stronger prices in crude oil, Canada’s main export item seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 100-day moving average around 1.3335 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at 1.3490 the Asian session high while a break above can escalate the rebound towards the 1.35 round figure.