Markets Calm Ahead of US-China Trade Talks

Asian Indices and Nikkei 225 benchmark in Tokyo ended lower today after China said it would retaliate against the US for blacklisting Chinese technology companies for human rights violations against Muslim minorities.

FedChair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. The US-China trade talks is set to be the key driver of sentiment over the coming days with the trade delegation meeting on Thursday. Traders increased their bets the Fed will slash interest rates at its next meeting on October to protect the economy from slowing growth and the effects of the trade tensions.

The Nikkei is down 0.64% at 21,450, the Hang Seng index is trading 0.7% lower 25,698. The Shanghai Composite is 0.02% lower at 2,912 while in Singapore the FTSE Straits Times is 0.63% lower at 3,091. The ASX 200 in Australia trading lower after a three-day winning streak, trading 0.71% lower at 6,546.

European indices started the day higher. DAX trading 1.06 higher at 12,096, CAC40 is 0.71 per cent higher at 5,495 while the FTSE MIB in Milan is 0.69 per cent higher at 21,554. In London, FTSE 100 is trading 0.36% higher at 7,169. The UK is scheduled to leave the EU on October 31.

In commodities markets, crude oil trades 0.95 per cent higher at $53.13 as global growth worries weigh on crude. Brent oil is trading 0.91% higher at $58,77 per barrel as oil world supply will be affected by the global slowdown. Gold trades higher at 1,503, as the momentum turns neutral after the price trades below the 50-day moving average. On the upside, strong resistance will be met at 1,555.13 recent high while support is at 1,458 the recent low.       

In cryptocurrencies, bitcoin (BTCUSD) momentum is neutral now as BTC trades higher at 8,184, hitting the daily low at 8,036 and the daily high at 8,213. Bitcoin short term momentum is neutral now as it trades between the 50 and 100-day moving average. Immediate support for BTC stands now at $7,686 recent low, while the next support stands at 7,406, the low from June 2nd. On the upside, strong resistance now stands at 8,412 and then at 9,000 round figure. Ethereum (ETHUSD) trades higher at 181,08 with capitalisation now to 19.79 billion, on the upside, the immediate resistance stands at 317 high while the support stands at 136 the low from May 6th, Litecoin (LTCUSD) trades higher at 57.02. The crypto market cap capitalization now stands above $223.18 billion.

On the Lookout: Australia Westpac Consumer Confidence came in at -5.5% in October from previous -1.7%. Japan Machine Tool Orders (YoY) came in at -35.5% (September) vs -37.1%.


Trading Perspective: In forex markets, USD index trades 0.15 per cent lower at 98.96, the Aussie dollar trades 0.28 per cent higher at 0.6747, while Kiwi trades 0.38% higher at 0.6321.

GBPUSD trades 0.10% higher at 1.2230 as we are getting closer to the Brexit deadline. Major support now stands at 1.2078 recent low which if broken, might accelerate the slide further towards 1.20. On the upside, immediate resistance now stands at 1.2447 the 100-day moving average while more offers will emerge at 1.2729 the 200-day moving average.

In Pound futures markets open interest increased by 3,200 contracts, volume increased by around 47.900 futures contracts.

EURUSD trades 0.28% higher at 1.0986, as the pair trapped in the descending channel that might drive the price lower. Immediate resistance for the pair stands at 1.1051 the 50-day moving average and then at 1.1144 the 100-day moving average. On the downside, immediate support stands at 1.0948 today’s low and then at 1.0835 the low from 2017.

In euro futures markets open interest increased by 5,100 contracts, volume increased by around 58.400 futures contracts.

US-China Trade Talks
USDJPY Daily Chart

USDJPY is trading 0.21% higher at 107.30 having hit the daily low at 106.92 and the daily high at 107.40. USDJPY pair will find support at 104.44 the low from August 23rd. On the upside, immediate resistance for the pair now stands at 108.46 the high from September 19th, and then at 109.06 the 200-day moving average. 

In Yen futures markets open interest increased by 867 contracts, volume increased by around 38,100 futures contracts.

USDCAD is trading 0.18% higher at 1.3306 the pair will find immediate support at 1.3017 the YTD low while extra support stands at 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356 high from September 3rd before an attempt to 1.3450 high from 31st May.  

US-China Trade Talks
USDCAD Daily Chart