Asian stocks finished mixed for one more day closing the first negative week for the month, on worries that China has put any further stimulus on hold as the economy shows signs of recovery and Europe continues to struggle under the weight of weaker economic data and political uncertainty. The Nikkei225 main index lost 0.22 percent to 22,258, the Hang Seng benchmark in Hong Kong finished 0.01 percent higher at 29,559. Japanese markets are closing for ten consecutive days after today. Chinese stocks finished lower, with Shanghai Composite underperforming, finishing 1.20 percent lower at 3,086, and in Singapore, the FTSE Straits Times index finished 0.02 percent higher at 3,350. Australian equities ended a holiday-shortened week on a flat note with the ASX200 closing 3.5 points higher to 6385.6 on Friday. It was a quiet session with the index trading in a tight range of 26 points for the entirety of the session. Despite the flat finish, the top 200 stocks still managed to close out the week 2% higher.
European session started mixed with traders focus on a steady stream of corporate results from US corporate heavyweights and the Q1 GDP reading from the US. DAX30 is 0.06 percent higher to 12,289, CAC40 is 0.15 percent higher at 5,565 while FTSE100 in London is 0.20 percent lower at 7,419, and the FTSE MIB in Milan is trading 0.38 percent lower at 21,638.
In commodities markets, crude oil finally retreats from five-month high giving up one dollar at 64.92 as markets digest the US additional sanctions on Iran. Oil industry analysts expect that the sanctions could potentially remove up to 1.2 million barrels of oil per day from international markets. The near-term upside target that we have at the 65.00 figure has materialized and now the $67 area is the next target as the bullish momentum builds up. Brent oil outperforms today trading slightly lower at $74,27 per barrel. Gold bearish momentum is still intact with the precious metal trading at $1281 figure hitting yesterday a new yearly low at $1267. XAUUSD’s technical picture is negative, and now the support stands at the 200-day moving average down to $1249, which if broken can accelerate the downward move to 1200 as sellers are in full control. Strong resistance stands at the $1300 round figure and then at the 50-day moving average around $1305.
In cryptocurrencies market, Bitcoin (BTCUSD) whose market capitalization accounts for more than half of all other cryptocurrencies combined, lost over 300 dollars from yesterdays high at $5,600 (five-month high), and trades at 5,145 as another scandal hit the wires with missing funds which will total circa USD 850 million. The New York Attorney General has taken action against Bitfinex and crushed crypto investor’s sentiment. Hong Kong-based iFinex Inc., which operates the Bitfinex cryptocurrency exchange and owns Tether Ltd., has been commingling client and corporate funds to cover up the missing funds, which occurred in mid-2018 and hadn’t been disclosed publicly. The daily low for BTC was at 4,937 and daily high at 5,495. BTCUSD’s immediate support stands at the 200-day moving average at 5,091 while next strong support stands at the $5,000 level and then at the daily low at 4,937, on the upside, strong resistance stands at 5600 the recent high. Ethereum (ETHUSD) is lower for the second day giving up over 10 dollars at 151 but holding above the 50-day moving average at 138, facing the immediate resistance at 185, the 200-day moving average, while Litecoin (LTCUSD) trades flat at 71.47. The cryptocurrencies market cap holds above $160.0B.
On the Lookout: The People’s Bank of China (PBOC) set the yuan reference rate at 6.7307 vs the previous day’s fix of 6.7307.
The France Consumer Confidence came in today at 96, below expectations (97) in April, one more disappointment from Europe, yesterday, and the German IFO business climate index came in at 99.2 in April, weaker than last month’s 99.6 and below the consensus estimates pointing to 99.9. The current economic assessment also missed estimates, arriving at 103.3 points in April as compared to last month’s 103.8 and 103.6 anticipated. The IFO Business climate index points to German economic growth being weaker than 0.8 percent forecast with the German industrial sector dragging down the economy.
The big focus on the US macro front will be the first-quarter US GDP data at 13:30GMT, analysts are expecting a reading of 2.1%.
Trading Perspective: In FX markets, the US dollar holds to recent gains for the third straight day at 97,89 figure supported by stronger US housing market data. 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 rebounds after yesterday Q1 CPI data disappointed investors, AUDUSD tested the 0.70 zone and managed to rebound slightly to 0.7022 as cash rate futures now see a 71.0% probability of a rate cut in next RBA meeting coming in two weeks. Kiwi outperformed the Aussie and trades higher at 0.6640.
GBPUSD managed to find support for the second day at 1.2880 area, the two-month lows and started a slow recovery above 1.29. On the downside, major support will be found at 1.2880 the low from yesterday and then at 1.2830 the support line from February. On the flipside, immediate resistance stands at 1.2961 the 200-day moving average.
EURUSD made a new 22 month low at 1.1115 yesterday a level we haven’t seen since June 2017 as sellers are in full control. The pair made the Asian high at 1.1147 a lower high and the low at 1.1123. Immediate support can be found at 1.1115 the yearly low from yesterday, and further bids will emerge at 1.11 round figure. On the upside, the 50-hour moving average is the immediate support at 1.1156 while more offers will emerge at 1.1198, the 100-hour moving average.
USDJPY continues its consolidation around the 111.80 zone, after failing to hold above the 112 level that managed to break yesterday. Today the pair hit the low at 111.44 and the high at 111.78. Major support for the pair stands at 111.51, the 200-day moving average, and then at 111 round figure if the pair manages to break below the 100-day simple moving average at 111.10. Immediate resistance for the pair stands at 112.18 the April 2019 high.
USDCAD retreats from 16 weeks high, after dovish Bank of Canada and trades at 1.3480. The pair will find immediate support at the 100-hour moving average around 1.3432 while extra support stands at 1.3396 and the 200-day moving average which if breached will drive prices down to 1.33 key support. On the upside, immediate resistance stands at 1.3570 a break of which can escalate the rebound towards 1.3630.