Forex and Equity Markets Quiet Ahead of China-USA Trade Talks

Asian Indices and Nikkei 225 benchmark in Tokyo ended higher today as China-USA trade talks resume in Washington. Fed Chair Jerome Powell signalled further interest rate cuts and the resumption of bond purchases. The US-China relations is set to be the key driver of sentiment over the coming days with the trade delegation meeting later today.

Traders increased their bets that 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 ended 0.45% higher at 21,551, the Hang Seng index is trading 0.10% higher at 25,707. The Shanghai Composite is 0.78% higher at 2,947, while in Singapore, the FTSE Straits Times is 0.01% lower at 3,089. The ASX 200 in Australia ended flat at 6,547.

European indices started the day higher. DAX is trading 0.07 higher at 12,103, CAC40 is 0.24 per cent higher at 5,512 while the FTSE MIB in Milan is 0.19 per cent lower at 21,493. In London, FTSE 100 is trading 0.18% lower at 7,154. The UK is scheduled to leave the EU on October 31.

In commodities markets, crude oil trades 0.42 per cent lower at $52.37 as global growth worries weigh on crude oil. Brent oil is trading 0.48% lower at $58.04 per barrel as the world’s oil supply will be affected by the global slowdown. Gold trades higher at 1,508, as the momentum turns bullish after the price trades above 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’s (BTCUSD) momentum is bullish now as BTC trades higher at 8,520, hitting the daily low at 8,475 and the daily high at 8,650. Bitcoin’s short term momentum is bullish now as it trades above the 50 and 100-day moving average. Immediate support for BTC stands now at $7,686 recent low, while next support stands at 7,406 the low from June 2nd. On the upside, strong resistance now stands at 8,650, the daily high, and then at the 9,000 round figure. Ethereum (ETHUSD) trades higher at 188,08 with capitalisation now to 20.47 billion, and 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 57.38. The crypto market cap capitalization now stands above $228.93 billion.

On the Lookout: Investors await the CPI m/m and the Core CPI m/m at 12:30GMT. Initial Jobless Claims and Continuing Jobless Claims are also to be released at 12:30GMT. The New Housing Price Index m/m is the main event for Canada today due at 12:30GMT.

China-USA Trade Talks
AUDUSD Daily Chart

Trading Perspective: In forex markets, USD index trades 0.42 per cent lower at 98.70, the Aussie dollar trades 0.62 per cent higher at 0.6765, while Kiwi trades 0.62% higher at 0.6331.

GBPUSD trades 0.36% higher at 1.2249 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 1.2409, the 100-day moving average while more offers will emerge at 1.2711, the 200-day moving average.

In Pound futures markets, open interest decreased by 1,100 contracts, volume decreased by around 13.600 futures contracts.

EURUSD trades 0.53% higher at 1.1029, as the pair makes an attempt to break out of the descending channel. Immediate resistance for the pair stands at 1.1049 the 50-day moving average and then at 1.1144, the 100-day moving average. On the downside, immediate support stands at 1.0972 today’s low and then at 1.0835 the low from 2017.

In euro futures markets, open interest increased by 750 contracts, volume decreased by around 47.500 futures contracts.

China-USA Trade Talks
EURUSD Daily Chart

USDJPY is trading 0.06% lower at 107.41 having hit the daily low at 107.02 and the daily high at 107.76. 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 decreased by 897 contracts, volume decreased by around 36,000 futures contracts.

USDCAD is trading 0.24% lower at 1.3300 and the pair will find immediate support at 1.3017 the YTD low, while extra support stands at the 1.30 round figure. On the upside, immediate resistance now stands at the 1.3356, the high from September 3rd before an attempt to 1.3450 high from 31st May.