European equities saw positive price action today on Adidas earnings and bank stocks rally influenced momentum. Traders now await US macro data updates for short term profit opportunities and directional cues to place major long term bets.
Summary: Asian equities today saw yet another session of dovish price action as trading session came to close for the week. US Wall Street saw major benchmark indices and equities give up early gains and close in red as decline in crude oil price in the global market induces a sharp slide in energy stocks in US market. Dovish cues from US influenced dovish price action in Asian market amid holiday thin trading activity in the market. This has caused investor sentiment to see sharp bearish nose dive in the global market. European market saw divided price action in major benchmark indices and equities as trading session opened for the day. But gains in Bank sector shares and Adidas earnings update influenced rally boosted risk appetite in European markets causing most major benchmark indices to trade in green in mid-late European market hours. USD gained strength in broad market on broad based risk aversion causing major forex pairs to trade range bound as trading session closes for the day.
Precious Metals: Both gold and silver are trading range bound with slight positive bias today. But there is no visible gain as upside move is capped around 0.25% to 0.65% increase in value. Amid holiday thin trading volume and divided investor sentiment, gold is set for worst weekly decline in nearly 5 weeks today.
Crude Oil: Crude oil is seeing positive price action in global market today with both major international benchmarks trading positive. Despite three of five trading sessions seeing crude oil price action trade positive, increased output from US offsets OPEC supply cut enforcement induced supply to demand ratio resulting WTI on path for dovish weekly closing today.
AUD/USD: The pair is trading near 4 months lows around 0.70 handle in late European market hours. US Greenback’s gains in the broad market post Fed update earlier this week continues to put some level of pressure on AUD bulls which combined with disappointing Australian house market data resulted in the pare trading range bound today.
On The Lookout: The latter half of this week has so far experienced dovish price action in major global markets. Risk appetite has taken a serious hit resulting in overall equity price action remaining dovish despite geo-political events namely Brexit and Sino-U.S. trade talks seeing progress in favorable direction. European market’s macro calendar updates saw mixed outcome but failed to have any visible impact on price action of major equity assets and the common currency. Moving forward, as trading session comes to close for the week, all eyes turn towards US macro data updates for short term profit opportunities and directional cues. US macro calendar will see the release of Goods trade balance, Nonfarm payroll, Unemployment rate, Manufacturing PMI, Markit Composite PMI and Services PMI, ISM non-manufacturing PMI and speech by FOMC member Williams later in the day.
Trading Perspective: Given prevalent dovish price action in Wall Street off late, US market is likely to see subdued opening. Given the horde of high impact macro calendar updates in US economic calendar both US Equities and major forex pairs are likely to see highly volatile price action as trading session comes to close for the week.
EUR/USD: The pair is trading near intra-day lows as USD remains strong on post FOMC update influenced rally. Better than expected Euro area CPI data failed to have any visible impact on price action of the pair. Investors are likely to place short term traders on event filled calendar schedule before placing major bets based on directional cues from US NFP & PMI updates as trading session closes for the week.
GBP/USD: The pair traded range bound with slight bearish bias as USD remains strong on FOMC update induced strength. Lack of further updates on Brexit progress in UK resulted in GBP losing its bullish strength. Investors now await US macro data updates for short term profit opportunities and directional cues for placing long term bets.
USD/CAD: The pair trades with strong positive bias resulting in sharp upward move earlier in the day. The pair has mostly held steady near intra-day highs awaiting US macro data updates. Positive crude oil price did little to affect price action as positive influence surrounding USD favoured upward price action in the pair. Traders are now on lookout for US macro data updates for short term profit opportunities and directional cues for placing long term bets.