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Asian stocks Rallied, AUDUSD breaks above 0.71

March 18, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, banks, BOJ, Brexit votes, Brexit Withdrawal Agreement, economy, EU Parliamentary elections, EU summit, EUR-USD, trading platform

Asian stocks advanced in the first trading day of the week as traders spy a possible light at the end of the tunnel in talks between the UK and EU and China’s suggestion of an official state visit by President Xi linked to a trade deal will see the meeting take place in late April, a delay to the much-anticipated March finish. In Japan, the Nikkei225 main index rose 0.66 percent to 21,584, and the Hang Seng benchmark in Hong Kong finished 1.37 percent higher at 29,409. The Shanghai Composite finished 2.47 percent higher at 3,096, while stocks in Australia are in a fairly subdued start to the new trading week, with the market dipping in and out of negative territory, before finishing higher. The ASX 200 closed up 15 points or 0.3% to 6,190. This week, the Aussie benchmark index fell 0.5%, and that is the first weekly loss in a month.

In commodities markets Light Crude Oil keeps the positive momentum close to four-month high, trading at 58.48, Brent oil also trading higher at $67.33/barrel just shy from highs at 68 supported by global production cuts and supply disruptions in Venezuela. Gold started the week flat at 1303. XAUUSD may find support at $1297 where the 50-day moving average crosses, ahead of testing 100-day simple moving average down to $1293.

Positive start for equities in early European trading with investors watching the developments surrounding Brexit, DAX30 is adding up 0.06 percent to 11,692, CAC40 is 0.13 percent higher at 5,412 while FTSE100 in London is 0.62 higher at 7,273. Any delay to the Brexit process will now need to be agreed by the other 27 EU members, with talks about possible conditions for an extension to be held before this week’s EU summit.

On the Lookout: The BOJ left monetary policy unchanged the previous week but moved to downgrade its assessment of the country’s outlook on exports, output as well as its take on the global economy.

Germany’s Ifo institute the previous week slashed its growth forecast of the economy this for 2019 to 0.6 percent. The think tank previously still saw the German economy expanding by 1.1% in January 2019. However, Ifo analysts predict the weakness as being short-lived and expect a rebound to 1.8% growth in 2020.

In the economic calendar today the only data due being the January trade balance for the Euro Area and the March NAHB housing market index reading in the US. Tomorrow The possibility of UK PM May bringing a 3rd version of the Brexit Withdrawal Agreement to Parliament will likely be the highlight. We’ll also get the January/February employment report in the UK, Q4 labour costs for the Euro Area and the March ZEW survey for Germany in the morning. In the US calendar for Tuesday, final January durable and capital goods orders revisions, and January factory orders are due. Late evening, we’ll get BoJ minutes from the January meeting.

Trading Perspective: The Aussie dollar is trading rallied and broke the 0.71 resistance zone supported by positive Sino US trade news. The Kiwi is also higher to daily highs at 0.6872. The US dollar index lost the 96 figure after last week failed attempt at 96.25.

GBPUSD Hourly (H1) Chart

GBPUSD rejected at 1.33 in the early European session and is trading at 1.3250; the bull trend is still intact even the high volatility scaring the traders as are closely watching the developments around Brexit votes and rumors. The technical picture is bullish for GBPUSD and a second attempt today at 1.33 looks possible. On the downside, major support will be found at 1.2990 where the 50 and 200-day moving averages are crossing. On the flip side, major resistance can be found at 1.3382 the yearly high.

In Pound futures markets, traders trimmed their open interest positions by around 2.6K contracts on Friday, the second consecutive drop. In the same direction, volume decreased for the third session in a row, this time by nearly 132.9K contracts.

EURUSD keeps the bullish tone making two-week high at 1.1350. The pair will find immediate resistance at the 50-day moving average at 1.1363 and is looking to break above in order to establish a new bullish trend targeting 1.14. The low from the previous Thursday session at 1.1277 provides solid support if the pair manages to break the 1.13 round figure. In Forex, options expire today, and we have at the 1.1250 strike 1.4bn of EURUSD cut at 10:00 Eastern Time.

On the EU political front, headwinds are expected to emerge in light of the upcoming EU parliamentary elections, where the focus of attention will be on the potential increase of the populist and right-wing option among voters.

In Euro future markets, open interest rose by around 7.1K contracts on Friday from Thursday’s final 535,858 contracts. On the other hand, volume shrunk significantly by around 186.3k contracts, recording the second drop in a row.

USDJPY is down 8 pips to 111.54 started the week from the high at 111.62. Resistance for the pair stands at 112 round figure while support can be found at the low from the previous week at 111.27.

In Yen futures markets, open interest and volume decreased by around 4.4K contracts and 76.3K contracts, respectively, Friday from the previous day.

USDJPY Hourly (H1) Chart

Global Equities Advance, Yen stabilizes at 111.70 After BoJ

March 15, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, banks, BOJ, Brexit, Brexit votes, EUR-USD, financial services, FTSE100, monetary policy, Nikkei225, trading platform

Asia stocks advanced in the last trading day of the week as traders spy a possible light at the end of the tunnel in talks between the UK and EU and China’s suggestion of an official state visit by President Xi linked to a trade deal will see the meeting take place in late April, a delay to the much-anticipated March finish. In Japan, the Nikkei225 main index rose 0.77 percent to 21,450, and the Hang Seng benchmark in Hong Kong finished 0.90 percent higher at 29,109. The Shanghai Composite finished 0.91 percent higher at 3,017, while stocks in Australia slipped into negative territory in the final minutes of the session, weighed down by losses in the financial, materials and healthcare sectors. The ASX 200 lost 4 points or 0.1% to 6,175. Over the week, the benchmark index fell 0.5%, and that is the first weekly loss in a month.

In commodities markets Light Crude Oil keeps the positive momentum at the four-month high, trading at 58.78, Brent oil also trading higher at $67.44/barrel a few cents lower from yesterdays high at 68 supported by global production cuts and supply disruptions in Venezuela. Gold started a solid rebound in Asian session from the lows at 1293 to the highs at 1301 zone. XAUUSD may find support at $1297 where the 50-day moving average crosses, ahead of testing 100-day simple moving average down to $1293.

Positive start for equities in early European trading with investors watching the developments surrounding Brexit, DAX30 is adding up 0.07 percent to 11,595, CAC40 is 0.34 percent higher at 5,367 while FTSE100 in London is 0.52 higher at 7,222. On Thursday UK ministers voted by 413 to 202 in favour of delaying Brexit. Any delay to the process will now need to be agreed by the other 27 EU members, with talks about possible conditions for an extension to be held before next week’s EU summit.

On the Lookout: The BOJ left monetary policy unchanged but moved to downgrade its assessment of the country’s outlook on exports, output as well as its take on the global economy.

Germany’s Ifo institute yesterday slashed its growth forecast of the economy this for 2019 to 0.6 percent. The think tank previously still saw the German economy expanding by 1.1% in January 2019. However, Ifo analysts predict the weakness as being short-lived and expect a rebound to 1.8% growth in 2020.

In the US economic calendar today we wait for the Canadian manufacturing sales report at 12:30GMT, followed by the US industrial output and capacity utilization data at 13:15GMT. The US JOLTS job openings, and UoM consumer sentiment releases will be released at 14:00GMT. The oil traders will look forward to the US Baker Hughes oil rigs count data at 17:00GMT for clues on the sustainability of the recent oil rally.

Trading Perspective: The Aussie dollar is trading on the green and continues to edge toward the 0.71 zone supported by positive Sino US trade news. The Kiwi is also higher to daily highs at 0.6858. The US dollar index stabilizes around 96 after a failed attempt at 96.25.

GBPUSD Hourly (H1) Chart

GBPUSD has recently challenged the 1.3363 July 2018 high, reaching 1.3382 before falling back to 1.32 in expected correction. The bull trend is still intact even the high volatility scaring the traders as are closely watching the developments around Brexit votes and rumors. The technical picture is bullish for GBPUSD even today lost the 50-hour moving average at 1.3233. On the downside, major support will be found at 1.2990 where the 50 and 200-day moving averages are crossing. On the flip side, major resistance can be found at 1.3382 the yearly high.

In Pound futures markets the open interest shrunk by nearly 2K contracts on Thursday from the previous session and following three consecutive daily builds. In the same direction, volume retreated for the second straight session, this time by around 5.5K contracts.

EURUSD keeps the bullish tone above 1.13 that started this week in an attempt to regain some of the previous week losses. The pair is trading above 1.13 for the second day and is looking to break above 1.1342 the high from March 13th in order to establish a new bullish trend targeting 1.14. The low from yesterday session at 1.1277 provides solid support if the pair manages to break the 1.13 round figure.

In Euro future markets, traders added around 6.5K contracts to their open interest positions on Thursday from Wednesday’s final 533,046 contracts, reverting two consecutive drops. Volume, instead, shrunk by almost 69K contracts after three builds in a row.

USDJPY rallied to 111.89 following the latest BoJ monetary policy update but soon corrected at 111.67 as it balances out the BOJ weakening economic outlook on exports and production and a report that North Korea is considering to suspend talks with the US on denuclearisation. Resistance stands at 112 round figure while support can be found at the low from yesterday at 111.27.

In Yen futures markets, open interest rose for the second consecutive session on Thursday, this time by around 8.5K contracts. Volume, in the meantime, extended the uptrend and rose by nearly 25K contracts.

USDJPY Hourly (H1) Chart

Bulk up for another Pound Roller Coaster Today

March 13, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, banks, Brexit, EU Parliamentary elections, European Council, EURUSD, FTSE100, FX trading, GBPUSD, trading platform, yen futures

Brexit uncertainties weighed on Asian markets, and in Japan, the Nikkei225 main index lost 0.99 percent to 21,290, and the Hang Seng benchmark in Hong Kong gave up 0.39 percent at 28,920. The Shanghai Composite shed 1.09 percent at 3,026, while stocks in Australia has extended its longest losing streak for the year, recording loses for a fourth straight day with geopolitical concerns continuing to weigh on the local market. Soft US inflation data and further Brexit uncertainties weighed on the ASX 200 as the index fell 13 points or 0.22% to close the session at 6161.2.

In commodities markets, the Crude oil added 30 cents to $57.18/barrel while Brent oil is 21 cents higher at $66.89/barrel. Gold is trading at the daily top around $1306 after yesterday managed to break above the $1300 resistance zone. The precious metal price gets a boost from US-China trade deal, and Brexit uncertainties that favor safe havens. XAU may find support at $1297 where the 50-day moving average crosses, ahead of testing the 100-day simple moving average down to $1293.

Soft tone is prevailing in early European trading as investors watch the developments surrounding the Brexit frontier and can offer the intermediate direction to markets. DAX30 is giving up 0.13 percent to 11,507, CAC40 is 0.28 percent higher at 5,286 while FTSE100 in London is flat at 7,151.

On the Lookout: Yesterday, PM Theresa May suffered another defeat on her Brexit deal as expected, but the defeat was smaller than the first time around (149 versus 230 last time), and 40 Conservative MPs switched, including the former Brexit secretary David Davis. Today, the UK government announced temporary cuts to the import tariffs on agriculture and cars in the case of a no-deal Brexit.

In the US economic calendar, the main event will be the release of durable goods orders data, followed by PPI figures that might influence the US Dollar price dynamics and eventually produce some short-term trading opportunities.

Trading Perspective: The Aussie dollar is trading almost unchanged the last hours at the 0.7065 zone against the news and a big drop in the Westpac consumer confidence index. The Kiwi is losing 30 pips to daily lows at 0.6835. The US dollar index breached the lower band of the recent trading range between 97 and 97.70 and as of writing it is trading to daily lows giving up 0.12 percent at 96.90.

GBPUSD Hourly (H1) Chart

GBPUSD: Volatility is the name of the game for the pair this week as good and bad news crossing the wires. Traders are closely watching the developments around Brexit votes and rumors, and we can see huge moves in the pair.

We have a busy Brexit Calendar, here are the main upcoming events:

13th March – Parliamentary vote on opposing “no deal” exit option
14th March – Parliamentary vote on extending negotiations/Article 50
21st – 22nd March – EU Leaders’ Summit
29th March – Article 50 end date
9th May – European Council (heads of state) meeting
18th – 23rd May – EU Parliamentary elections
20th – 21st June EU Leaders’ Summit

The technical picture is bullish for GBPUSD, and an attempt to 1.33 area looks possible. On the downside, major support will be found at 1.2990 where the 50 and 200-day moving averages are crossing. On the flip side, major resistance can be found at 1.3190, and a break above can lead the way to 1.3260 zone.

Open interest in Pound futures markets increased modestly for the second straight session on Wednesday, while volume extended the uptrend for yet another session, this time expanding by around 76.1K contracts.

EURUSD Hourly (H1) Chart

EURUSD started the day higher at 1.1292 area in an attempt to regain some of the previous week losses. The pair is trading in the middle of the range between the 100 and 200-day moving averages targeting to conquer the 1.13 area. The low from yesterday session at 1.1244 provides immediate support, while the key support for the pair stands at yearly lows at 1.1175.

In Euro future markets, traders reduced their open interest positions by nearly 9.9K contracts on Tuesday from the previous day. Volume, instead, rose for the second session in a row, this time by around 162.2K contracts, the largest daily build so far this year.

USDJPY continues the choppy activity around 111.30 with low volume that opens the door for the continuation of the sideline theme in the mid 111.00 for the short-term horizon.

In Yen futures markets open interest shrunk by more than 2.7K contracts on Tuesday vs. Monday’s final 199,681 contracts, extending the choppy activity so far this week. Volume, instead, rose by more than 14.3K contracts, reversing the previous day drop.

Sterling Soars on Positive Brexit News

March 12, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Article 50, banks, Brexit, Capital Markets, CME group, ECB, economy, EUR-USD, Kuroda, monetary policy, Theresa May, trading platform

Positive Brexit headlines showed that Theresa May managed to get legal assurances from EU on the on Irish backstop boosting sentiment in Asian trading. In Japan, the Nikkei225 main index added 1.79 percent to 21,503 and the Hang Seng benchmark in Hong Kong gained 1.46 percent at 28,920. The Shanghai Composite rose 1.10 percent at 3,060, while stocks in Australia traded in positive territory until the final minutes of the session. The ASX 200 finished 5 points lower or 0.1% to 6,174.

In commodities markets, the Crude oil is trading 0.5 percent higher at $57.08/barrel while Brent oil is 0.4 percent higher at $66.84/barrel. Gold trading started softly at $1295 after hitting the daily high at $1297 below the major resistance at $1300. The precious metal price may find support at $1280 ahead of testing the 100-day simple moving average down to $1265.

On the Lookout: Australia’s ANZ-Roy Morgan Consumer Confidence nosedived to 109.5, a fall of 4.6% from the previous week’s reading.

During the Wall Street session, economic calendar includes the US Feb CPI report at 12:30GMT and the Meaningful Parliamentary vote on the UK PM May’s Brexit deal due later at 19:00GMT. Also, the US API crude stockpiles data that will be released at 21:30GMT.

In Central Banks events we have the speech by the FOMC member Brainard. Speech by Reserve Bank Deputy Governor Guy Debelle. On Thursday, the BOJ is expected to keep rates unchanged. Kuroda speaks as well and focus will be on whether the signals the potential for more easing due to lower growth and inflation expectations.

Trading Perspective: The Aussie dollar is trading higher the last hours reaching the 0.7075 zone against the downbeat NAB Australian business survey. The Kiwi, also advanced to daily tops at 0.6845, having benefitted from upbeat stocks and oil prices. The US dollar index breached the lower band of the recent trading range between 97 and 97.70 as investors sentiment improves.

GBPUSD Hourly (H1) Chart

GBPUSD: The good news from Brexit frontier helped sterling to break above all the major short term resistances reaching up to 1.3265 in the Asian session. Traders are closely watching the developments around Brexit votes and rumors, and we can see huge moves in the pair.

It will be a busy Brexit Calendar this week, here are the main events

12th March – Next “meaningful vote” on Brexit in UK Parliament
13th March – Parliamentary vote on opposing “no deal” exit option
14th March – Parliamentary vote on extending negotiations/Article 50
21st – 22nd March – EU Leaders’ Summit
29th March – Article 50 end date
9th May – European Council (heads of state) meeting
18th – 23rd May – EU Parliamentary elections
20th – 21st June EU Leaders’ Summit

The technical picture is bullish for GBPUSD, and an attempt to 1.33 area looks possible. On the downside, major support will be found at 1.2990 where the 50 and 200-day moving averages are crossing.

Open interest in GBP futures markets rose by nearly 2.6K contracts on Monday from the previous session, reverting seven consecutive daily drops according to preliminary figures from CME Group. Volume rose for the third session in a row, this time by nearly 86K contracts, the largest daily build so far this year.

EURUSD started the day higher at 1.1280 area in an attempt to regain some of the previous week losses. The pair is trading in the middle of the range between the 100 and 200-day moving averages and the RSI has reached overbought level.

In Euro future markets, traders added around 21.2K contracts to their open interest positions at the beginning of the week from Friday’s final 538,702 contracts, reverting the previous drop. In the same direction, volume increased by around 46.4K contracts.

EURUSD Hourly (H1) Chart

USDJPY is consolidating in mid 111 area searching for the next move that might start after tomorrow’s speech from BoJ’s Kuroda.

In JPY futures markets, open interest increased by almost 5.8K contracts at the beginning of the week from Friday’s 195,906 contracts. On the other hand, volume shrunk for the first time after three consecutive builds, this time by around 15.6K contracts.

GBPUSD Breaks Below 1.30 as we Enter a Heavy Brexit Week

March 11, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian Markets, banks, Brexit, Donald J. Trump, FED, Financial markets, forex markets, Powell, trading platform, UK lawmakers

It has been a positive start to the new trading week as Asian markets recorded gains across the board. Major US indices on Friday fell for five straight days. In Japan, the Nikkei225 main index added 0.47 percent to 21,125 and the Hang Seng benchmark in Hong Kong gained 0.59 percent at 28,393. The Shanghai Composite rising 0.96 percent at 2,998, while The Aussie stockmarket finished 0.40 percent lower to 6263.

In commodities markets, the Crude oil gains 60 cents to $ $56.65/barrel while Brent oil is 48 cents higher to $65.95/barrel. Gold is trading flat at $1298 after Fridays ten dollar rally. The precious metal price may find support at $1280 ahead of testing the 100-day simple moving average down to $1265. The yield on 10-year Treasuries held at 2.6393 percent.

On the Lookout: The Japan February preliminary machine tool orders came at -29.3% vs. -18.8% prior. The German government is said to now expect 2019 GDP growth of 0.8% The previous revision to their growth forecast for the economy stood at 1.0% for 2019 from 1.8% last.

In our trading calendar during the Wall Street session, the US retail sales data will be published at 12:30GMT. BOE MPC member Haskel’s speech will be closely followed at 13:00GMT. The US traders may receive some fresh trading impetus from the US President Trump’s budget release at 15:30GMT.

UK GDP for January will be released Tuesday with the expectations for 0.2% vs. -0.4% last month. US durable goods orders for January will be released on Wednesday.

In Central Banks events for the week, we have Fed’s Powell speak on Monday at 12:00GMT. On Tuesday, March 12 Speech by Reserve Bank Deputy Governor Guy Debelle. Thursday, the BOJ is expected to keep rates unchanged. Kuroda speaks as well and focus will be on whether he signals the potential for more easing due to lower growth and inflation expectations.

Trading Perspective: In forex markets, the Aussie dollar is adding some pips and currently trading at the daily highs to 0.7041, while the Kiwi regained the 0.68 level amid US dollar weakness. The US dollar index has now established a trading range between 97 and 97.70.

GBPUSD Daily Chart

GBPUSD: Brexit concerns returned to FX markets amid increased odds of the PM Theresa May’s Brexit deal rejection by the UK lawmakers ahead of Tuesday meaningful vote. The Cable in Asian trading session broke below the 1.3000 level and reached three-week lows near 1.2957.

It will be a busy Brexit Calendar this week, here are the main events

12th March – Next “meaningful vote” on Brexit in UK Parliament
13th March – Parliamentary vote on opposing “no deal” exit option
14th March – Parliamentary vote on extending negotiations/Article 50
21st – 22nd March – EU Leaders’ Summit
29th March – Article 50 end date
9th May – European Council (heads of state) meeting
18th – 23rd May – EU Parliamentary elections
20th – 21st June EU Leaders’ Summit

GBPUSD during Asian session breached the all-important 50 and 200-day moving averages deteriorating the long term technical picture, now a test of the 100-day moving average at 1.2885 looks possible as we enter a volatile week for the pair.

In sterling futures market traders scaled back their open interest positions by just 602 contracts on Friday from the previous session, clinching the seventh drop in a row. On the other hand, volume rose for the second consecutive day, this time by around 66.4K contracts.

EURUSD started the week higher at 1.1242 area in an attempt to stabilize after last week’s heavy losses amid the backdrop of economic and political uncertainty in the Eurozone. The pair must reenter the two-month trading range lower band at 1.1240 in order to scare bears away.

The open interest in Euro futures market shrunk by more than 4.1K contracts on Friday, from Thursday’s final 549,347 contracts. In the same line, volume dropped significantly by nearly 151K contracts.

EURUSD Hourly (H1) Chart

USDJPY is adding 30 pips in early European session catching some bids around 111.20 in an attempt to turn the momentum to bullish mode. A break above the 100-day moving average at 111.40 can open the way for the upper bound in the recent trading range at 112.

In JPY futures markets open interest shrunk by around 12.1K contracts after three consecutive daily builds. On the other hand, volume increased for yet another session, this time by almost 36.8K contracts.

ECB’s Forward Guidance Rattles FX and Stock Markets

March 8, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: banks, Brexit, Capital Markets, China’s trade balance, ECB, economy, EUR-USD, FED, Greek economy, Italy budget, monetary policy

The ECB surprised markets, unveiling a new round of loans for the Eurozone Banks and pushing back its forward guidance, something that stock markets apparently hated. The US indices recorded a fourth straight session of losses, its longest slump so far in 2019 and Asian stocks took a hit on the chin. In Japan, the Nikkei225 main index lost 2.01 percent to 21,025, and the Hang Seng benchmark in Hong Kong lost 1.91 percent at 28,228. The Shanghai Composite sank 4.40 percent at 2,969, while the Aussie stock market traced the overnight losses on the Wall Street and extended the losses after China’s economic data showed that exports in USD terms plunged 20.7 percent year-on-year in February – the biggest drop in three years – highlighting the worsening global demand conditions. The ASX 200 benchmark finished the session at the day’s lows, down 60 points or 1% to 6,203. Over the week, however, the index rose 0.2% – its third weekly gain.

European stocks started the Friday session in red as expected with DAX losing 0.61 percent to 11,449, CAC40 giving up 0.40 percent to 5,246 while in London, the FTSE100 index is down 0.65 percent to 7,111, after ECB downgraded its economic growth and inflation forecasts, dampening investor sentiment.

In commodities markets, the Crude oil gave up 38 cents to $ $56.05/barrel while Brent oil lost 48 cents higher to $65.75/barrel. US crude oil production remains at a record high 12.1 million barrels per day, while net crude oil imports reached a 4-week high. Amid global markets volatile day, Gold finally finds a bid and currently is trading at $1294 adding 6 dollars, The precious metal price may find support at $1280 ahead of testing 100-day simple moving average down to $1265. The German Yields now fall to 0.54%, the lowest level since October 2016, as it drops by 8 bps from yesterday’s close of 0.62%. German Factory orders in January slumped heavily, and that is prompting a more negative response in the bond market in the near future. It certainly looks like we’re still on course towards hitting 0% yields in due time and this will present yet another unnecessary problem for the euro.

On the Lookout: During the Asian session, China released the latest trade figures. USD denominated exports fell by 20.7 percent, analysts were expecting a decline of 4.8 percent, and that compared with the 9.1 percent rise in January 2019. In today’s calendar, we’ll get interesting data from the U.S., and we’ll be closely watching for Brexit updates from Brussels. The US non-farm payrolls data is due for release along with housing starts. In Central Banks news the FED chairman will also deliver a speech.

Trading Perspective: In forex markets, the risk aversion carries over to opening trades in the European session, and that will continue to help fuel bids in JPY and CHF. US Dollar index is giving up 17 pips and now is trading at 97.45 after recent bid sends the U.S dollar index to fresh 2019 highs against a basket of currencies at 97.65. Traders should be careful at current level as I expect consolidation, amid oversold daily stochastics. AUDUSD trades to worst levels since the early-January flash crash, as China’s trade balance disappointed traders and the Kiwi is gaining some momentum and trades higher at 0.6780 having the low in Asian session at 0.6747. The EURJPY pair is under pressure, having dropped by 1.18 percent yesterday, its biggest single, day drop in over two months.

USDJPY tumbled to over one-month lows on the last Asian trading day of the week and now is testing the psychological support of 111.00, having breached the 200 and 100-day moving average support. The pair rejected at 112 tough barrier earlier in the week and only a convincing break above can start a new bullish trend. Strong support stands at the 50-day moving average at 109.91 where demand will be strong. The pair has reached oversold levels, so an intraday rebound looks possible.

In JPY futures markets the open interest increased for the third session in a row on Thursday, this time by just 630 contracts from Wednesday’s final 208,395 contracts. In the same line, volume rose once again by around 29K contracts.

USDJPY Daily Chart

GBPUSD: The pair is adding some pips and trading around 1.31 area keeping the long term positive momentum after the correction from yearly high. Long positions can deliver gains and only a break below the 200-day moving average at 1.2996 can scary the bulls away.

In Pound futures markets traders trimmed their open interest positions by just 483 contracts on Thursday from Wednesday’s final 192,572 contracts, recording the sixth consecutive drop at the same time. Volume, instead, is extending the choppy trade and rose by nearly 29.4K contracts.

EURUSD drop yesterday by 1 percent, the biggest single-day decline since Nov. 12th, 2018, and yesterday’s close at 1.1193 marked a downside break of the 3.5-month trading range of 1.12-1.15. Any strong Euro upside move is likely to come from a weaker US Dollar environment and not from EUR fundamental strength, but this is unlikely to occur in the next months as I expect the Fed to deliver one more hike. EURUSD is likely to test 1.100 by the end of summer and here is why:

Italy is one factor behind the euro-area slowdown, something that Mario Draghi admitted yesterday and we have mentioned that in our daily reports numerous times. We don’t expect any recovery any time soon for the Italian economy.

An old problem will resurface in Q3, and that is the Greek debt crisis.

Clouds appear above France as the latest economic figures disappointed analysts.

China and world trade slowdown will have a more negative impact for the euro rather than the US dollar.

Open interest in EUR futures markets rose significantly by nearly 14K contracts on Thursday from Wednesday’s figures, according to preliminary figures from CME Group. In the same line, volume increased by around 275.5K contracts. It was the most significant single day build so far this year in both open interest and volume.

EURUSD Daily Chart

ECB on the Spotlight, USDCAD Breaks Higher

March 7, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, banks, BOC, Brexit, commodities markets, ECB, EUR-USD, European stocks, Huawei, monetary policy, RBA, trading platform

Asian indices finished mostly lower today following a downbeat session in Wall Street. With trade negotiations frontier quiet, traders will turn their attention to Europe and focus on the monthly decision on interest rates by the European Central Bank and data on quarterly economic growth. Stock traders will also be following news that Chinese tech company Huawei has filed a lawsuit against the US government over the ban that restricts Fed agencies from using its products.

In Japan, the Nikkei225 index lost 0.65 percent to 21,456, and the Hang Seng benchmark in Hong Kong lost 0.89 percent at 28,779. The Shanghai Composite rising 0.14 percent at 3,106, while The Aussie indices edged higher on Thursday, recording gains for the sixth time in seven days and touched a six-month high. The ASX200 has gained by around 15 percent from mid-December 2018, however, the index is approaching 6300 points which is a level the market has had trouble breaking through convincingly in recent years.

European stocks started the session soft with DAX losing 0.32 percent to 11,550, CAC40 giving up 0.14 percent to 5,281 while in London the FTSE100 index is down 0.40 percent to 7,167. Geopolitics continues to dominate sentiment with Brexit debate in Europe pointing to the possibility of another heavy defeat for Prime Minster May.

In commodities markets, the Crude oil added 15 cents to $ $56.37/barrel while Brent oil pushed 29 cents higher to $66.25/barrel. US crude oil production remains at a record high 12.1 million barrels per day, while net crude oil imports reached a 4-week high. Although global markets had a volatile day, Gold stayed in relatively tight trading ranges, the price attempted a minor rebound near $1290 level amid subdued Treasury yields but rejected and currently the precious metal is trading at $1286.49. The precious metal price may find support at $1279 ahead of testing 100-day simple moving average down to $1265. Treasury yields moved lower in the US with the 10-year yield at 2.71%. In Europe, Bond yields have moved lower to 15bps at the 10-year point.

On the Lookout: The Organisation for Economic Co-operation and Development (OECD) has recently announced that it cut its 2019 global growth forecast to 3.3% from 3.5% and said that factors such as trade war, policy uncertainty, and weakening confidence would weigh on global growth. The Bank of Canada (BoC) left the policy rate on hold at 1.75%. ECB meeting and Mario Draghi’s press conference will be the main risk event today, but up until then, I would expect EURUSD to trade cautiously around the 1.1300.

The Reserve Bank of Australia at Tuesday’s March board meeting, left the official cash rate unchanged for the 31st month in a row, as was expected, at a record low level of 1.5% but noticed that the economic growth might have slowed in the second half of 2018.

Trading Perspective: In forex markets, US Dollar index is giving up two pips and now is trading at 96.86, the NZDUSD is gaining some momentum and trades higher at 0.6780 with the high in Asian session at 0.6791.

USDJPY trading in just 20 pips range between 111.57 and 111.78 with traders undecided for the next move. The pair is facing the 112 tough barrier ahead, and only a convincing break above can start a new bullish trend. Strong support stands at the 100 and 200-day moving average at 111.30 where demand will be strong.

In JPY futures markets the open interest rose for the second session in a row on Wednesday, this time by around 1.3K contracts vs. Tuesday’s figures. Volume followed suit, up by more than 4.5K contracts after three consecutive daily declines.

GBPUSD: A Reuters poll of FX strategists, shows that the sterling could drop around 9% against USD to test the 1.2000 level should the UK leave the EU without a deal. A separate Reuters poll of economists on Wednesday showed the chance of a no-deal Brexit had fallen to 15 percent, but if the two sides do part ways without agreement, one forecaster predicted sterling could sink as low as parity to the dollar.

GBPUSD Hourly (H1) Chart

The pair yesterday managed to break above the 50-hour moving average giving a breath for the bulls. Pound now is targeting the next resistance at the 100-hour moving average at 1.3182. Strong support for the pair waits at 200-day moving average at 1.2996.

Open interest in Pound futures markets shrunk by just 895 contracts from the previous day, at the same time recording the fifth consecutive daily drop. In the same line, volume reverted Tuesday’s build and contracted by around 48.7K contracts.

EURUSD: European Central Bank (ECB) is expected to keep rates unchanged today and cut the growth outlook to warrant new loans – long-term refinancing operations. The latest ECB staff projections are very likely to show a downward revision of 2019 GDP growth from 1.7 percent in the December projections. Further, the inflation forecasts are likely to be largely unchanged at 1.6 percent, 1.7 percent and 1.8 percent for the period 2019-2021.

A quiet session for the pair will be today until ECB’s decision and press conference. In Euro futures markets, traders trimmed their open interest positions by around 1.6K contracts on Wednesday from Tuesday’s final 541,753 contracts. In the same line, volume reverted two consecutive daily builds and shrunk by around 10.5K contracts yesterday.

USDCAD: The Loonie dropped to 1.3446 against USD following the BoC which downgraded their global and domestic growth outlooks, dropping a pledge to lift rates to neutral, saying that “the outlook warrants policy interest rate that is below its neutral range.” The pair has entered a bullish trend, and an attempt to November highs at 1.36 looks possible.

USDCAD Daily Chart

Saxo Bank Provides Access to Trade in Mainland China Bonds to Qualified Institutional Clients

March 5, 2019 by Karthik Subramanian Leave a Comment Filed Under: Industry News Tagged: Bank of China, banks, Capital Markets, China A-Shares, Fan Xu, financial services, foreign exchange, Mainland China bonds, Saxo Bank

Copenhagen-based multi-asset broker, Saxo Bank in its announcement on Monday said that it had increased access to Chinese securities, further opening up the Chinese market for foreign investors.

Through Saxo Bank, qualified institutional clients can have access to and trade Mainland China bonds, which is one of the largest bond markets in the world with a total market size of $12 trillion. This new service is available through the Hong-Kong based Bond Connect Mechanism, Bond Connect Gateway.

In order to remain fully compliant to Chinese regulations by People’s Bank of China, the qualified investors will have access to 127 China bonds with CNH as a settlement currency through Saxo Bank. Saxo bank provides full digital access to these bonds via a “click to trade” functionality that allows foreign investors easy and automated access to a market that has been historically difficult for foreign investors.

Commenting on the news, Fan Xu, CEO of Greater China, Saxo Bank, said:

“Chinese securities are an increasingly important part of an international investors’ portfolio, as demonstrated by record inflows into Chinese stocks in January this year, as well as strong international inflows into Chinese bonds in 2018.

“At the same time, Chinese government bonds emerged among the best-performing government bonds of 2018. We are therefore proud to be the first to deliver full digital access to Chinese bonds to help our clients build strong diversified investment portfolios.”

The announcement is fully aligned to the company latest operational objective to increase its focus towards Chinese markets and strengthen its presence. The bank has taken a number of steps to improve its offering and will continue to broaden its offering related to the Chinese securities. In June last year, the broker had added China A-Shares to its service offering. The broker offers access to over 5,000 bonds, including more than 3.400 developed-market and 1,600 emerging-market bonds.

USDJPY keeps the Upbeat Tone, Asian Indices Mixed

March 5, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian indices, banks, Brexit, brokerage, economy, EUR-USD, financial services, FX trading, Sino-U.S. trade talks, trading platform

Asian indices finished mixed today following a solid start to the week on Monday. In Japan, the Nikkei225 index lost 0.44 percent to 21,726, and the Hang Seng in Hong Kong added just 0.04 percent at 28,977. The Shanghai Composite rising 0.90 percent at 3,054, the Aussie stocks have erased most of yesterday’s gains, hampered by falls in the Financial, Materials, and Healthcare sectors. The ASX 200 closed down 18 points or 0.3% to 6,199 – breaking a four-session winning streak.

In Wall Street at the close, the Dow Jones Industrial Average was down 0.79% at 25,819.65, while the S&P 500 had lost 0.39% to 2,792.81 and the Nasdaq traded 0.23% weaker at 7,577.57.

In commodities markets, the Crude oil lost 32 cents to $56.30/barrel while Brent oil fell 28 cents to $65.37 a barrel. Gold prices attempted a minor bounce near 1290 levels amid subdued Treasury yields, but rejected and currently, the precious metal is trading at $1285. US Dollar index is adding some pips above 96.70 outperforming in early European session all major currency pairs.

On the Lookout: The RBA at Tuesday’s March board meeting, left the official cash rate unchanged for the 31st month in a row, as was expected, at a record low level of 1.5% but noticed that the economic growth might have slowed in the second half of 2018.

The Chinese government made clear that removing tariffs on $200bn-worth of Chinese goods quickly was necessary in order to finalise any trade deal. One of the remaining sticking points is whether the tariffs would be lifted immediately or over a period of time.

On Tuesday the Euro macro calendar is a heavy-show, kicking-off with the Swiss February CPI report at 07:30 GMT. The February services PMI reports from across the Euro area economies, and the UK will dominate the headlines.

During the Wall Street session traders are looking for the releases of the services PMI from both Markit and ISM due at 14:45GMT and 15:00GMT respectively. Ahead of the PMIs, the US building permits will be released in at 12:30GMT and New Zealand’s GDT price index around 14:00GMT.

The main event today remains the BOE Governor Mark Carney’s testimony at 15:35GMT on Brexit, inflation, and the economy at the House of Lords Economic Affairs Committee, in London.

Trading Perspective: US dollar is holding firm while the Aussie dollar (AUDUSD at 0.7077) and kiwi (NZDUSD at 0.6791) are the laggards in narrow trading ranges affected by poor Chinese economic data once again as the European session kicks off.

USDJPY keeps the upbeat tone but is facing the 112 tough barrier ahead, and only a convincing break above can start a new bullish trend. Strong support stands at the 100 and 200-day moving average at 111.30 where demand will be strong.

USDJPY Daily Chart

In JPY futures markets the open interest and volume declined by 403 contracts and around 27.6K contracts, respectively on Monday.

GBPUSD is prolonging the rejection from last week’s 2019 tops beyond 1.3300 and currently trading at the 200-hour moving average canceling the short term bullish trend although long term uptrend holds well as the pair is far away from the reverting daily moving averages. I expect the pair to make an attempt to regain the 1.3208 level to reestablish the short term positive momentum.

Open interest in GBP futures markets shrunk for the third session in a row on Monday, this time by more than 3K contracts from Friday’s final 199,061 contracts, as per advanced data from CME Group. In the same line, the volume went down for yet another session, shrinking by nearly 42K contracts.

EURUSD offered bias is still intact for the pair as it approaches yesterday lows at 1.1310, and now it targets the support area at 1.1285 the low from January 24th, 2019, which if breached will drive prices down to yearly lows, a scenario that is not supported as the offers are diminishing below 1.13 level. On the upside, the common currency has to regain the 1.1352 figure where the 50 SMA in the hourly chart is crossing, to establish a short term uptrend.

In Euro futures markets, traders added nearly 4.8K contracts to their open interest positions on Monday from Friday’s final 530,097 contracts. Same happened with volume, reverting the previous drop and advancing by almost 6.7K contracts.

EURUSD Hourly (H1) Chart

USDJPY at Yearly High on Better US Q4 GDP

March 1, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, banks, Brexit, ECB, economic slowdown, economy, EUR-USD, FED, monetary policy, trading platform, US GDP

Asian markets traded broadly higher after positive Chinese economic data earlier today gave some optimism to markets with regards to concerns about the Chinese and global economic slowdown. The Nikkei 225 in Tokyo was the leader with gains over one percent closed at 21,602, the Hang Seng in Hong Kong added 0.52 percent to 28,970 while the Shangai Composite trading 1.52 percent higher at 2,990 boosted by the inclusion of more China shares in the MSCI index.

The Aussie stocks kicked off the new month in positive territory, extending February’s 5.2% gains, which was the best monthly gain since July 2016. Almost all sectors improved, with the exception of the Energy, Industrials and Materials sectors. The ASX 200 closed up 23 points or 0.4% to 6,192. Over the week, the index rose 0.4%. Fed Chairman Powell’s reiteration of ‘patience’ also added to positive sentiment in Asian stocks.

Gold prices refreshed two-week lows near 1309 levels, having faded its recovery at 1315. Both crude benchmarks traded with moderate gains, with WTI well above the 57 area.

European equities are likely to pick up from here so expect similar tones to prevail in the next two hours or so as the cash equity market opens in Europe.

On the Lookout: US Gross Domestic Product rose 2.9 percent for the year, just shy of the 3 percent goal set by the Trump administration. In Australia, the RBA Commodity Index SDR (YoY) came in at 9.1%, above analyst’s forecasts (7.3%) in February. The Japan Consumer Confidence Index registered at 41.5, below expectations (41.6) in February and China’s Caixin manufacturing PMI rebounded to 49.9 in Feb.

A poll of economists by Reuters showed that a majority of them believe that the European Central Bank (ECB) is likely to keep the interest rates at record lows until next year, in the face of dwindling Eurozone economic growth.

In economic calendar today we expect the core PCE price index and personal spending at 13:30GMT and the Canadian Q4 GDP report is slated for release. At 14:30-14:45 GMT, the Markit manufacturing PMI reports from both the US and Canada will be published. However, the US ISM manufacturing PMI and UoM consumer sentiment data due at 15:00 GMT will be on the spotlight. Next of relevance remains the speech by the FOMC member Bostic and Baker Hughes US oil rigs count data at 18:00GMT.

Trading Perspective: The Aussie dollar jumped after better than expected Caixin China manufacturing PMI for February breaking above the 0.71 barrier. The Kiwi failed to get a boost by the better macro news and has been trapped in 20 pips trading range just above 0.68 area.

EURUSD rejected yesterday for the second time at 1.14 but downside looks limited, I expect further consolidation in the near term between 1.1352 and 1.14. Only a convincing break above 1.14 can attract extra bids while a break below 1.1350 can force prices down to 1.13.

EURUSD Hourly (H1) Chart

In Euro futures markets traders scaled back their open interest positions by nearly 1.5K contracts on Thursday vs. Wednesday’s final 528,608 contracts. Volume, instead, rose sharply by around 67.5K contracts.

GBPUSD: Technical indicators positive picture is still intact for the pair after pullback at 1.3256, the RSI exit the overbought area, and the support at 1.3235 looks strong. A regain of 1.3280 area will attract bids to the yearly top.

GBP futures markets noted open interest shrunk after two consecutive builds, this time by almost 4.8K contracts. In the same line, volume dropped by more than 4K contracts, recording the second pullback in a row.

USDJPY trading to fresh 2019 peaks near the 111.80 mark after better GDP numbers in the USA. The pair easily cleared the 200-day moving average with increasing volume at 111.35, and now an attempt at the 112 round figure is the most possible scenario. The 200-day moving average at 111.40 now has turned to strong support.

Open interest in JPY futures markets increased for the second straight session on Thursday, this time by around 7.5K contracts from Wednesday’s final 190.827 contracts. In the same line, volume rose by almost 46.5K contracts.

USDJPY Daily Chart

Asian stocks Rallied, AUDUSD breaks above 0.71

Global Equities Advance, Yen stabilizes at 111.70 After BoJ

Bulk up for another Pound Roller Coaster Today

Sterling Soars on Positive Brexit News

GBPUSD Breaks Below 1.30 as we Enter a Heavy Brexit Week

ECB’s Forward Guidance Rattles FX and Stock Markets

ECB on the Spotlight, USDCAD Breaks Higher

Saxo Bank Provides Access to Trade in Mainland China Bonds to Qualified Institutional Clients

USDJPY keeps the Upbeat Tone, Asian Indices Mixed

USDJPY at Yearly High on Better US Q4 GDP

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