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.