AUD/USD Archives - The Industry Spread

G10 FX Volatility Stays Depressed, Dollar Ends Flat

April 18, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, EURO, euro area, Eurozone, G10 markets, GBP-USD, RBA, USD/CHF, USD/CNH, USD/JPY, USD/TRY

Summary: The Dollar Index (USD/DXY) closed little-changed (97.011) for the 3^rd day running. G10 FX volatility stayed depressed, at 5-year lows. China’s economy grew at 6.4% in Q1, slightly higher than analyst’s forecast of 6.3%. Chinese Industrial production and Retail Sales also beat expectations, but markets were cautious after recent slowdowns in import growth and automobile sales. The Australian Dollar jumped to a two-month high at 0.7206 before easing to close flat at 0.7173. Even the British Pound failed to excite following a softer inflation report. Sterling traded in a relatively tight 1.3029-1.3067 range, closing at 1.3040 (1.3047 yesterday). The Euro was modestly higher at 1.1290 from 1.1283 while USD/JPY settled at 112.05 (112.02). USD/CHF was the exception, extending gains to 1.0106 (1.0080), up 0.25%. Emerging Market currencies which have earned Investment banks more trading revenue than the G10 markets last year, extended gains versus the Greenback. USD/TRY (Dollar- Turkish Lira) fell 1.19% to 5.7250 (5.7650). The Offshore USD/CNH was changing hands at 6.6750 from 6.7135 yesterday.

Reuters Graphics – EM FX Revenues Outshine G10 – 18 April 2019

The slowdown in volatility in the major G10 markets were highlighted by an exclusive Reuters report. It showed that the 12 biggest investment banks made more trading revenue from Emerging Market currencies than the G10 counterparts last year.
Stocks eased and bond yields were steady. The US 10-year yield was unchanged at 2.59%.

EUR/USD – The Euro rallied to 1.13236 following the upbeat Chinese reports. The Single Currency then spent the rest of the trading session drifting lower after failing to break higher. EUR/USD closed at 1.1295.
AUD/USD – The Australian Dollar managed to have a little more life in it’s trading session yesterday. Upbeat Chinese data saw the Battler break above 0.72 cents hitting fresh two-month highs at 0.72058. AUD/USD then drifted lower to finish little-changed at 0.7173. Australia’s Employment data is released today.
USD/CHF – The Dollar continued to make headway against the Swiss Franc trading to a one-month high at 1.0110. Swiss Franc interest rates are currently the lowest among the Majors. Swiss 10-year bond yields closed at -0.29%.

On the Lookout: The low FX volatility will not linger for too much longer. Traders should be prepared (and hopeful) for a breakout attempt in the current Easter markets. With a lot of data out, we may be in for a change. Happy days ….
Today sees another data dump with Japanese Flash Manufacturing PMI’s to start off. Australia’s March Employment Change and Unemployment rate follow. National Australia Bank’s Quarterly Business Confidence Index is also released. Australia is expected to have added 15,200 Jobs from the previous 4,600. The Jobless Rate is expected to increase to 5.0% from 4.9%. Apart from AUD traders, the RBA will closely monitor this report.
Europe sees Swiss Trade Balance and German PPI data. Euro area and Eurozone Services and Manufacturing PMI’s follow. Production data in the Euro area is expected to have stabilised after a period of weakness in Q1. The UK, Canada and the US release their Headline and Core Retail Sales reports for March. US Flash Manufacturing and Services PMIs, Weekly Jobless Claims and Philly Fed Manufacturing reports round off the day’s data releases.

Trading Perspective: While the G10 FX volatility remained close to 5-year lows, traders should be prepared for a breakout. In a separate study, BNN Bloomberg noted that over the last 25 years, periods of low volatility have preceded a big move for the Dollar. Which is great for any currency trader, whether you are a Greenback bull or a bear. As an experienced former bank FX trader, this observation is accurate. A return to more volatile markets is not far away.

Daily FX EUR USD Chart – 18 April 2019

EUR/USD – The Euro has been holding on to the 1.1300 level for this week. Euro area PMIs will be closely watched by the markets today. Most of the reports are expected to beat forecasts. They will have to after the disappointment seen in Q1. The big levels EUR/USD remain 1.1250 and 1.1350. With market positioning still short Euro bets are multi-year highs, the risk is for a topside attempt. Immediate resistance can be found at 1.1330 followed by 1.1350. Immediate support lies at 1.1280 and 1.1250. Likely trading range today 1.1280-1.1330. Prefer to buy dips.
USD/JPY – This currency pair has grinded higher to the 112.00 level where is has settled in the past three trading days. Overnight high traded last night was 112.165, near 6-week highs. The climb in the US 10-year bond yield to its current 2.59% and a risk-on market profile has supported USD/JPY. However, it is struggling to make much headway from here.
Market positioning saw an increase in JPY short bets to -JPY 71,500 contracts from -JPY 62,700. The next likely move for USD/JPY is south. Immediate support lies at 111.80 followed by 111.50. Immediate resistance can be found at 112. 20 and 112.50. Likely range today 111.70-112.10. Look to sell rallies.
AUD/USD – the Australian Dollar came to life this week, falling to 0.7140 following the RBA minutes which was initially interpreted as dovish. The market changed its mind quickly and AUD/USD climbed to 0.7175. Upbeat Chinese data boosted the Battler to fresh 2-month highs at 0.72058 before drifting lower to close at 0.7175 for the 2^nd day running. Today’s Australian Jobs report will be closely watched by both traders and the RBA. Speculative market positioning in the Aussie remains short. Immediate support lies at 0.7140 and 0.7110. Immediate resistance can be found at 0.7210 and 0.7240. Keep an eye out on the EM currencies as well. If they stay elevated against the US Dollar, this will be Aussie supportive. Look to buy dips in a likely range of 0.7160-0.7210 today.

Wishing you the best for the Easter break. Happy trading all.

Equities Positive on Prevalent Risk on Investor Sentiment, Earnings Update Eyed For US Trading Cues

April 18, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: Asian market, AUD/USD, Crude Oil, EIA weekly, investor sentiment, S&P 500 index, US Indices

Positive cues from previous session in US Wall Street, upbeat Chinese GDP data helped keep risk appetite high underpinning positive price action in the global market ahead of Wall Street opening today.

Summary: Major equities across Asian and European markets saw positive price action today. Wall Street last night closed positive on influence gained from Qualcomm shares spiking over 20% over surprise settlement with Apple. A bout of positive earnings update which beat estimates from major analysts was also major contributing factor to Wall Street’s positive price action. Asian market also saw positive price action in all major stock exchanges with positive investor sentiment, risk appetite and market bulls receiving positive support from positive Chinese GDP data. However, fall in metal and mining sector shares in Australian market saw Australian benchmark indices close in the red. Optimism for positive progress in trade talks, positive cues from Asian and European markets, healthy risk appetite among global investors served as fundamental support influencing positive price action in European equity market. Prevalent risk on investor sentiment was also reflected in price action of major global currency pairs across Asian and European market hours.

Precious Metals: Gold fell sharply and settled well near four month lows today as positive Chinese GDP and positive cues from US Wall Street boosted risk appetite in the global market. While risk on investor sentiment has been prevalent in Asian and European markets, capping price action of safe haven assets, Silver is range bound price action with relatively positive bias with weak USD providing further support to white metal.

Crude Oil: Crude oil price stabilized late yesterday as supply woes finally gave crude bulls a strong push to move price to positive territory. A sharp drop in API weekly crude oil stockpile data from USA, positive Chinese GDP data which is viewed as signal for possible increase in import demand served as trigger for further upside movement in early trading session post which crude oil has held fort near intra-day highs across European market hours.

AUD/USD: The pair saw sharp rise to 8-week highs during Asian market hours as Chinese GDP data saw better than expected readings. Australian market being linked to China via trade ties got a solid boost fuelling AUD’s rally, but the pair soon feel from multi week highs and is trading back below 0.7200 handle as influence from Chinese GDP eased in the global market.

On The Lookout: While equities and Forex market are seeing positive price in European market hours, positive momentum is slowing down ahead of Wall Street opening. Disappointing UK inflation data and neutral Euro area CPI data have caused positive investor sentiment to take a hit. With earnings season dictating short term price action and geo-political events controlling long term price trends of major risk assets, macro data updates controls intra-day price activity. As Easter approaches, day traders are likely to book profits which could result in short term trend breakouts in major assets in the trading sessions the week ahead. Forex markets are seeing price action trapped in range regardless of short term bias as lack of progress in geo-political events has left major risk assets trading in familiar levels. Late European market hours will see speech by BOE governor Mark Carney while Canadian calendar is set to see the release of trade balance and CPI data. US calendar doesn’t have any major impact updates aside from EIA weekly crude oil stockpile data. This suggests price action in the market is likely to be controlled by broad based investor sentiment.

Trading Perspective: Positive earnings updates, bullish cues from Asian and European markets are likely to influence positive price action in US Wall Street. Earnings reports will continue to dictate price action in Wall Street.

US Indices: US benchmark index futures trading in the international market saw positive price action. Positive cues from previous session, healthy investor risk appetite, positive Chinese macro data are some of the major factors driving price action in the international market today. A positive price action in US equity market today could influence S&P 500 index to test yearly highs once again today, but price action is likely to be controlled by broad based investor sentiment which could reflect earnings report updates. United Rentals, Pepsico, Morgan Stanley and Abbott Labs are some of the earnings reports investors are on lookout for today.

EUR/USD: The pair saw sharp upward price action in Asian market hours on healthy risk appetite and positive Chinese GDP data. However, neutral Euro area macro data and dovish UK inflation data weighed down the common currency causing the pair to erase most of early gains and taking on dovish price action. A fall below 1.1300 is highly likely but the pair could find strong support near mid-1.12 handle above which the pair will trade range bound for rest of today’s trading session.

USD/CAD: Canadian Dollar gained positive bias following draw in US weekly API crude oil stockpile data. Further, a boost in crude oil price in the global market pushed the pair to the downside keeping strong pressure on USD. Positive Chinese macro data and prevalent risk on investor sentiment also capped USD bulls supporting Canadian Dollar. Investors now await Canadian CPI, trade balance data updates and US EIA crude oil weekly stockpile data for short term profit opportunities and directional trading cues.

AUDUSD Eyes 0.72, Gold Continues South

April 17, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, AUD/USD, banks, Bitcoin, Brexit, Brokers, Cryptocurrencies, ECB, economy, financial services, Fitch Ratings, FX trading, monetary policy, OPEC, RBA, trading platform

Asian stocks finished higher close to nine months highs, as investors sentiment was supported by strong Chinese industrial production numbers and better GDP data. In Japan, the Nikkei225 main index added 0.25 percent to 22,277, the highest since December 4th, 2018. The Hang Seng benchmark in Hong Kong finished 0.02 percent higher at 30,109. Chinese stocks also finished higher, with Shanghai Composite finishing 0.33 percent higher at 3,264, and in Singapore, the FTSE Straits Times index finished 0.45 percent higher at 3,347. Australian equities submitted to sellers and ASX 200 index ended lower by 12 points or 0.2%. The ASX 200 continues to trade on lighter volumes with school holidays and the Easter long weekend coming up.

In commodities markets, Crude oil continues north after a two-day consolidation at five months high, the black gold as of writing trades at 64.48 boosted by OPEC’s ongoing supply cuts, geopolitical uncertainty and the US additional sanctions on Iran. During the weekend, Russia’s Finance Minister Anton Siluanov said that Russia and OPEC might decide to boost production to fight for market share with the United States. On Friday, the weekly release of the Baker Hughes US rig counts showed a decline of 3 rigs giving 1022 figure for the week ended on April 12. The near-term upside target for black gold is at the 65.00 figure, but I expect some profit taking to prevail as oil has reached overbought levels, the RSI trading above 70. Brent oil is also adding to its gains and trades today at $71.94/barrel. Gold’s negative momentum is still intact hitting yesterday 1273 figure, the lowest levels since April 3rd just to start a mild rebound during the Asian session to $1279. XAUUSD’s technical picture is negative and now strong support stands at the 200-day moving average down to $1250, which if broken can accelerate the downward move to 1200 as sellers are in full control. Strong resistance now stands at the $1300 round figure and then at the 50-day moving average around $1305.

The European session started mixed, tracking after sentiment supported by influential Chinese macro figures. DAX30 is 0.06 percent higher to 12,108, CAC40 is 0.01 percent higher at 5,524 while FTSE100 in London is 0.02 percent higher at 7,458, and the FTSE MIB in Milan is trading 0.07 percent higher at 21,934.

In cryptocurrencies market, Bitcoin (BTCUSD) continues its up and down around the key 200-day moving average at $5,153, currently trading at $5,200, making the daily low at 5,167 and daily high at 5,267. BTCUSD finds yesterday strong support at the $5,000 level and started the rebound from that figure. Bitcoin will find support at the 50-day moving average at 4,089. Ethereum (ETHUSD) also trades higher to 165, and it is placed nicely above the 100-day moving average facing strong resistance at 193, the 200-day moving average, while Litecoin (LTCUSD) also follows higher at 79.40. The cryptocurrencies market cap currently holds above $160.0B.

On the Lookout: China supplied today some strong figures, the industrial production rose 8.5% y/y (cf. 5.9%), the retail sales were up 8.7% y/y (cf. 8.4%) and last but not least, Chinese GDP rose 6.4% slightly above analyst’s forecasts.

Fitch Ratings in its latest review on the New Zealand economy, reports that Capital proposals are unlikely to affect New Zealand’s major bank franchises. High household debt in New Zealand is broadly stable but is a key risk. Expect modest deterioration in asset quality in New Zealand over the next year, in part because impaired loan levels are around historical lows. The banks’ strong domestic franchises allow for a stable business model that helps offset continued high macroeconomic risks in New Zealand.

In Japan, the trade data for March showing its exports fell 2.4% from a year earlier, while the trade surplus sank 33%.

In the macro calendar from the Americas today, we have the Canadian manufacturing sales at 12:30GMT, followed by the US capacity utilization and industrial figures due at 13:15GMT. New Zealand’s GDT price index data will be published around 14:00GMT. Oil traders will await the release of the US API weekly crude stocks data that will be released at 2030GMT.

AUDUSD Hourly (H1) Chart

Trading Perspective: In Forex markets, the US dollar is trapped between 96.40 and 96.65, while AUDUSD after yesterdays pullback continues higher adding 0.24 percent to 0.7192 as RBA April meeting’s minutes was widely read as dovish, and the likelihood of near term rate hike is low. The pair needs to break convincingly above the 200-day higher to establish a long term positive momentum. Kiwi underperforms and trades 30 pips lower at 0.6736.

GBPUSD: The pair trades lower as the pair’s volatility is at a monthly low, losing the short term momentum as it trades at 1.3050 below the 200-hour moving average. On the downside, major support will be found at 1.2975 at the 200-day moving average while solid protection can be found at the 100-day moving average around 1.2942. On the flipside, immediate resistance stands at 1.3195, the high from previous week session, and from there major resistance can be found at 1.3232 while 1.3382, the yearly high, will be met with strong supply.

In GBP futures markets, open interest shrunk by nearly 1.9K contracts on Tuesday from Monday’s final 151,327 contracts, according to flash data from CME Group. On the other hand, the volume went up by almost 32.7K contracts, reversing the previous drop.

EURUSD managed to rebound from yesterday lows at 1.1280 and regains the 1.13 level. The pair made the Asian high at 1.1316 and the low at 1.1280. Euro holds above the 50-day moving average and now is targeting the 100 DMA at 1.1345. Immediate support can be found at the 50-hour moving average around 1.13, and further bids will emerge at 1.1293 and the 100-hour moving average.

EURO remains in negative mood following recent poor figures in Eurozone. In fact, recent disappointing readings in the region somehow confirm that the slowdown in the bloc and the ‘patient-for-longer’ stance from the ECB could be among us for longer than expected.

In Euro futures markets, open interest rose by nearly 3.8K contracts on Tuesday. Volume extended the choppy performance and increased by almost 68.8K contracts.

USDJPY: Same story here as the pair is trading in just 20 pips trading range, having hit the low at 111.91 and the high at 112.15. 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 112.10 the March 2019 high.

Open interest in JPY futures markets increased by 6.9K contracts on Tuesday, recording at the same time the fifth consecutive build. In the same direction, volume partially reverted Monday’s pullback and increased by more than 11K contracts.

USDCAD did the opposite move from yesterday, as it retreats from yesterdays high at 1.3381 to 1.3328 as oil prices continue higher. The pair will find immediate support at the 100-day moving average around 1.3315 while extra support stands at 1.3196 and the 200-day moving average which if breached will drive prices down to the 1.31 key support. On the upside, immediate resistance stands at 1.34, a break of which can escalate the rebound towards 1.3430.

USDCAD Hourly (H1) Chart

Higher US Yields Boost Dollar, Euro, Pound, EM’s Retreat

April 17, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, CPI inflation, EUR-USD, EURO, Euro zone, FOMC, GBP-USD, greenback, PPI, Sterling, US-China Trade Talks, USD/JPY

Summary: Higher US bond yields boosted the Dollar despite a decline in Industrial Production. The benchmark US 10-year yield climbed 3 basis points to 2.59%, back to March 20 pre-FOMC levels. The Euro retreated to finish at 1.1280 (1.1302) while Sterling fell back 0.39% to 1.3051 (1.3100). Germany’s ZEW Economic Sentiment Index in March soundly beat forecasts. A solid UK Employment report failed to lift the British currency against the overall stronger Greenback. The Dollar Index (USD/DXY) rose to 97.085, up 0.15%, its highest in 4 days. Elsewhere, the Australian Dollar slumped to 0.71396 immediately following the release of the RBA minutes which traders interpreted as dovish. The Aussie Battler bounced back to close little-changed at 0.7172. A data-dump from China, the trifecta of Industrial Production, Retail Sales, Fixed Asset Investment, including Q1 GDP, will determine the fate of risk and the Aussie today. Emerging Market currencies eased. Stocks slipped at the close. The Dow was down 0.06% while the S&P 500 lost 0.03%.

Trading View – One Month US 10-year bond yield – 17 APR 2019

AUD/USD – the Aussie closed flat at 0.7172 after testing an overnight low at 0.71396. Markets initially interpreted the RBA minutes as dovish. Policymakers were less confident in the labour and housing markets. However, the RBA did not weigh an interest rate cut.
EUR/USD – the Euro failed to break up through the strong resistance level of 1.1320-30 and closed at its immediate support level of 1.1280. Germany’s ZEW survey showed concerns on the region’s outlook are fading. Tomorrow’s Eurozone Trade and inflation followed by Thursday’s Euro area and Eurozone PMI’s will be closely watched.
GBP/USD – Sterling fell against the overall stronger Greenback to 1.3050 from 1.3100. Reports that talks between PM May and the Labour party had stalled also weighed on the Pound.
USD/JPY – the Dollar finished little-changed against the Yen. Higher US yields will continue to support this currency pair. Market talk of an options play with a 112.00 strike abound.

On the Lookout: It’s all about China today. Analysts are expecting the worst for the world’s second largest economy to be over with. Recent export and credit data beat expectations. China’s Q1 GDP is expected to grow at an annual 6.3% from the previous 6.4%. Improvements are forecast in China’s trifecta of Industrial Production, Retail Sales and Fixed Asset Investment. We could be in for a few surprises. Tin helmets on.
Apart from China, the Eurozone reports on its Current Account and Final Headline and Core CPI data for March. The UK follows with its Headline, Core CPI, PPI input and House Price Index. Canadian Inflation (CPI, Core CPI and Trimmed-Mean CPI) are next. US March Trade Balance rounds up today’s busy data.

Trading Perspective: Easter markets are always characterised by less liquidity which lead to break-out attempts and wider trading ranges. Often, the break-outs are temporary. Traders need to keep aware of the respective levels. Market positioning will have a greater impact in thin conditions. There may be some large options strategies lying around with expiries in the next few days. The currencies have been stuck in relatively tight ranges content to consolidate, searching for catalysts to move. There is a lot of economic data released this week, the bulk of which come today and tomorrow. Keep watch on the data.

EUR/USD – The Euro slipped to its immediate support level, settling just above 1.1280. The next support level lies at 1.1250. This is a strong support level and should hold if the Euro is to continue its march higher. Immediate resistance today can be found at 1.1310 and 1.1330. Bear in mind the speculative short Euro bets are at multi-year highs. Some of those shorts will be looking to cover on any dips. Sentiment on the Single currency is still bearish which should keep the Euro between 1.1250-1.1330 for now. Prefer to buy on dips.

DAILY FX AUD USD Hourly – 17 APR 2019

AUD/USD – The Aussie had a good bounce off it’s RBA induced lows. At the end of the day, the RBA did not signal any rate cuts even if policymakers expressed less confidence on the recent labour and housing data. It’s all about China today. AUD/USD has immediate resistance at 0.7180 and 0.7210. Immediate support lies at 0.7140 and 0.7110. Speculative Aussie short bets were pared to -AUD 54,400 from the previous -AUD 55,700. Look for a likely range today of 0.7160-0.7210. Prefer to buy dips.
USD/JPY – The Dollar failed to gain ground against the Yen despite the climb in the US 10-year yield. Stocks reversed to ease at the close. USD/JPY closed at 112.01 (112.04 yesterday). Overnight high traded was 112.045. Immediate resistance lies at 112.10 followed by 112.30. Immediate support can be found at 111.85 followed by 111.55. The close around 112.00 is not surprising considering reports of an Options play with the strike price at 112.00. JPY short bets are the second biggest next to the Euro. The latest COT/CFTC report (week ended April 9) saw a build-up of net JPY shorts to -JPY 71,500 bets from the previous week’s -JPY 62,700. Look to sell rallies with a likely range of 111.60-112.10 today.
GBP/USD – Sterling traded to an overnight low of 1.30425 after failing to clear above 1.3100. Solid UK Employment data which saw UK Unemployment remain at 45-year low of 3.9%, and an Employment rise to 179,000 failed to lift the Pound. Sterling has immediate support at 1.3040 followed by 1.3010. Immediate resistance can be found at 1.3100 and 1.3140. Look to buy dips today with a likely range of 1.3040-1.3110.

Happy trading all.

AUDUSD Under Pressure After Dovish RBA

April 16, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, AUD/USD, Bitcoin, BOJ, Brexit, brokerage, Cryptocurrencies, ECB, EUR-USD, Iran sanctions, monetary policy, OPEC, RBA, trading platform

Asian stocks finished higher to the highest level in nine months, as investors cheer upbeat beginning of the US earnings season. In Japan, the Nikkei225 main index added 0,32 percent to 22,238 the highest since December 4th, 2018, the Hang Seng benchmark in Hong Kong finished 0.68 percent higher at 30,007. Chinese stocks are rallying, with Shanghai Composite finishing 1.55 percent higher at 3,226, and in Singapore, the FTSE Straits Times index finished 0.16 percent higher at 3,329. Australian equities have overcome early losses to end the day higher. The ASX 200 continues to trade on lighter volumes with school holidays and the Easter long weekend coming up. The ASX 200 index managed to lift by 26 points or 0.42% to 6277.4.

In commodities markets, Crude oil consolidates below five months high, at 63,27 area amid OPEC’s ongoing supply cuts, geopolitical uncertainty and the US additional sanctions on Iran. During the weekend, Russia’s Finance Minister Anton Siluanov said that Russia and OPEC might decide to boost production to fight for market share with the United States. On Friday, the weekly release of the Baker Hughes US rig counts showed a decline of 3 rigs giving a 1022 figure for the week ended on April 12. The near-term upside target for black gold is at the 65.00 figure, but I expect some profit taking to prevail as oil has reached overbought levels, the RSI trading above 70. Brent oil gives up some cents and trades today at $70.84/barrel near recent highs. Gold started the week lower and continues its trip south today at $1284, at the lowest levels since April 3rd. XAUUSD technical picture has turned negative, and now immediate support stands at 100-day moving average at $1284, which if broken can accelerate the downward move to 1260 and the 200-day moving average. Strong resistance now stands at the $1300 round figure and then at the 50-day moving average around $1307.

European session started slightly positive, tracking a strong session in Asia as strong Chinese macro figures supported sentiments. DAX30 is 0.13 percent higher to 12,034, CAC40 is 0.01 percent higher at 5,508 while FTSE100 in London is 0.07 percent higher at 7,442 and the FTSE MIB in Milan is trading 0.16 percent higher at 21,929.

In cryptocurrencies market, Bitcoin (BTCUSD) started the week on positive mood but lost over 80 dollars during US session at 5,064 and trades below the key 200-day moving average resistance at $5,147, making the daily low at 4,999. BTCUSD pair broke the $5,000 level the previous week but rebounded from $4,920 support area. Bitcoin will find support at the 50-day moving average at 4,089. Ethereum (ETHUSD) lost 5 dollars to 161, and it is placed nicely above the 100-day moving average, while Litecoin (LTCUSD) is also lower at 78.40. The cryptocurrencies market cap is currently above $160.0B.

On the Lookout: Bank of Japan Chief Kuroda, says that the central bank needs to bear in mind the possibility that prolonged low-rate policy may hurt financial intermediation. He further said that the BOJ would consider additional easing if momentum towards 2% inflation is lost adding that there is no need to change the 2% inflation target. The Reserve Bank of Australia (RBA) did discuss the impact of a rate cut while noting that inflation is likely to remain low for some time, but there is no strong case for a near-term move in interest rates.

Eric Rosengren, president of the Federal Reserve Bank of Boston, said that while the pace of economic expansion has slowed, overall, the US economy is doing quite well and the possibility of a recession is quite low.

Business conditions in the New York region improved more than expected in April, but growth remained “fairly subdued”, according to a survey released by the New York Fed. The Empire State manufacturing index rose to 10.1 from 3.7 in March, surpassing expectations for a reading of 6.0. Its new orders index rose to 7.5 this month from 3.0 the month before, while the shipments index increased to 8.6 from 7.7.

In the macro calendar from the Americas today, we have the Canadian manufacturing sales at 12:30GMT, followed by the US capacity utilization and industrial figures due at 13:15GMT. New Zealand’s GDT price index data that will be published around 14:00GMT. Oil traders will await the release of the US API weekly crude stocks data that will be released at 2030GMT.

AUDUSD Hourly (H1)

Trading Perspective: In Forex markets, US dollar consolidates around 96.50, while AUDUSD is trading 0.35 percent lower at 0.7145 as RBA April meeting’s minutes was widely read as dovish, and the likelihood of near term rate hike is low. Kiwi is trading 10 pips lower at 0.6756.

GBPUSD The pair failed to break above the 1.31 area and continues the consolidation around 1.3085. On the downside, major support will be found at 1.2975 at the 200-day moving average while solid protection can be found at the 100-day moving average around 1.2942. On the flipside, immediate resistance stands at 1.3195 the high from previous week session, and from there major resistance can be found at 1.3232 while 1.3382 the yearly high will be met with strong supply.

In GBP futures markets open interest increased 3.7K contracts to their open interest positions on Monday, reaching the third build in a row. Volume, instead, dropped by nearly 29.5K contracts following two consecutive advances.

EURUSD is trading in record low range, just 10 pips between 1.13 and 1. The pair made the daily high at 1.1320 and the low at 1.1297. Euro holds above the 50-day moving average and now is targeting the 100 DMA at 1.1348. Immediate support can be found at the 50-hour moving average around 1.1287, and further bids will emerge at 1.1278 and the 100-hour Moving average. As Michael Moran mentioned yesterday, speculative EUR shorts continue to grow. The latest COT report (week ended 9 April) saw speculative EUR short bets increase to -EUR 102,200 bets from the previous week’s -EUR 99,200.

In Euro futures markets, open interest shrunk by nearly 1.9K contracts on Monday from Friday’s final 500,343 contracts, according to advanced figures from CME Group. Volume followed suit and dropped by around 83.7K contracts.

USDJPY: Same story here as the pair is trading in just 14 pips trading range, having hit the low at 111.85 and the high at 112.02. Major support for the pair stands at 111.51 the 200-day moving average and then at the 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 112.10 the March 2019 high.

Open interest in JPY futures markets increased for the fourth straight session on Monday, this time by more than 3K contracts. Volume, instead, shrunk by almost 38.7K contracts after two consecutive daily builds.

USDCAD is the winner of the day, as it rebounds from yesterdays low at 1.3331 to 1.3378 as oil prices retreat from recent highs. The pair will find immediate support at the 100-day moving average around 1.3322 while extra support stands at 1.3192 and the 200-day moving average which if breached will drive prices down to 1.31 key support. On the upside, immediate resistance stands at 1.34 a break of which can escalate the rebound towards 1.3430.

USDCAD Hourly (H1)

Dollar Ends Little-Changed, FX Volatility Collapsing

April 16, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, US-China Trade Talks, USD/JPY

Summary: The Dollar ended little-changed against it’s Rivals in a quiet start to a likely slow Easter Week. Currency volatility, already at multi-year lows around 5%, remained depressed. There were few catalysts to move the currencies. Second-tier NY Empire State Manufacturing Index rebounded to 10.1 after a near 2 year low of 3.7 in March. The Dollar Index (USD/DXY), a measure of the Dollar’s value against a basket of foreign currencies (mainly the Euro) closed little-changed at 96.931 (96.85). USD/CAD rose 0.4% to 1.3370 (1.3330) after the Bank of Canada released its Q1 downbeat quarterly business survey report. The Euro was unchanged at 1.1302. Sterling rallied to 1.3100 (1.3077) as immediate Brexit risks faded. Ahead of today’s release of the RBA’s March meeting minutes, the Australian Dollar was flat at 0.7172. The Dollar finished at 112.05 Yen (112.02 yesterday). Markets awaited progress on China-US trade talks. US Treasury Secretary Mnuchin said he hoped that the two sides were “close to the final round” of negotiations. Stocks and bond yields slipped. The S&P 500 was down 0.07% (2,905).

EUR/USD – The Euro traded in a narrow 1.12975-1.13209 range without much to drive the Single currency. EUR/USD ended at 1.1303, little-changed from 1.1300 yesterday. Today sees the release of German ZEW Economic Sentiment Index. Eurozone inflation (tomorrow) and Euro area PMI’s (Thursday) will hopefully stir this market up.

Daily FX AUD USD Chart – 16 April 2019

AUD/USD – Australian Dollar volatility fared no better. AUD/USD closed at 0.7172, exactly where it was yesterday. Gimme a break! AUD/USD traded to a high of 0.71822. Emerging Market currencies were mostly weaker which kept the Battler from advancing. The RBA minutes are expected to show an increase in uncertainty and data-dependence.
USD/JPY – the Dollar managed to close above 112.00, little-changed from yesterday. The overnight trading range for USD/JPY was a narrow 21 points (111.89-112.10).
GBP/USD – Sterling edged higher as any immediate Brexit risk was removed by the delay and quiet trading conditions. The British Pound closed at 1.3100 from 1.3075 yesterday.

On the Lookout: “Watching and waiting”.. for something to happen. On the trade talks between China and the US. Any deal between the two is expected to remove headwinds to global growth. How close are they really to a deal? Despite what Mnuchin and other officials say markets are uncertain. I am. EM currencies were mostly lower yesterday while stocks slipped.
Events and data releases pick up today and hopefully see some volatility injected back into the currencies. The day starts off the release of the minutes of the RBA’s March meeting. Traders expect a cautious outlook from the Australian central bank. Australia’s NAB bank expects that the Reserve will show that uncertainty and data-dependence has increased. Australian Employment data are due on Thursday. The UK releases its Average Earnings Index (Wages), Claimant Count Change (Jobless Claims) and Unemployment rate. The UK’s Unemployment rate is expected to remain at 3.9% while Wages are forecast to gain to 3.5% from 3.4%. Claims for Unemployment benefits are forecast to drop. Germany’s ZEW Economic Sentiment Index follows next. The US round off the day’s data with March Industrial Production and Capacity Utilisation.

Trading Perspective: Markets can expect the relatively tight ranges to hold today, with little fresh catalysts to move them. The RBA meeting minutes should stir the Aussie which is poised to move either way. Overnight, US bond yields eased, the 10-year finished at 2.55%, down two basis points. Rival global yields were either higher or unchanged. Only Canada’s bond yields dropped (3 BP) due to the BOC’s downbeat quarterly business report. The Bank of Canada’s survey report had a gloomy outlook for the first quarter of this year.
We reported yesterday that net total USD long bets were trimmed. Short Euro, Yen and Australian Dollar shorts remained at multi-year highs. Sterling shorts were cut further to total -GBP 6,500 from -GBP 9,900. With little else to move the markets, traders may look to adjust their positions into the long Easter weekend

EUR/USD – the Single Currency closed virtually flat at 1.1302. Overnight high traded was 1.13209. The overnight low reached was 1.12975. Given that the close was just above 1.1300, we may drift lower to immediate support at 1.1280. The next support level is at 1.1250 and that should hold for now. The near-term trading range has moved up a notch to 1.1250-1.1350. A sustained break of either side would dictate the next big move. For today, a trading range of 1.1285-1.1325 is likely. Prefer to buy dips to 1.1285. Market positioning remains short Euro at multi-year highs.
USD/JPY – The Dollar should have topped out at 112.098, overnight highs against the Yen. US 10-year yields slipped 2 basis points to 2.55%. Japan’s 10-year JGB yield rose 2 basis points to -0.04%. This should keep the Dollar Yen from moving much higher. USD/JPY has immediate resistance at 112.10 followed by 112.40. Immediate support can be found at 111.90 and 111.50. Risk appetite should support the USD/JPY but the market’s position in short JPY.
AUD/USD – The Aussie traded in a tight 0.7164-0.7182 range overnight, a mere 18 pips! Today sees the release of the RBA meeting minutes, the outcome of which is expected to be cautious. This would keep a lid on the Aussie near the overnight highs. Thursday’s Employment data follow which the RBA will look at closely. The Australian Dollar has immediate resistance at 0.7190-0.7200. The next resistance level is found at 0.7230. Immediate support can be found at 0.7160 and 0.7130. Look to buy dips in a likely 0.7150-0.7200 range today.

Investing.Com GBP USD 1H Chart – 16 April 2019

GBP/USD – Sterling rallied as Brexit’s uncertainty faded in the background for now. No news is good news (on Brexit) for the British currency. Data has been on the improving side for the most part of it. Today’s UK Employment data will be the focus and a good report should see Sterling approach the strong resistance at 1.3200. GBP/USD closed at 1.3100. Immediate resistance can be found at 1.3130 followed by 1.3150. Immediate support lies at 1.3050 and 1.3020. Look to buy dips with a likely range of 1.3085-1.3135 today.

Happy trading all.

Dollar Retreats; Upbeat China Trade Boosts AUD, Risk

April 15, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, EUR-USD, EUR/JPY, Eurozone, FOMC, US-China Trade Talks, USD/DXY, USD/JPY

Summary: Upbeat Chinese exports, a less-than-expected fall in Eurozone Industrial Production, and solid US earnings boosted risk assets and weighed on the US Dollar. The Euro extended its rise to close above 1.13 (1.1303), near 3-week highs. Traders attributed part of the Euro’s climb to anticipated currency demand due to a large commercial EUR/JPY purchase. Reuters reported that Japan’s Mitsubishi UFJ Financial Group plans to purchase the aviation financing arm of Germany’s DZ Bank, according to FX traders. The Australian Dollar outperformed, jumping 0.62% to 0.7172, its highest finish since February 27. China’s trade data showed a rebound in exports last month which offset weaker imports. USD/JPY rose to 112.09 for the first time since March 5, settling at 111.99, up 0.3%. The Kiwi rallied 0.47% to 0.6763 (0.6730 Friday).
A solid start to the US earnings season boosted Wall Street stocks. The S&P 500 rose 0.7% to 2,909.00 (2,890 Friday). The US 10-year bond yield climbed 7 basis points to 2.57%.
Eurozone Industrial Production in March slipped 0.2% against a forecast drop of 0.5%. US Preliminary University of Michigan Consumer Sentiment missed at 96.9 against an expected 98.1.

Daily FX EUR USD Chart – 15 April 2019

EUR/USD – the Euro resumed its rally climbing to 1.13237 before easing to 1.1302 at the New York close. It was the first close above 1.1300 since March 25.
USD/JPY – The Dollar rallied against the Yen to 112.093 before easing to 111.99. USD/JPY was boosted by the anticipated commercial transaction which would involve a EUR/JPY purchase. Increased risk appetite and a higher US 10-year bond yield also helped.
AUD/USD – The Aussie jumped to 0.71922, highs not seen since late February before easing to close at 0.7175 in New York. Upbeat Chinese trade data and the market’s current appetite for risk are shaking a lot of the Aussie bears.

On the Lookout: Markets start off today with limited data releases ahead of the Easter shortened week with heavy data releases mid-week. Today sees US Empire State Manufacturing Index while FOMC member and Chicago Fed President Charles Evans speaks in a CNBC Squawk Box TV interview. Tuesday starts off with the minutes of the RBA’S March Monetary Policy meeting. This is followed by the UK Average Weekly Earnings, Unemployment rate and Claimant Count Change data as well as Germany’s ZEW Economic Sentiment Index. US Capacity Utilisation and Industrial Production data for March round off the data releases. Wednesday sees China’s trifecta of Industrial Production, Retail Sales and Fixed Asset Investment as well as Q1 2019 GDP. The UK and Canada report their Headline and Core CPI data for last month. On Thursday we start off with Australia’s March Employment report, Euro-area and Eurozone Flash Manufacturing and Services data, UK, Canada and US Headline and Core Retail Sales data, as well as US Flash Manufacturing and Services PMI as well as Philadelphia Fed Manufacturing Index. Most financial centres will be closed on Friday to commemorate Good Friday.

Trading Perspective: Expect the Dollar to trade within ranges against its Rivals, albeit slightly weaker. The higher US bond yields were not matched by rises from its rivals. The US 10-year bond yield rose a whopping 7 basis points to 2.57%. Germany’s 10-year Bund Yield was up 4 basis points to 0.05%. UK 10-year Gilts yielded 1.21% from 1.15%. Japan’s 10-year JGB yield closed flat at -0.06%.

Barchart.Com USD DXY (Dollar Index) Chart – 15 April 2019

This should give the Greenback support. Market positioning still favoured the Greenback, particularly against the Euro and JPY. Net short Euro and JPY bets increased while shorts against the Pound and Australian Dollar were trimmed, according to the latest Commitment of Traders CFTC report for the week ended 9 April. On other fronts, US trade officials have signalled that a trade deal between the US and China is near. Immediate Brexit risks have been pushed back and this benefits the Pound. Politically, the IMF has voiced its concern regarding President Trump’s attempts to politicise the Fed. With liquidity expected to dry up as we approach the Easter weekend, there could be some fireworks in the making… finally.

EUR/USD – The Euro has shifted its range higher after repeated downside tests failed. Speculative EUR shorts continue to grow. The latest COT report (week ended 9 April) saw speculative EUR short bets increase to -EUR 102,200 bets from the previous week’s -EUR 99,200. EUR/USD has immediate resistance at 1.1325 followed by 1.1350. Immediate support can be found at 1.1275 and then 1.1250, which is strong. A break above 1.1350 could see the Euro accelerate toward 1.1400. The 1.1250 level should hold and see the EUR/USD shift higher. Likely range today 1.1285-1.1335. Prefer to buy dips.
USD/JPY – The Dollar rallied to 112.09 before easing to settle around 112.00. The 7-point climb in the US 10-year yield and increased risk appetite will support USD/JPY. For now. The latest Commitment of Traders report saw an increase in JPY shorts to -JPY 71,500 bets from the previous week’s -JPY 62,700. The Yen is the second largest shorted currency against the US Dollar. Immediate resistance lies at 112.25 followed by 112.50. Immediate support can be found at 111.70 and 111.30. Look for a likely trading range of 111.70-112.20 today. Prefer to sell rallies.
AUD/USD – The Aussie’s rally has been impressive, boosted by the overall weaker Greenback, healthy risk appetite and higher iron ore prices. For almost two months the Aussie couldn’t take a trick and was depressed with many calling for a break of 0.70 US cents. AUD/USD has immediate resistance at 0.7200 followed by 0.7250. Immediate support can be found at 0.7150 and 0.7120. The latest COT report (week ended April 9) saw speculative Aussie shorts trimmed to -AUD 54,400 from –AUD 55,700. Prefer to buy dips with a likely range today of 0.7160-0.7210.
USD/DXY – The Dollar Index slipped to close at 96.85, down 0.32%. The immediate support at 96.70/80 is strong and should hold initial attempts. Immediate resistance can be found at 97.00 and 97.30. The big resistance level is 97.50 which was failed to break decisively in recent weeks.

Have a good week ahead all, happy trading.

Upbeat Data Lifts Dollar, Euro, Pound Slip, Yen Sags

April 12, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, ECB, EU, EUR-USD, FED, FOMC meeting, GBP-USD, RBA, USD/JPY

Summary: The US Dollar rebounded against it’s Rivals boosted by upbeat Producer Prices. Claims for Unemployment Benefits slumped to its lowest in almost 50 years. A day after Fed Officials indicated that they would keep current interest rates steady for 2019, US bond yields climbed.
The Dollar Index (USD/DXY) edged higher to close at 97.182, up 0.25%. Sterling slipped 0.35% to 1.3053 after the EU granted an extension of Brexit to October while PM May was nowhere near getting her deal through Parliament. USD/JPY jumped to 111.67 from 111.00, lifted by the higher US 10-year bond yield to 2.50% from 2.46% yesterday. The Aussie underperformed, dropping back to 0.7125 (0.7170). Wall Street stocks were little-changed.

Forex Factory US Weekly Jobless Claims Chart – New 11 April 2019

US March Producer Prices beat forecasts with Headline PPI rising 0.6% (vs f/c 0.3%). Core PPI was up 0.3% against a forecast of 0.2%. US Weekly Jobless Claims dropped to 196,000, beating forecasts of 210,000. It was the lowest unemployment claim since 1969. German and French Final CPI data matched forecasts. UK RICS House Prices beat forecasts. China’s CPI and PPI matched expectations.
Federal Reserve Vice-Chairman Richard Clarida emphasized “patience” and that the economy is in a good place. St. Louis President and FOMC voting member, said there was no need for further rate rises.

USD/JPY – the Dollar rebounded against the Yen to 111.68, up 0.60%. USD/JPY was boosted by the higher US 10-year bond yield, up 4 basis points to 2.50%. In contrast, Japan’s 10-year JGB yield was up one basis point to -0.06%. BOJ Governor Haruhiko Kuroda was crossing the wires saying the global economy was experiencing a slowdown.
EUR/USD – The Euro slipped back off it’s highs weighed by the overall stronger US Dollar. EUR/USD closed at 1.1255 from 1.1272 yesterday. The Single currency rallied to an overnight and 3-week high of 1.12874, before easing at the NY close.
GBP/USD – Sterling slipped following the EU’s move to grant an extension for Brexit to October 31. PM May appears no closer to get her deal through Parliament while the pressure mounts for her resignation. GBP/USD dropped to 1.3052 after trading to 1.3109 highs.
AUD/USD – The Aussie slumped after it’s strong rally against the Greenback to 0.71708. The Battler lost momentum following the release of upbeat US data. AUD/USD closed at 0.7125.

On the Lookout: Following the ECB and Fed meeting outcomes, fresh catalysts will be needed to move the markets and get back some volatility. While the US Dollar rebounded on the upbeat US economic data and higher bond yields, the rally was limited. Long US Dollar market positioning, currently at multi-year highs, is the main impediment for further upside.

Daily FX USD DXY Chart – 12 April 2019

Data today starts off with China’s Trade Surplus (in both CNY and USD) and Foreign Direct Investment (year-to-date). A marked drop in China’s March trade surplus is expected. Australia sees the RBA’s Financial Stability Review. The RBA’s assessment of current financial conditions may provide insight to future monetary policy. Eurozone Industrial Production for March and the UK Conference Board’s Leading Index follow. The US reports its Preliminary University of Michigan Consumer Sentiment and its US Treasury Currency Report. IMF meetings begin this weekend in Washington, DC.

Trading Perspective: Look for consolidation today ahead of the data releases later and any possible market moving catalysts. Upbeat US data have supported Clarida’s assessment that the US economy is in a good place. US employment is still robust. Bond enthusiasts are not that confident that there will be any Fed rate cuts early in early 2020. Meantime market positioning remains long of US Dollar bets. With a decent correction still not about to get underway.

The China-US trade negotiations have faded in the background as the equity markets consolidate into the Earnings season. For Brexit, its “See you in October”, with some hoping that kicking the Brexit can further down the road will buy their politicians more time. PM May risks her leadership with more shouting for her resignation. Further consolidation in the currencies against the Greenback look likely.

USD/JPY – continues to gyrate with the moves in the US bond yields. The 10-year yield bounced off 2.46% after the upbeat US data to 2.50%. The Dollar rallied 0.6% to close at 111.67, not far from its overnight high of 111.69. Immediate resistance lies at 111.70 followed by 112.00. There is near-term support found at 111.30 and 110.90. Look for consolidation with today’s likely range 111.30-111.80. Prefer to sell rallies from here.
EUR/USD – The Euro slipped back to 1.1255 after testing the 1.1287 level again, failing to break higher. The overall stronger Greenback and a dovish ECB will prevent further gains today with immediate resistance at 1.1285 strong. The next resistance level is at 1.1325. Immediate support can be found at 1.1250 followed by 1.1220. Bear in mind that currently short Euro bets are at their largest since December 2016. Look for a likely range today of 1.1235-85. Prefer to buy any dips to 1.1235.
GBP/USD – Sterling dropped after climbing to a high of 1.3108 following the EU’s granting a Brexit extension to October 31. Meantime UK data continues to surprise to the upside. UK RICS House Prices beat forecasts, falling 24% against an expected drop of 30%. GBP/USD has immediate support at 1.3030 followed by 1.2980. Immediate resistance can be found at 1.3080 followed by 1.3110. We may be back in a 1.30-1.32 band on the Pound. Look to buy dips with a likely range today of 1.3040-1.3090.
AUD/USD – The Australian Dollar slipped back weighed by the stronger Greenback. Emerging Market currencies also lost ground versus the US Dollar. AUD/USD closed at 0.7125. Immediate support can be found at 0.7115 followed by 0.7085. Immediate resistance can be found at 0.7150 and 0.7180. Gold prices dropped by 1.2% overnight but Iron Ore prices remain robust. The Aussie speculative market is short of AUD bets. Look to buy dips with a likely range of 0.7110-60 range today.

Australian Business Insider – Iron Ore Price Chart – 12 April 2019

Happy Friday and trading all.

Equities Mixed in Global Market, US PPI Update in Focus As Geopolitical Events Calm Down

April 12, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: AUD/USD, Crude Oil, European Markets, Federal Reserve, GBP-USD, International Monetary Fund, Precious Metals, US PPI

Risk appetite improved in European market hours but equities are mixed on cautious investor sentiment in the global market. Investors await macro data updates for short term directional cues.

Summary: Asian and European markets are seeing conflicting price action today. Investor sentiment in Asian market hours took a risk averse tone on cautious stance from US Federal Reserve and European Central Bank on economic growth prospects. This resulted in the major benchmark indices and risk assets across key Asian stock exchanges seeing dovish price action. Risk assets have been rickety in the market so far this year while bond market is seeing considerable level of activity as multiple reductions in growth forecast for the year ahead by International Monetary Fund and major global central banks have kept investors on edge so far this year. While escalating trade tensions between US & EU continue to weigh investor sentiment in the global market, European market is seeing positive price action today as EU agreed to push the deadline for Brexit as far as October 31, 2019. Given the delay of the one major event that had been causing high level of concerns in the European market so far this week, investor sentiment in European markets is relatively positive compared to other major global counterparts.

Precious Metals: Despite mixed price action in Asian and European markets, both gold and silver are trading in red today. There hasn’t been any major progress on E.U.-U.S. trade war aside from headlines influenced escalation in trade tensions. Given that headlines on same has calmed down, Brexit has been delayed and there is no major update or progress in Sino-U.S. trade wars, there is no driving force for save haven assets resulting in dovish price action.

Crude Oil: Crude oil price saw slight downward price action today influenced by build in US EIA weekly crude oil stockpile data. However, supply disruption owing to tensions in Libya and Venezuela and OPEC enforced production and supply cut agreement serve as factors supporting Crude oil bulls while maintaining supply to demand ratio in favour of Crude oil bulls. This has helped limit decline and keep the price well near 2019 highs hit earlier this week.

AUD/USD: The pair is trading range bound today as mixed macro data from China failed to provide support to AUD bulls. But weak US Greenback in the global market and optimism surrounding Sino-U.S. trade talks continue to provide Australian Dollar with some level of fundamental support preventing sharp declines to the downside. The pair has firm foothold at 0.71 handle above which the pair is seeing range bound price action.

On The Lookout: With Brexit woes out of the picture following delay in deadline agreed during yesterday’s meeting, investor focus shifts to other major geo-political events. While there hasn’t been any solid progress between E.U. & U.S. on their trade war, tensions continue to remain high following US President Donald Trump’s comments earlier this week. Investors also expect more details on talks between China and U.S. and hope for announcement of date for Presidential summit between two nations to sign a trade deal before end of this month. Aside from geo-political events, investors are focused on macro data updates for short term trading and profit opportunities. US calendar will see release of PPI data, Initial Jobless Claims update and speech by FOMC members Bullard and Quarles and Bank of Canada governing council member Wilkins while Pacific-Asian market hours will see release of Singapore’s GDP data and Australia’s RBA financial stability review update.

Trading Perspective: Risk appetite in global market has shown improvement during European market hours. Given multiple high impact macro data updates, major risk assets are likely to see highly volatile price action in American market hours. Subdued USD is likely to influence some level of positive price action in major Forex pairs.

EUR/USD: The pair is holding steady well within weekly price range with range bound price action during Asian and European market today. European macro data saw neutral outcome and didn’t have any major impact on price action. EU-U.S. trade tensions keep gains in check while headlines on Brexit delay provides EURO bulls with fundamental support for positive bias in range bound price action. Investors now await US macro data updates for short term directional cues.

GBP/USD: The pair saw slight recovery action on news of Brexit deadline extension but the rally didn’t last long. Traders are not satisfied with progress as scenario within UK parliament still remains at standstill. With no clear decision to move forward and lawmakers involved in full on power play, it doesn’t look like there will be any solid progress in immediate future. This has resulted in the pair declining towards mid-1.30 handle. Investors now await US macro data update for short term trading opportunities.

USD/CAD: The pair is seeing upward price action as crude oil price fell in the global market. But gains have been capped owing to USD’s weakness in the global market. Also, crude oil price remains well near weekly highs despite decline in price action as OPEC supply cut enforcement and supply disruption from Libya & Venezuela continue to provide strong fundamental support. Investors now wait for US macro data updates for short term trading opportunities.

ECB, Fed to Remain “Patient”; Euro, USD End Little-Changed

April 11, 2019 by Michael Moran Leave a Comment Filed Under: Market News - Asia Open Tagged: AUD/USD, Brexit, ECB, EU, EUR-USD, EURO, FED, FOMC, GBP-USD, RAND, S&P 500, Sino-U.S. trade talks, US-China Trade Talks, USD/JPY

Summary: The US Dollar and Euro closed little-changed as two of the world’s most influential central banks signalled that they are willing to keep interest rates steady. The ECB left key interest rates unchanged and reiterated that it plans to hold them at current levels for the rest of the year. The Fed released the minutes of its March 19-20 meeting where policymakers hinted they would not raise rates in 2019. FOMC officials also signalled that they would stop reducing their bond holdings by September. The Euro closed at 1.1272 in New York, little-changed from yesterday’s 1.1266. The Dollar Index (USD/DXY), a measure of the value of the US Dollar relative to a basket of foreign currencies, slipped 0.08% to 96.944 (97.02). Sterling was steady after rallying 0.2% to 1.3088. The EU Summit saw European nations agree to extend Brexit until October 31. USD/JPY closed modestly lower at 111.00 (111.15).

Investing.com US 10-Year Bond Yield Chart – 11 April 2019

The Australian Dollar outperformed the Majors, climbing 0.57% to 0.7170 (0.7125). Emerging Market currencies rallied. The South African Rand soared 1.3% against the Greenback to 13.91 from 14.10 yesterday. Bond yields fell led by the benchmark US 10-year, down to 2.46% from 2.5%.
Wall Street stocks steadied. The DOW ended up 0.12% (26,175) while the S&P 500 rose to 2,891 from 2,878. US inflation was mixed with Headline CPI beating forecasts at 0.4% against 0.3%. Core Prices though underwhelmed at 0.1% against expectations of 0.2%. Euro-area Industrial Production in France and Italy beat forecasts. UK Manufacturing, Industrial Production and Construction Output all beat forecasts.

EUR/USD – the Euro was steady as she goes, grinding its way up to 1.1287 before settling at 1.1272 at the close. Overnight low traded on the Euro was 1.1230 which now forms a short-term base.
AUD/USD – The Aussie Dollar hit 6-week highs overnight (0.7175) boosted by the rally in EM currencies, a generally weaker Greenback as well as lessening expectations of near-term RBA rate cut. RBA Assistant Governor Guy Debelle, speaking in Adelaide yesterday, signalled that he isn’t convinced the Australian central bank needs to cut interest rates yet.
USD/JPY – The Dollar slipped further against the Yen, closing at 111.00 from 111.16 yesterday. The fall in US 10-year yields by 4 basis points to 2.50% was not matched by its Japanese counterpart. Ten-year JGB yielded -0.07% from -0.06%.
GBP/USD – Sterling rallied 0.2% to 1.3089 (1.3057) as the Eurogroup countries currently holding the EU Summit appeared to be supportive of a long Brexit extension. An agreement from the EU on an extension would initially be Sterling supportive. Reports have just been released that the EU has agreed to extend Brexit to Oct 31.

On the Lookout: The ECB and Fed both highlighted their concerns of the slowing global growth amidst the current trade tensions. The China-US trade talks saw both countries agree on enforcement agencies, which are the mechanism to policy any agreement. While it’s a first step, there is still a long way to go with other issues yet to be resolved. The EU Summit which voted to extend Brexit to Oct 31 should boost the Pound in the short term. Traders will focus on first-tier data reports from here-on-in.
Today sees the release of China’s CPI and PPI data. RBA Assistant Governor Guy Debelle speaks in Hongkong later today. Euro area reports today are Germany’s and France’s Final CPI data. US Headline and Core CPI data round off the day’s reports. FOMC members Clarida, Williams, Bullard all speak at different engagements.

Trading Perspective: With both the ECB and Fed signalling dovish outlooks, market positioning comes into play which is mildly supportive of the currencies. Speculators are long of US Dollar bets at a 3-month high. US Bond yields fell yesterday and are approaching 2.4%. Without yield support, the Dollar will find it hard to rally.

EUR/USD – The Euro held most of its gains closing at 1.1271 from 1.1266 yesterday. The overnight low traded was 1.12295. A short-term base at 1.1210 is forming with the next resistance level at 1.1320. Immediate resistance lies at 1.129 followed by 1.1320. Immediate support can be found at 1.1240 followed by 1.1210. Net short Euro bets are at their biggest since December 2016 according to the latest COT report (2 April). Look to buy dips with a likely range today of 1.1255-1.1305.

Daily FX.COM – AUD USD H1 Chart – 11 April 2019

AUD/USD – The Australian Dollar rallied on the back of the generally softer Greenback. RBA Assistant Governor Guy Debelle put to rest, for now, any expectations of a near-term rate cut. He speaks again today in Hongkong. The rally in Emerging Market currencies also supported the Aussie Battler. Last, but not least, the speculators are short of Aussie bets. AUD/USD has immediate resistance at 0.7175 followed by 0.7200. Immediate support can be found at 0.7155 followed by 0.7115. Look to buy dips with a likely range of 0.7155-95.
GBP/USD – The British Pound steadied above 1.30 after PM May successfully convinced EU leaders to extend the Brexit deadline to Oct 31, 2019. Upbeat UK production data released yesterday should be Sterling supportive. GBP/USD has immediate resistance at 1.3120 followed by 1.3170. Immediate support can be found at 1.3060 followed by 1.3030. Look to buy dips with a likely range today of 1.3060-1.3160.
USD/JPY – The Dollar closed marginally lower against the Yen at 111.00. Immediate support at 110.60 is at risk. The next support level lies at 110.10. Immediate resistance can be found at 111.30 followed by 111.60. Given the slide in the US 10-year yield, USD/JPY should grind lower with today’s likely range 110.60-111.20.

Happy trading all.

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