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Dollar Slips, Yields Fall, Brexit Fears Hound the Pound

by Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: , , , , , , , , , , , , , , , ,

Summary: The Dollar eased against most of its rivals following softer June Housing Starts and Building Permits data. Expectations that the Fed would lower interest rates led to a fall in US bond yields. Stronger-than-forecast US retail sales data had lifted the Greenback yesterday. Fears of a no-deal Brexit continued to hound the Pound, which hit fresh 27-month lows at 1.2382 before rebounding to 1.2430. UK Brexit Secretary Steve Barclay said that the risk of a no-deal split with the European Union is “under-priced.” The Euro hit a one-week low at 1.11998 before climbing back to 1.1225, at the lower end of its recent range. Expectations of an easing by the ECB has kept the Single Currency on the defensive. The Australian Dollar was little changed at 0.7010 (0.7013 yesterday). USD/JPY slipped to 107.99 from 108.27 on lower US yields. The benchmark US 10-year treasury yield was down 6 basis points to 2.05%. Japan’s 10-year JGB yield was unchanged at -0.13%.

Forex Factory US Building Permits - 18 July 2019

Forex Factory US Building Permits – 18 July 2019

Wall Street stocks fell on weaker than expected earnings.
US June Housing Starts missed forecasts at 1.25 million from 1.26 million. June Building Permits fell to 1.22 million from 1.29 million, and against an expected 1.30 million.
The Fed’s Beige Book economic report saw that the longest US economic expansion remained intact amidst trade risks.

Daily FX EUR USD Chart - 18 July 2019

Daily FX EUR USD Chart – 18 July 2019

  • EUR/USD – The Euro finished slightly higher at 1.1225 after trading in a narrow 1.11998 to 1.123336 range overnight. German 10-year bond yields were 4 basis points lower to -0.29%. The one week low of 1.1200 is providing solid support.
  • GBP/USD – Sterling slumped to a fresh 27 week low at 1.23820 before rebounding to 1.2430. Traders continued to sell the Pound on the perception that risks are growing for the UK to leave the EU without a transition deal in place. The latest Commitment of Traders report saw speculators dump the Pound for the 4th straight week.
  • USD/JPY – The Dollar eased against the Yen to 107.99 from 108.27 yesterday, down 0.22%. Lower US bond yields continue to drag the Greenback lower. Speculative JPY shorts were trimmed by a large USD 1 billion.
  • AUD/USD – the Aussie Dollar was little changed at 0.7013 (0.7010 yesterday). Australia’s June Employment report is released later today. The dovish leaning RBA kept the Aussie Battler in check, while speculative Aussie short covering supported the currency.

On the Lookout: Today sees Japan’s Trade Balance and Australia’s June Employment report in Asia. The lone European report today comes from Switzerland, reporting its June trade balance.
UK data follow with June Headline and Core Retail Sales, (month and annual). Finally, US Weekly Unemployment Claims and Philadelphia Fed Manufacturing Index finish the day’s reports.

Trading Perspective: With FX trading in tight summer ranges we look at market positioning. Saxo Bank’s Bloomberg Commitment of Traders/CFTC report for the week ended July 2 (delayed due to the US 4th of July holiday) saw continued reduction of total net USD longs by speculators. According to Saxo Bank, bullish Dollar bets have now been cut by 65% from the late April peak. The bulk of these cuts have been against the Euro, Canadian Dollar and Yen. The main exception among the major currencies was Sterling (not surprising) where net GBP shorts have increased for the 4th straight week.

Saxo Bank - Bloomberg COT Report - 18 July 2019

Saxo Bank – Bloomberg COT Report – 18 July 2019

  1. EUR/USD – The Euro held the support level around 1.1200 before rallying to close at 1.1225. This morning the Single Currency opens at 1.1229. Immediate resistance lies at 1.1240 (overnight high traded 1.12336). The next resistance level can be found at 1.1280. Immediate support at 1.1200 should hold with the next support level at 1.1180. The latest COT report was net short Eur bets cut further to -EUR 31,733 from the previous week’s -EUR 56,295. Look for a likely range today of 1.1210-1.1260. Prefer to buy dips.
  2. GBP/USD – Sterling continues to trade heavy with the risk skewed to the downside. That said, Sterling short bets for the week ended July 2 increased to -GBP 64,244 contracts from the previous week’s -GBP 58,937. This is the 4th straight week of GBP selling. Total short GBP short contracts stand at US$5.69 billion. That is a danger sign despite risks of the Pound grinding lower. Immediate support lies at 1.2380 (overnight low at 1.2382) followed by 1.2340. Immediate resistance lies at 1.2460 and 1.2500. Look for a likely range today of 1.2385-1.2485. Prefer to buy dips.
  3. USD/JPY – The Dollar fell against the Yen on the lower US 10-year yield. USD/JPY closed at 108.00 after trading to 107.971 overnight. Immediate support lies at 107.80 followed by 107.60. Immediate resistance can be found at 108.30 and 108.60. The latest COT report was net speculative JPY shorts cut to -JPY 1,227 (week ended July 2) from the previous week’s -JPY 10,147. That’s virtually square. Look for a likely range today of 107.80-108.30. Just trade the range shag on this one.
  4. AUD/USD – The Aussie was little changed, closing at 0.7013. The dovish tone from the RBA meeting minutes failed to push the currency any lower as shorts continue to support the Battler. Australia is forecast to have created 9,000 jobs in June from May’s 42,300 while the Jobless rate is expected to remain at 5.2%. The latest COT report saw speculative Aussie shorts trimmed to -AUD 58,735 contracts (week ended July 2) from -AUD 66,320. AUD/USD has immediate support at 0.6990 (overnight low 0.69962) followed by 0.6960. Immediate resistance can be found at 0.7030 (overnight high 0.70249) and 0.7060. Look to trade a likely range of 0.6990-0.7040. Prefer to buy dips.

Happy Thursday and trading all.

Equities Rally on Dovish Central Banks

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , , , , , ,

Asian indices finished higher today on dovish Central Banks ahead of Wednesday’s FOMC policy meeting. The Nikkei225 finished 1.72 percent higher to 21,333 the Hang Seng benchmark in Hong Kong, finished 2.29 percent higher at 28,136. The Shanghai Composite finished 1.19 percent higher to 2,922, while in Singapore the FTSE Straits Times index finished 1.47 percent higher to 3,286. Australian equities finished to fresh 11.5 year highs on Wednesday, with the ASX200 closed at 6648 after a gain of 1.2% or 78 points.

AUDUSD Daily Chart

European session started higher today in a quiet session amid renewed worries about trade relations between the US and China and a rise in geopolitical tensions. DAX30 is adding 0.77 percent to 11,999 CAC40 is 0.07 percent higher at 5,389 while the FTSE MIB in Milan is trading 0.35 percent lower at 20,552. The London Stock Exchange is 0,02 percent lower to 7,356 as the Brexit uncertainty continues.

In commodities markets, crude oil made an impressive rally yesterday during US session at 54.07 despite geopolitical tensions around the globe. Oil is down almost 18% from the high in late April, wiping out about half of its rally earlier this year, due to increased global trade worries. Brent oil also trades higher to $62,27 per barrel as major oil producers have yet to agree on adjustments on output. Gold trades flat at 1,345 as bulls are in full control. The precious metal holds above all the major daily moving averages and strong resistance will be met at 1,357 the yearly high.      

In cryptocurrencies market, bitcoin (BTCUSD) continues higher today recovering some of yesterday losses, the daily low for BTC was at 8,930 and the daily high at 9,200. Immediate support for BTC stands now at $9,000 round figure while next support stands at 8,500 the previous week high. On the upside, strong resistance now stands at 9,477 the high from yesterday while I expect extra pressure from sellers at 9,600 and then at 10,000. Ethereum (ETHUSD) trades flat at 267, with capitalization now to 28.7 billion. On the upside, the immediate resistance stands at 287 the recent high while the support stands at 250 round figure, Litecoin (LTCUSD) adds 5 dollars to 134. The crypto market cap now stands above $283.0B.

On the Lookout: President Trump said he “had a very good telephone conversation” with China’s leader President Xi and that they will have “an extended meeting next week at the G20 [summit] in Japan”. This settled some concerns that both leaders might not meet.

Investors focus will be this week on the FOMC meeting today. The US central bank is expected to keep rates unchanged at 2.5% this week. The week also sees the Bank of Japan and Bank of England policy meetings.

In macro news from America, we await the Canadian Consumer Price Index (CPI) report to be released at 12:30GMT. The US EIA weekly crude stockpiles data will drop in at 14:30GMT.  11:00GMT – US MBA mortgage applications w.e. 14 June.

Trading Perspective: In forex markets, USD trades slightly flat at 97.67 ahead of the Fed policy meeting, while the Aussie dollar managed to rebound yesterday from the low around 0.68 to 0.6880 while Kiwi also trades higher at 0.6520.

GBPUSD trades flat at 1.2545 after the rebound yesterday from 1.25, as the bearish momentum for Cable is still intact amid growing concerns over the risk of no deal Brexit. Major support now stands at 1.25 round figure which if broken might accelerate the slide further towards 1.2480. On the upside immediate resistance now stands at 1.26 while more offers will emerge at 1.2641 the 50-hour moving average. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Sterling futures markets the open interest increased by 143 contracts, volume reversed three consecutive drops and gained almost 21.7K contracts.

central banks

GBPUSD Daily Chart

EURUSD trades flat just below the 1.12 mark ahead of the important FOMC policy meeting. The pair trades below the 50-day moving average, on the upside the immediate resistance stands at 1.1232 the 100-hour moving, while more offers will emerge at 1.1270 the 100-day moving average. Support stands at 1.12 round figure, while more bids will emerge at 1.1150 two week lows.

In euro futures markets, the open interest rose by around 13K contracts on Tuesday, volume gained nearly 116.7K contracts.

USDJPY is under pressure today down to 108,33, as traders turn cautious ahead of the FOMC policy meeting. The pair hit the low at 108.21 and the high at 108.61. The pair will find support around 108.00. On the upside, immediate resistance for the pair now stands at 109 round figure. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to FED next move later today.

In Yen futures markets, the open interest rose by around 3.7K contracts on Tuesday, volume followed suit, up by nearly 88K contracts.

USDCAD is pressured today down to 1.3377 as the sharp rebound in crude oil prices, Canada’s main export item seems to have added further strength in the Canadian Dollar (CAD). The pair will find immediate support at the 200-day moving average around 1.3250 while extra support stands at 1.3200 round figure. On the upside, immediate resistance now stands at the 1.35 zone before an attempt to 1.3560 recent high from 31st May. 

Markets Calm ahead of FED Policy Meeting

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , , ,

Asian indices finished higher today except for Nikkei ahead of Wednesday’s FOMC policy meeting and as trade worries resurface. The Nikkei225 finished 0.72 percent lower to 20,972, the Hang Seng benchmark in Hong Kong finished 1.20 percent higher at 27,555. The Shanghai Composite finished 0.09 percent higher to 2,890, while in Singapore, the FTSE Straits Times index finished 0.96 percent higher to 3,237. Australian equities added to early gains thanks to further signs of RBA rate cuts with the ASX 200 index lifting by 0.6 per cent or 39.1pts to 6570.

European session started higher today in a quiet session amid renewed worries about trade relations between the US and China and a rise in geopolitical tensions. DAX30 is adding 0.77 percent to 11,999, CAC40 is 0.07 percent higher at 5,389, while the FTSE MIB in Milan is trading 0.35 percent lower at 20,552. The London Stock Exchange is 0,02 percent lower to 7,356 as the Brexit uncertainty continues.

In commodities markets, crude oil trades lower at 51.67 despite geopolitical tensions around the globe. Oil is down almost 18% from the high in late April, wiping out about half of its rally earlier this year, due to increased global trade worries. Brent oil also trades lower to $60,57 per barrel as major oil producers have yet to agree on adjustments on output. Gold trades higher at 1,345 as bulls are in full control. The precious metal holds above all the major daily moving averages and strong resistance will be met at 1,357 the yearly high.      

XAUUSD Daily Chart

In cryptocurrencies market, bitcoin (BTCUSD) retreats from recent high as traders taking some profits off the table, the daily low for BTC was at 9,019 and the daily high at 9,477. Immediate support for BTC stands now at $9,000 round figure while next support stands at 8,500 the previous week high. On the upside, strong resistance now stands at 9,477 the high from Asian session while I expect extra pressure from sellers at 9,600 and then at 10,000. Ethereum (ETHUSD) trades flat at 268, with capitalization now to 28.7 billion. On the upside, the immediate resistance stands at 287 the recent high while the support stands at 250 round figure, Litecoin (LTCUSD) gives up 6 dollars to 129. The crypto market cap now stands above $283.0B.

On the Lookout: The minutes from RBA meeting released this morning at 11.30am AEST and have essentially confirmed that further easing is on its way. The central bank said that further easing is more likely than not, that lower rates are unlikely to risk a pick-up in borrowing and won’t risk a sharp inflation lift. RBA considers a rate cut in August and another in November as possible.

Investors focus will be this week on the FOMC meeting on Wednesday. The US central bank is expected to keep rates unchanged at 2.5% this week. The week also sees the Bank of Japan and Bank of England policy meetings.

In macro news from America, we await the US building permits for May.

Trading Perspective: In forex markets, USD trades slightly lower at 97.37 ahead of the Fed policy meeting, while the Aussie dollar makes new lows at 0.6832 while Kiwi breached the 0.65 mark and trades at 0.6495.

GBPUSD started the day making a new low at 1.2511 during the Asian session but from that level started a rebound during the European session and as of writing the pair is trading at 1.2540 close to daily high,  as the bearish momentum for Cable is still intact amid growing concerns over Brexit. Major support now stands at 1.25 round figure which if broken might accelerate the slide further towards 1.2480. On the upside immediate resistance now stands at 1.26 while more offers will emerge at 1.2641 the 50-hour moving average. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Sterling futures markets the open interest increased by 1K contracts, volume shrunk for the third day in a row, by around 43.5K contracts.

EURUSD started the day on positive foot trading at 1.1240 ahead of the important FOMC policy meeting. The pair trades above the 50-day moving average, on the upside the immediate resistance stands at 1.1262 the 100-hour moving, while more offers will emerge at 1.1270 the 100-day moving average. Support stands at 1.12 round figure, while more bids will emerge at 1.1150 two week lows.

In euro futures markets, the open interest shrunk by 1.3K contracts on Monday, volume, in also went down by around 215.1K contracts.

fomc policy

EURUSD Daily Chart

USDJPY is under pressure today down to 108,21, as traders turn cautious ahead of the FOMC policy meeting. The pair hit the low at 108.20 and the high at 108.57. The pair will find support around 108.00, on the upside immediate resistance for the pair now stands at 109 round figure. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to FED next move on Wednesday.

USDCAD started in quite a mood the week and trading as of writing at 1.3408 as the retreat in crude oil prices, Canada’s main export item seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 200-day moving average around 1.3250 while extra support stands at 1.3200 round figure. On the upside immediate resistance now stands at the 1.35 zone before an attempt to 1.3560 recent high from 31st May.

Gold Shines, Breaks above 1,354

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , , ,

 Asian indices finished mostly lower as trade worries resurface and the attack in two oil tankers in Gulf of Oman weighing on traders sentiment. The Nikkei225 finished 0.40 percent higher to 21,116 and the Hang Seng benchmark in Hong Kong finished 0.83 percent lower at 27,065. The Shanghai Composite finished 0.99 percent lower to 2,881, while in Singapore, the FTSE Straits Times index finished 0.32 percent lower to 3,210. Australian equities finished up 11 points or 0.2% to 6,554. Over the week, the index jumped 1.7%.

European session started lower today amid renewed worries about trade relations between the US and China and a rise in geopolitical tensions. DAX30 is giving up 0.88 percent to 12,062 CAC40 is 0.54 percent lower at 5,346 while the FTSE MIB in Milan is trading 0.32 percent lower at 20,634. The London Stock Exchange is 0.57 percent lower to 7,324 as the Brexit uncertainty continues.

gulf of oman

XAUUSD Hourly (H1)

In commodities markets, crude oil consolidates higher at 52.10 after reports that two tankers have been attacked in the Gulf of Oman. Oil is down almost 18% from the high in late April, wiping out about half of its rally earlier this year due to increased global trade worries. Brent oil also trades lower to $61,33 per barrel as major oil producers have yet to agree on adjustments on output. Gold shines and trades higher to 1,356 hitting fresh yearly high, following the recent developments in the Gulf of Oman. The precious metal broke above the 50 and 100-hour moving averages yesterday turning the short-term technical picture to bullish. Gold will find support at the 1300 round figure and then at 1295, the 100-day moving average while more bids will emerge at the 50-day moving average at 1287. On the upside, resistance stands at 1368, the high from April 2018.   

In cryptocurrencies market, bitcoin (BTCUSD) continues its trip north to the 8,200 mark. The daily low for BTC was at 8,168 and the daily high at 8,327. Immediate support for BTC stands now at the $8,000 round figure while the next support stands at 7411, the low from the recent trading range. On the upside, strong resistance now stands at 8,327, the high from Asian while I expect extra pressure from sellers at 8,500 and then at 8,700. Ethereum (ETHUSD) gives up four dollars to 254, with capitalization now to 27 billion, on the upside the immediate resistance stands at 287 the recent high while the support stands at 200 round figure, Litecoin (LTCUSD) consolidate retreats from yesterdays high at 128. The crypto market cap holds above $260.0B.

On the Lookout: Geopolitics are driving the markets today, International Energy Agency (IEA) Executive Director Faith Birol commented that recent attacks on tankers in the Gulf raised major concerns for global energy security and oil markets. In the UK, the first Conservative Party leadership contest revealed overwhelming support for Boris Johnson in his bid to become the next PM.

Later today, we await from North America the US retail sales, production and consumer sentiment data.

Trading Perspective: In fx markets, USD trades flat at 96.44 on speculation over Fed rate cut, while the Aussie dollar trades lower to 0.6899 as yesterday jobless rate remained steady at 5.2% in May. Kiwi also trades lower to 0.6545 level as downbeat manufacturing PMI figure flagged further RBNZ rate cuts.

GBPUSD is trading lower today breaking below the 1.27 as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2625 and the daily high at 1.2621. Major support now stands at 1.26 recent low. On the upside, immediate resistance now stands at 1.2753 the high from yesterday. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Sterling futures markets the open interest shrunk by around 6.7K contracts, reversing the previous build. In the same line, the volume went down by just 646 contracts.

EURUSD started the day lower visiting new low around 1.1251. On the upside, the immediate resistance stands at 1.1340 the high from yesterday, while more offers will emerge at 1.1367 the 200-day moving average. Support stands at 1.1219 the 50-day moving average, while more bids will emerge at 1.12 round figure.

oman

EURUSD Daily Chart

In euro futures markets, the open interest increased by 11.7K contracts on Thursday, volume, shrunk by around 307.2K contracts, the largest single-day drop so far this year.

USDJPY trades 0.15 percent lower to 108,21, today the pair hit the low at 108.15 for the second day in a row and the high at 108.39. The pair will find support at 107.84 recent low, on the upside immediate resistance for the pair now stands at 108.71 the high from yesterday. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to FED’s next move.

USDCAD makes an attempt higher and trading as of writing at 1.3337 as the retreat in crude oil prices, Canada’s main export item seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 200-day moving average around 1.3250 while extra support stands at the 1.3200 round figure. On the upside, immediate resistance stands at the 1.33 zone before an attempt to 1.3348 where the 100-day moving average stands.

Equities Mixed as Chinese Cues Dictate Directional Bias, US Futures Green on Rate Cut Hopes

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , , , ,

Summary: Global equity market is seeing mixed price action in the global market today. Lack of progress in Sino-U.S. trade talks, increasing awareness that trade deal between two parties is unlikely in the upcoming G20 summit and headlines on massive street protests act as factors which provide the market with bearish cues. This has resulted in investor sentiment remaining divided in the global market. Further, the reduction in 2019 global crude oil demand growth forecast by OPEC also hurt risk appetite. While trade tensions and crude oil woes influenced European market to open in red, the surge in telecom shares over Germany’s announcement of completing its 5G mobile spectrum auction helped market retain some level of positive activity in the market. However, fundamentals remain shaky at this point in time. Forex assets display a high level of bearish influence showing the impact of headlines on investor sentiment and risk appetite in Asian and European market so far today.

Precious Metals: Both gold and silver are trading positive in the global market today given divided investor sentiment and prevalent cautious tone over the trade war and crude oil woes. Reduction in crude oil demand growth forecast, news of the attack on gulf crude oil tankers also affected market price activity, favouring demand for safe-haven assets.

Crude Oil: The liquid gold declined to 5-month lows earlier today as news of OPEC’s reduction in crude oil demand growth forecast for the year ahead took the wind out of bulls. However, news of the attack on gulf tankers, crude oil shipments amid ongoing supply to demand scenario helped black gold regain positive price action in spot and futures markets.

AUD/USD: The pair fell sharply earlier in the day over disappointing Australian unemployment data resulting in bulls waging strong war for control of price action near the 0.69 handle. While the pair has managed to stabilize near the 0.69 handle in the late European session, dovish cues from China resulted in bulls losing the edge and pair trading with strong bearish bias in the global market.

On The Lookout: Geo-Political issues take the center stage of investors’ attention today. While Sino-U.S. trade war-related updates continue to garner more attention and have a high impact on the market, all eyes are now on UK political proceedings. Given the fact that China won’t budge regardless of USA’s threatening tactics, it has become increasingly clear to investors across the globe that this issue is going to go into the long term.

rate cut

UK political proceedings

Meanwhile, the top 10 PM contenders in the UK for the role of PM are facing the first secret MP ballot today and any candidate failing to secure a minimum of 17 MP votes in their favor will be ousted from the race. The main point here is that, regardless of who succeeds, UK seems to be on a path for hard Brexit once the PM candidate is decided and the possibility of such an outcome is a cause of great concern in the global market. Aside from geopolitical events, traders await macro data updates for short term profit opportunities.

Trading Perspective: The directional bias for price action in US Wall Street seems to remain in favor of market bulls for now. US stock and benchmark index futures trading in the international market gained positive momentum over energy share led gains post sharp surge in crude oil price. While news of the attack on crude tankers in the Middle East managed to outweigh market bears for now and influence from fed rate cut expectations provide some level of fundamental support. But any provocative remarks or comments from President Trump could still push market fundamentals in favor of bears later today. However, a lack of any such comments would suggest that bulls will retain control over price action.

EUR/USD:  The common currency has lost its upper hand against US Greenback despite the latter remaining weak on dovish fate rate decision expectations. As Sino-U.S. trade war woes hurt risk appetite in the market, lack of support from macro data updates amid mixed investor sentiment in the global market led to the pair trading in red while traders await US macro data for directional bias.

GBP/USD: The British Pound is facing sharp loss as the first round of vote on PM replacement decision in UK parliament takes place today. As traders await results of the first round of the election, increasing odds surrounding Brexit causes the pair to remain in bear’s territory. Traders now await UK headlines and US macro data updates for short term profit opportunities.

USD/CAD: The pair is trading in favor of Canadian Dollar as Crude oil price surged sharply in the global market. Price of crude oil went up by more than 4% despite OPEC’s reduction in demand growth forecast for the year ahead as supply woes increased on news of the attack on crude oil tankers in the Middle East. Further, weak USD on dovish fed rate decision bets also favor CAD bulls resulting in pair trading in red. Regardless of US trade data outcome later today, the pair is likely to trade in red across US market hours on positive crude oil price.

EURUSD breaks below 1.13, Bitcoin holds the 8,000 mark

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Asian indices finished lower for the second day in a row as trade worries resurface and Hong Kong protests regarding the China extradition bill weighs on traders sentiment. The Nikkei225 finished 0.46 percent lower to 21,032; the Hang Seng benchmark in Hong Kong, finished 0.05 percent lower at 27,294. The Shanghai Composite finished 0.04 percent higher to 2,910, while in Singapore, the FTSE Straits Times index finished 0.05 percent lower to 3,207. Australian equities saw a brief spike following the release of the May jobs report but soon fell back into its old pattern. At the end of the day, the ASX200 finished 1.3 points or 0.02% lower at 6542.4.

European session started higher today despite renewed worries about trade relations between the US and China and a rise in geopolitical tensions. DAX30 is adding 0.64 percent to 12,193, CAC40 is 0.32 percent higher at 5,391 while the FTSE MIB in Milan is trading 0.84 percent higher at 20,634. The London Stock Exchange is 0.37 percent higher to 7,394 as the Brexit uncertainty continues.

In commodities markets, crude oil jumps higher at 52.3 after reports that two tankers have been attacked in the Gulf of Oman. Oil is down almost 18% from the high in late April, wiping out about half of its rally earlier this year due to increased global trade worries. Brent oil also trades higher to $61,71 per barrel as major oil producers have yet to agree on adjustments on output. Gold also trades higher to 1,337, following the recent developments in the Gulf of Oman. The precious metal broke above the 50 and 100-hour moving averages yesterday turning the short term technical picture to bullish. Gold will find support at the 1300 round figure and then at 1295, the 100-day moving average, while more bids will emerge at the 50-day moving average at 1287. On the upside, resistance stands at 1344 the high from the previous week.   

8,000 mark

BTCUSD Hourly (H1) Chart

In cryptocurrencies market, bitcoin (BTCUSD) managed to break above the key 8,000 mark, the daily low for BTC was at 8,048, and the daily high at 8,177. Immediate support for BTC stands now at $8,000 round figure while next support stands at 7411, the low from the recent trading range. On the upside, strong resistance now stands at 8,261, the high from yesterday while I expect extra pressure from sellers at 8,500 and then at 8,700. Ethereum (ETHUSD) adds twelve dollars to 258, with capitalization now to 27.5 billion. On the upside, the immediate resistance stands at 287, the recent high while the support stands at 200 round figure. Litecoin (LTCUSD) consolidate around yesterdays high at 136. The crypto market cap holds above $262.0B.

On the Lookout:

Australia’s unemployment rate remained steady at 5.2% in May, contradicting the market expectation of a drop to 5.1%. The Aussie economy added 42,300 jobs in May, beating both the analyst’s expectation of 17.5K and the previous month’s print of 28.4K by a big margin.

The Swiss central bank (SNB) decides on monetary policy today at 09.30.

Trading Perspective: In fx markets, USD trades lower at 96.44 on speculation over Fed rate cut, while the Aussie dollar trades lower to 0.696 as jobless rate remained steady at 5.2% in May. Kiwi also trades lower to 0.6566 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD is trading lower today breaking below the 1.27 as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2661 and the daily high at 1.2700. Major support now stands at 1.26 recent low. On the upside, immediate resistance now stands at 1.2753, the high from yesterday. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion. So any uptick can match excess offers.

In Sterling futures markets, the open interest increased by 2.2K contracts to their open interest positions on Wednesday, while volume increased by almost 81K contracts.

EURUSD started the day lower breaking below 1.13 and has trapped in 10 pips trading range. On the upside, the immediate resistance stands at 1.1340 the high from yesterday, while more offers will emerge at 1.1367, the 200-day moving average. Support stands at 1.1271, the 100-day moving average, while more bids will emerge at 1.12 round figure.

In euro futures markets, the open interest rose by more than 24K contracts on Wednesday, while volume posted the biggest up move since March 7, increasing by around 265.4K contracts.

EURUSD Daily Chart

USDJPY trades 0.07 percent lower to 108,44, today the pair hit the low at 108.15 and the high at 108.53. The pair will find support at 107.84 recent low. On the upside, immediate resistance for the pair now stands at 108.71, the high from yesterday. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to FED next move.

In Yen futures markets, open interest shrunk by almost 3.3K contracts on Wednesday, while, volume rose for the second session in a row, this time by nearly 53.4K contracts.

USDCAD makes an attempt higher and trading as of writing at 1.3315 as the retreat in crude oil prices. Canada’s main export item seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 200-day moving average around 1.3250 while extra support stands at 1.3200 round figure. On the upside, immediate resistance stands at the 1.33 zone before an attempt to 1.3348 where the 100-day moving average stands.

Relief Rally Continues, Gold under Pressure  

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Asian indices continue higher for the second day as investor digesting the news that President Donald Trump suspended plans to impose tariffs on Mexico but the market’s going to remain sensitive to trade news flow for some time particularly as we head into the G20. The Nikkei225 finished 0.33 percent higher to 21,204 the Hang Seng benchmark in Hong Kong, finished 0.81 percent higher at 27,796. The Shanghai Composite finished 2.58 percent higher to 2,925, while in Singapore the FTSE Straits Times index finished 0.63 percent higher to 3,208. Australian equities climbing 86 points or 1.34% to 6530 as broad-based gains help lift the market.

European session started on positive foot today as the relief rally continues for the fifth trading day in a row as traders cheer the U.S. – Mexico deal. DAX30 is adding 1.22 percent to 12,193, CAC40 is 0.53 percent higher at 5,411 while the FTSE MIB in Milan is trading 0.59 percent higher at 20,606. The London Stock Exchange is 0,47 percent higher to 7,410 as the Brexit uncertainty continues.

XAUUSD Hourly (H1) Chart

In commodities markets crude oil retreats from recent high today and trades at 53.82. Oil is down almost 18% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil also trades lower to $62,70 per barrel as major oil producers have yet to agree on adjustments on output. Gold trades lower giving up 2 dollars to 1,324, as news from the US-Mexico front calms investors who are dumping safe-haven assets. The precious metal broke below the 50 and 100 hour moving averages turning the short term technical picture to bearish. Gold will find support at 1300 round figure and then at 1295 the 100-day moving average while more bids will emerge at the 50-day moving average at 1287 on the upside resistance stands at 1344 the high from the previous week.   

In cryptocurrencies market, bitcoin (BTCUSD) continues the consolidation below the 8,000, mark, the daily low for BTC was at 7,899 and the daily high at 8,047. Immediate support for BTC stands now at $7,411 the low from the previous week, on the upside strong resistance now stands at 8,000 round figure. Ethereum (ETHUSD) recovers yesterday losses and trades to 245, with capitalization now to 25 billion. On the upside, the immediate resistance stands at 287 the recent high while the support stands at 200 round figure, Litecoin (LTCUSD) is the outperformer today adding 10 dollars to 129. The crypto market cap holds above $173.0B.

On the Lookout: Olli Rehn is in the news saying that the ECB could strengthen forward guidance, cut interest rates, and relaunch QE if needed. The European Monetary Union Sentix Investor Confidence came in at -3.3, below expectations (2.9) in June.

In Australia macro news according to the NAB Business survey, business confidence levels for May were the highest since July 2018 in reaction to the re-election of the coalition government during the month.

Trading Perspective: In fx markets, USD trades flat at 96.65 on speculation over Fed rate cut, while the Aussie dollar trades lower to 0.6957 despite positive news from Chinese trade data. Kiwi also trades lower to 0.6593 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD is flat for one more day trading above and below the 1.27 mark as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2669 and the daily high at 1.2702. Major support now stands at 1.26 recent low. On the upside immediate resistance now stands at 1.2723 the high from yesterday. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Pound futures markets the open interest increased by 4.5K contracts on Monday, the volume went up by almost 67.8K contracts.

EURUSD started the day higher breaking above the yesterday high and is trading at 1.1325. On the upside, the immediate resistance stands at 1.1331 the high from Asian session, while more offers will emerge at 1.1367 the 200-day moving average. Support stands at 1.1273 the 100-day moving average, while more bids will emerge at 1.12 round figure. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.

In euro futures markets, the open interest increased by more than 25K contracts on Monday, volume, shrunk for the second day in a row, this time by around 28K contracts.

relief rally

EURUSD Daily Chart

USDJPY trades flat to 108,68, today the pair hit the low at 108.34 and the high at 108.66. The pair will find support at 107.84 recent low, on the upside immediate resistance for the pair now stands at 108.71 the high from the Asian session. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to FED next move.

In Yen futures markets, open interest shrunk by around 1.5K contracts, while volume rose by around 20.3K contracts.

USDCAD consolidates to recent low and trading as of writing at 1.3261 close to daily low as the rebound in crude oil prices, Canada’s main export item, seems to have added further strength in the Canadian Dollar (CAD). The pair will find immediate support at the 200-day moving average around 1.3250 while extra support stands at 1.3200 round figure. On the upside, immediate resistance stands at the 1.33 zone before an attempt to 1.3348 where the 100-day moving average stands.

European Equities Positive, Fed Policy Easing Hopes Underpin Market Bulls

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The global market is trading positive on prevalent risk appetite and dovish fed rate decision expectations. All eyes are on US macro data for short-term profit opportunities as the trading session comes to a close for the week.

Summary: Asian equities today traded positive as market bulls still receive positive influence from dovish fed rate decision expectations. However, liquidity was relatively low as the Chinese market was closed for the day. European equities recovered from the previous session’s loss induced by ECB forward guidance given prevalent risk appetite in the market. Further, positive influence from the sharp jump in French Pharmaceutical company Sanofi’s shares also helped strengthen risk appetite in the European market. European equities are currently on a path for best week in the last two months given positive price action so far. However, geopolitical woes continue to hinder the market from seeing a sharp upside move. Forex market continues to see positive price action as the trading session comes to close for the week given prevalent risk appetite in the market and weak USD.

Precious Metals: Precious metals continue to retain yesterday’s positive momentum amid healthy risk appetite owing to dovish fed rate decision expectations, which continue to weigh down USD in which they are denominated. Gold is now well on the path to rescale 2019 given strong foothold above the $1330 handle in the current market.

bulls

OPEC’s cut extension

Crude Oil: Crude oil price is trading positive today in the international market following positive influence gained from Saudi Arabia energy minister’s comment. Falih commented that OPEC is close to agreeing on an extension of supply cut agreement and they are focusing on ways to accommodate non-OPEC nations. This has helped both international crude oil benchmark gain positive strength.

AUD/USD: While weak USD continues to underpin AUD bulls, the pair is trading in red across Asian and European market hours today. The pair fell into bear’s territory owing to Sino-U.S. trade war tensions escalating in the global market. Traders now await macro data updates for short term profit opportunities as the trading session comes to close for the week.

On The Lookout: The main focus of traders in now on UK politics given PM Theresa May’s resignation and the ensuing power struggle for the successor of said role. Aside from the political power struggle in UK and Brexit woes, the focus is on the upcoming Fed rate decision for which most investors and analysts in the market currently hold dovish expectations. However, there is a chance that the Fed could turn different way similar to ECB given Powell’s comments from earlier this week which hinted at lacked necessary dovish strength and conviction to hint at rate cut possibility. Given Trump’s comments hinting at lack of progress in high-level talks so far, tariffs on Mexico are likely to come live on Monday unless officials manage to convince the US to take alternative action during the weekend. As the trading session comes to close for the week, traders await US macro data for profit opportunities.

Trading Perspective: US Wall Street is likely to see positive price action on prevalent risk appetite in the market. US stock and index futures trading in the international market ahead of Wall Street opening saw positive activity hinting at positive investor sentiment in the market. Forex market is likely to see major pairs retain current momentum on weak USD. Traders now await macro data updates for short term profit opportunities as the trading session comes to close for the week and are unlikely to place any major bets owing to prevalent geo-political scenario which hints at the continued escalation in the near future.

EUR/USD: The pair is trading positive in the global market as Euro gained strength following ECB’s forward guidance. Draghi commented that interest rate would remain constant till 2020 or might be longer, crushing dovish expectations in the market. Further, weak USD in the market also helped Euro bulls sustain positive momentum while traders wait for macro data updates for short term profit opportunities as the trading session comes to close for the week.

GBP/USD: The pair is trading positive amid prevalent risk appetite in the market. However, gains are capped owing to political uncertainty in the UK following PM May’s resignation and Brexit woes. Weak USD continues to be the main driving force behind the pair’s positive price action for now given pressure on USD over dovish rate decision expectations. Traders now await macro data updates for short term profit opportunities as the trading session comes to close for the week.

USD/CAD: The pair is trading well inside bear’s territory as USD lost all recent gains owing to sharp gains in crude oil price action. Crude oil price gained on news that OPEC is planning to extend supply cut agreement which combined with tensions in the Middle East influenced positive momentum. Further weak USD on dovish fed rate decision expectation also supported commodity-linked currency CAD gain positive momentum. Healthy risk appetite in the market also supports CAD’s positive price action for the rest of the day.

SEC Sues Mobile App for Unregistered $100m Token Sale, Kik Interactive Responds

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SEC KikThe Securities and Exchange Commission sued Kik Interactive, creator of the freeware instant messaging mobile app Kik Messenger, for conducting an illegal $100 million securities offering of digital tokens because it did not register their offer and sale as required by the U.S. securities laws.

The SEC alleges that Kik sought to pivot to a new type of business, which they financed through the sale of one trillion digital tokens, in order to counter the recent rough years as they would run out of money in 2017. Kik sold its “Kin” tokens to the public, and at a discounted price to wealthy purchasers, raising more than $55 million from U.S. investors. Kin tokens traded recently at about half of the value that public investors paid in the offering, according to the SEC.

Steven Peikin, Co-Director of the SEC’s Division of Enforcement, said:

“By selling $100 million in securities without registering the offers or sales, we allege that Kik deprived investors of information to which they were legally entitled, and prevented investors from making informed investment decisions. Companies do not face a binary choice between innovation and compliance with federal securities laws.”

Robert A. Cohen, Chief of the Enforcement Division’s Cyber Unit, commented:

“Kik told investors they could expect profits from its effort to create a digital ecosystem. Future profits based on the efforts of others is a hallmark of a securities offering that must comply with the federal securities laws.”

Kik Interactive Inc. responded to the SEC’s filing through Kik’s CEO, Ted Livingston:

“We have been expecting this for quite some time, and we welcome the opportunity to fight for the future of crypto in the United States. We hope this case will make it clear that the securities laws should not be applied to a currency used by millions of people in dozens of apps. Kin is being used by more people in more apps every day, and come trial, Kin may be the most widely used cryptocurrency in the world. While the SEC’s actions are a challenge to overcome, they won’t affect the use, transferability, and characterization of Kin, and we expect momentum in the Kin Ecosystem to only continue to grow.”

Eileen Lyon, Kik’s General Counsel, commented,

“For the reasons set forth in our Wells Submission, the SEC’s complaint against Kik is based on a flawed legal theory.  Among other things, the complaint assumes, incorrectly, that any discussion of a potential increase in value of an asset is the same as offering or promising profits solely from the efforts of another; that having aligned incentives is the same as creating a ‘common enterprise’; and that any contributions by a seller or promoter are necessarily the “essential” managerial or entrepreneurial efforts required to create an investment contract. These legal assumptions stretch the Howey test well beyond its definition, and we do not believe they will withstand judicial scrutiny.

“It is noteworthy that the November 2018 Wells Notice was addressed to both Kik and the Kin Foundation. However, after reading our Wells Submission, the SEC chose not to name the Kin Foundation or assert any claims based on Kin transactions occurring after Kik’s 2017 pre-sale and token distribution event. In our view, the SEC’s decision not to bring such claims acknowledges that the transactions currently taking place within the Kin Ecosystem do not fall under the federal securities laws.”

According to Kik, the SEC’s complaint against Kik is a highly selective and grossly misleading picture of the facts and circumstances surrounding the 2017 pre-sale and token distribution event.

Markets in a wait and see Stance before NFP Data

by Leave a Comment Filed Under: Market News - European Open Tagged: , , , , , , , , ,

Asian indices finished mixed today as investors are digesting the European Central Bank meeting and keeping an eye on the US-China trade tensions. The Nikkei225 finished 0.53 percent higher to 20,884; the Hang Seng benchmark in Hong Kong finished 0.26 percent higher at 26,965. The Shanghai Composite finished 1.17 percent lower to 2,827, while in Singapore, the FTSE Straits Times index finished 0.36 percent higher to 3,157.

Australian equities rose for a fourth straight session. Gains were widespread, with only the Consumer Discretionary sector finishing in the red. A last-minute rally helped the ASX200 (XJO) gain 60 points or 1% to 6,443. For the week, the index finished 0.7 percent higher.

European session started on positive foot today for the third day in a row as traders await the NFP figure later today. DAX30 is adding 0.48 percent to 12,011, CAC40 is 1.00 percent higher at 5,331 while the FTSE MIB in Milan is trading 0.54 percent higher at 20,290. The London Stock Exchange is 0.58 percent higher to 7,301 as President Trump tweeted that progress was being made “but not nearly enough” between USA and Mexico.

In commodities markets, crude oil managed to rebound from recent low and trades at 53.23. Oil is down almost 20% from the high in late April, wiping out about half of its rally earlier this year, due to increasing trade worries. Brent oil also trades higher to $62,50 per barrel as major oil producers have yet to agree on adjustments on output. Gold continues to attract investors as a safe-haven asset and consolidates around $1,330. The precious metal broke above all major daily moving averages this week, turning the technical picture to bullish. Gold will find support at the 1300 round figure and then at 1295 the 100-day moving average while more bids will emerge at the 50-day moving average at 1287. On the upside, resistance stands at 1344, the high from yesterday session.

BTCUSD Hourly (H1) Chart

In cryptocurrencies market, bitcoin (BTCUSD) continues higher for the second straight day. The daily low for BTC was at 7,670 and the daily high at 7,956. Immediate support for BTC stands now at $7,411, the session low from yesterday. On the upside, strong resistance now stands at the 8,000 round figure. Ethereum (ETHUSD) adds two dollars to 247 with capitalization to 26 billion. On the upside, the immediate resistance stands at 287, the recent high, while the support stands at 200 round figure. Litecoin (LTCUSD) also trades higher at 113. The crypto market cap holds above $173.0B.

On the Lookout: The ECB extended its forward guidance on keeping interest rates steady “at least through the first half of 2020” than previously “end of 2019”. Draghi stressed the downside risks to growth from rising trade war escalation and weakness in the European manufacturing sector. In Frankfurt, the Bundesbank slashed German 2019 GDP forecast to 0.6% vs. 1.6% previous. In Japan, the Leading Economic Index came in at 95.5, below expectations (96.1) in April and the Japan Overall Household Spending (YoY) came in below markets expectations (2.6%) in April: Actual (1.3%).

The markets are expecting the Fed to cut rates by 25 basis points in September this year, according to the Fed funds futures.

In the America economic calendar, we await the US non-farm payrolls, wholesale inventories, and consumer credit data. The NFP report is expected to show that 175,000 jobs added in May, down from 263,000 in April. The unemployment rate is expected to remain steady at 3.6%.
Trading Perspective: In fx markets, the US dollar trades flat on speculation over Fed rate cut after comments from the Federal Reserve on Monday raised expectations that the U.S. central bank is moving closer to a rate cut.

As of writing, Greenback is trading at 97.00, while the Aussie dollar trades lower to 0.6975 after the rate cut from the Reserve Bank of Australia. Kiwi trades flat to 0.6623 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD is indecisive today as it trades above and below the 1.27 mark as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2685 and the daily high at 1.2717. Major support now stands at 1.26 recent low. On the upside, immediate resistance now stands at 1.2723, the high from yesterday. Pound shows persistent weakness amid UK political uncertainty and also on the back of global risk aversion, so any uptick can match excess offers.

In Pound futures markets, the open interest shrunk for the fifth session in a row by around 2.6K contracts, volume extended the downtrend for another session, this time by around 10.7K contracts.

EURUSD started today flat as traders await the NFP data from the USA. The pair is trading at 1.1265, and an attempt to 1.13 looks possible. On the upside, the immediate resistance stands at 1.13, while more offers will emerge at 1.1375, the 200-day moving average. Support stands at 1.1210, the 50-day moving average, while more bids will emerge at the 1.12 round figure. We are following news from Italy as their budget deficit dispute with the European Commission continues, and the political turmoil in Austria and Greece.

In euro futures markets, the open interest increased by 1.2K contracts on Thursday, while volume rose by almost 13K contracts, the third build in a row.

USDJPY trades higher adding 30 pips to 108,48, today the pair hit the low at 108.31 and the high at 108.52. The pair will find support at 107.84 recent low, and on the upside, immediate resistance for the pair now stands at 108.52, the high from the Asian session. The USD price dynamics will continue to drive the pair’s momentum as traders focus shifts to Friday’s closely watched US monthly jobs report (NFP).

In Yen futures markets, open interest increased by nearly 1.5K contracts on Thursday, volume shrunk for the fourth consecutive session, this time by 49.2K contracts.

USDCAD facing strong selling pressure and trading as of writing at 1.3350 at the daily low amid USD weakness across the board and as the rebound in crude oil prices, Canada’s main export item, seems to have added further weakness in the Canadian Dollar (CAD). The pair will find immediate support at the 100-day moving average around 1.3345 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.35 zone before an attempt to 1.3517 where the 50-day moving average stands.

nfp data

USDCAD Daily Chart

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