Asian stocks finished the session higher with Nikkei 225 index gaining 0.60 percent at 21,431, Hong Kong’s Hang Seng index jumping 0.86 percent to 27,472, while the Shanghai Composite added 0.2 percent to 2,761. Early gains in Aussie stocks couldn’t be sustained on Wednesday with the market held back by weakness in retail, banking, telco, IT and utility stocks. The ASX 200 ended down 10 points or 0.2% to 6,096. Crude oil rose 22 cents to $56.67/barrel while Brent added 7 cents to $66.52 per barrel. Gold trading at 10-month highs of $1,342 extending its rally sparked in part by signs that the world’s central banks are turning dovish.
European equities started the session higher with trader’s eyes on more Brexit talks between Prime Minister Theresa May and European Commission President Jean-Claude Juncker. DAX added 0.52 percent to 11,367, and CAC40 in Paris rose 0.15 percent to 5,168 while FTSE100 in London trades moved 0.32 percent higher at 7,201.
On the Lookout: The National Association of Homebuilders’ monthly confidence index rose four points to a seasonally-adjusted figure of 62 in February, asking the second improvement in a row for the index. Last month, the index – which tracks views of current sales conditions – gained three points to a reading of 67. Despite the strong reading, the NAHB cautioned that affordability remains a critical issue. The industry body pointed out that builders felt regulations were still “excessive” and that the Trump administration’s tariffs had made raw materials much more expensive.
Today, we have an all-important release of the Minutes of the Federal Open Market Committee (FOMC) January meeting, which is due at 19: 00GMT.
Trading Perspective: EURUSD keeps the positive momentum from yesterday trading above 1.1350 area turning to bullish sentiment for the short term as the pair broke above all the major hourly moving averages. The pair will face strong resistance at the 1.1385 region where the daily averages are crossing. A break above that level can drive prices up to yearly highs. On the downside, immediate resistance will be met at 1.1320 the 50-hour moving average.
Open interest in EUR futures markets rose by more than 1.1K contracts on Tuesday from Friday’s final 541,573 contracts, recording the second advance in a row. In the same line, volume rose significantly by around 96.8K contracts.
GBPUSD: The optimism from Sterling investors is impressive given that the EU has continued to say that they will not accept a time limit on the Irish backstop arrangement and refuse to make any changes to the already agreed deal. The pair broke the 200-day moving average yesterday attracting the bulls and now may challenge the 1.31 level.
Open interest in GBP futures markets increased by around 6.6K contracts on Tuesday vs. Friday’s final 196,489 contracts, according to advanced figures from CME Group. Volume followed suit and clinched the second build in a row, this time by around 83.1K contracts.
USDJPY: The Bank of Japan (BoJ) governor Kuroda sparked a sharp Yen sell-off across the board after he said that the BoJ is ready to ease further if there is any difficulty in achieving the 2% price target. The pair is trading around 110.80 in early European session with the bulls targeting the weekly high at 111.13. Support for the pair can be met at the 50-hour moving average around 110.64.
In JPY futures markets investors scaled back their open interest positions by just 347 contracts on Tuesday from Friday’s final 185,212 contracts, clinching the second straight drop. Volume, instead, rose by nearly 13.2K contracts, prolonging the choppy performance as of late.