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GBPUSD in search for support, Bears control EURUSD

Asian markets finished lower today amid global politics and geopolitical uncertainty. The Nikkei225 finished 0.14 percent lower to 21,272; the Hang Seng benchmark in Hong Kong finished 0.10 percent lower at 27,756. The Shanghai Composite outperformed adding 1.23 percent to 2,903 while in Singapore the FTSE Straits Times index finished 0.49 percent lower at 3,188. Australian stocks managed to recover earlier losses to finish higher for a fifth straight session, supported by gains in the Financial, Property Trusts and Telco sectors. The ASX200 gained 24 points or 0.4% to a fresh 11.5 year high of 6,500, having been down about 40 points in the first hour of trade.

European session started on positive tones amid geopolitical concerns and the upcoming election in EU, the DAX30 is 0.51 percent higher to 12,104, and CAC40 is 0.10 percent higher at 5,364 while the FTSE MIB in Milan is trading 0.55 percent lower at 20,653. The London Stock Exchange is adding 0.41 percent to 7,341 as the no deal Brexit scenario is back on the table.

In commodities markets, crude oil trades flat at 63.58 near multi-week highs after mounting tensions in the Middle East. Brent oil trades lower at $72,28 per barrel. Gold stabilizes around the 1275 zone at the two weeks low. The precious metal breached the 100-day moving average, and that gave the control back to bears. XAUUSD’s technical picture is bearish now after yesterdays sell-off. Gold will find support at 1273, the April low, while more bids will emerge at the 200-day moving average at 1255, on the upside resistance, stands at 1296 the 100-day moving average.   

In cryptocurrencies market, bitcoin (BTCUSD) holds the weekend highs just below the 8,000 mark. The daily low for BTC was at 7,826 and the daily high at 8,143. BTCUSD breached the 50 and 100-hour moving average during the weekend and bulls took control for the short term. Immediate support for BTC stands at $7,644, the 50-hour SMA round figure, and then at the 200-hour moving average at 7,147. On the upside, strong resistance stands at 8,300, the high from the Asian session. Ethereum (ETHUSD) continues higher to 252, on the upside, the immediate resistance stands at 263, the high during the Asian session while the support stands at 236 and the 100 hour SMA, Litecoin (LTCUSD) adds one dollar to 91.51. The crypto market cap holds above $174.0B.

On the Lookout: RBA minutes released today from the May Board Meeting showed members said “a decrease in the cash rate would likely be appropriate” if the labour market did not improve. Hours later, while delivering a speech in Brisbane, RBA Governor Philip Lowe said the board “will consider the case” for an interest rate cut on June 4.

US technology companies have started cutting off supplies to China’s Huawei to comply with US president Trump’s executive order. These include Google, Intel Corp, Qualcomm, and Broadcom.

In the America economic calendar, we await the US existing home sales along with weekly chain store sales.

Trading Perspective: In forex markets, the US dollar trades higher at 97,95 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 started the week strong after Prime Minister Scott Morrison registered surprise victory in the general election, but the Asian session got a hit down to 0.6873 as RBA Governor Philip Lowe said the board “will consider the case” for an interest rate cut on June 4. Kiwi also trades lower touching the critical 0.65 mark.

GBPUSD Hourly (H1) Chart

GBPUSD continues south for one more day at three-month lows amid Brexit uncertainty. The pair hit the daily low at 1.2713 and the daily high at 1.2731. Bears are in full control now, and a dive below 1.27 looks possible searching for support at 1.2670, the January 15th bottom. On the upside, immediate resistance stands at 1.28 and then at the 50-hour moving average around 1.2830.

In Sterling futures, the open interest increased by around 7K contracts to their open interest positions on Monday, clinching the sixth build in a row, volume decreased by around 15.3K contracts.

EURUSD also trades at three-week lows at 1.1150. The pair made the Asian high at 1.1167 and the low at 1.1150. The pair breached all major moving averages last Friday and now is looking for support at the yearly low down to 1.1115. On the upside, the immediate resistance stands at 1.1200, while more offers will emerge at 1.1245, the 50-day moving average.

In euro futures, the open interest rose for the third session in a row on Monday, this time by nearly 3.1K contracts. Volume, instead, shrunk by almost 35.8K contracts, reversing the previous build.

USDJPY consolidates above the 110 and in a narrow trading range, as traders turn their eyes to safe assets amid renewed China-USA trade worries. Today the pair hit the low at 110.01 and the high at 110. The pair will find support at 109.54 Friday low. On the upside, immediate resistance for the pair stands at 110.31 the high from yesterday session and then at 110.50, the 100-day moving average and then at 111.17, the 50-day moving average.

In Yen futures, the open interest rose by 908 contracts at the beginning of the week, at the same time reversing seven consecutive daily drops. The volume extended the erratic performance and shrunk by around 37.2K contracts.

USDCAD is trading lower for the second day at 1.3422. The pair will find immediate support at the 50-day moving average around 1.3392 while extra support stands at the 1.3300 round figure. On the upside, immediate resistance stands at 1.35, while a break above can escalate the rebound towards the yearly high at 1.3635.

USDCAD Hourly (H1) Chart