Sino-U.S trade Archives - The Industry Spread

Positive Mood on Better China PMI figures

April 1, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Brexit, China PMI, ECB, EU Parliamentary elections, EUR-USD, FOMC, RBA, RBNZ, Sino-U.S trade, Theresa May, trading platform

Asian stocks finished strong as investors digest better China PMI figures and progress in trade negotiations between the US and China. In Japan, the Nikkei225 main index added 1,43 percent to 21,509, the Hang Seng benchmark in Hong Kong finished 1.69 percent higher at 29,541. The Shanghai Composite outperformed for one more day, finishing 2.58 percent higher at 3,170, and in Singapore, the FTSE Straits Times index gained 1.02 percent higher at 3,245. Australian equities also in positive performance. The ASX 200 closed up 36 points or 0.6% to 6217, marking the fifth consecutive day of gains.

In commodities markets, Light Crude Oil bulls are in full control today sending the price at daily high and trades at 60.70, while Brent oil also breaks higher at $68.45/barrel. The Energy Information Administration data released last week showed that domestic crude stocks rose by 2.8 million barrels per day during the week ended March 22, bringing the figure to 442.3 million barrels, which reportedly amounts to a 3% increase year-on-year. Gold started the week lower as traders dumped safe-haven assets and trades near three-week lows at $1288. XAUUSD technical picture has deteriorated, and now immediate support stands at 100-day moving average at $1277, which can accelerate the downward move down to new YTD lows at the 200-day moving average at $1247. Strong resistance now stands at the $1300 round figure.

UK lawmakers will once again vote on Brexit indicative proposals following last week’s rejection, as markets now price-in a softer Brexit heading into the April 12th Brexit deadline. A positive start for equities in early European session mirroring the improved sentiment in Asian markets as investors watching the developments surrounding Brexit. DAX30 gains 0.32 percent to 11,465, CAC40 is 0.58 percent higher at 5,327 while FTSE100 in London is 0.44 higher at 7,266 and the FTSE MIB in Milan is trading 0.31 percent higher at 21,110.

On the Lookout: In the Asian session macro news, the Australia RBA Commodity Index SDR (YoY) registered at 11% above expectations (10.8%) in March, the Japan Nikkei Manufacturing PMI above forecasts (48.9) in March: Actual (49.2).

In our calendar today, US retail sales, business inventories and construction spending data will be released, along with the ISM manufacturing survey.

In central bank announcements tomorrow, we expect the Reserve Bank of Australia (RBA) to keep the Official Cash Rate unchanged at a record low of 1.50% on Tuesday, April 2nd.

Key Upcoming Events

10/04/2019 ECB Interest Rate Decision

12/04/2019 UK leaves the European Union

18/04/2019 Dissolvement of current EU Parliament

Trading Perspective: In forex markets, AUDUSD is trading higher as risk on mood prevails and trades at 0.7131 Kiwi, also rebound from previous week heavy losses at 0.6822, after the Reserve Bank of New Zealand abandoned its long-standing neutral stance and turned dovish, saying that the next move in interest rates would likely be down. US dollar index is losing some pips and now is trading at 96.63 after being capped in the 96.80 region in the wake of the dovish FOMC event last week.

GBPUSD Hourly (H1) Chart

GBPUSD investors turn bearish for the first time in March as the pair broke below the 50-day moving average awaiting new votes related to Brexit from the Parliament. The pair today managed to rebound from the lows during the Asian session at 1.30 to 1.3068 giving bulls a breath above the 50-hour moving average. On the downside, major support will be found at 1.30 round figure while more protection can be found at a 200-day moving average around 1.2980. On the flip side, immediate resistance stands at 1.3088 the high from Asian session, and from there major resistance can be found at 1.3202 where the 50-hourly moving average stands and then at 1.3232 the cross point of 100 and 200-hourly moving averages while 1.3382 the yearly high will be met with strong supply.

In GBP futures markets, open interest rose for the third consecutive day on Friday, this time by just 167 contracts. Volume, in the same line, rose by around 51.3K contracts, reversing the previous drop.

EURUSD started the trading week with bids above the horizontal lower band of the short term trading range at 1.1236 and now looks to break above the 100-hour moving average at 1.1251 to establish short-term bullish momentum. Immediate support can be found at 1.1218 the low from early Asian session, while more buying interest will emerge at the 1.12 zone.

On the Euro 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 futures markets, traders added around 3.3K contracts on Friday from the previous day, while volume shrunk for the second session in a row, this time by more than 5K contracts.

EURUSD Hourly (H1) Chart

USDJPY gains momentum and trades at the daily high to the 111.13 zone having hit the low at 110.84. Major support for the pair stands at 110 round figure. Immediate resistance for the pair stands at the 111.19 zone where the 100-day moving average crosses, followed by 111.49 the 200-day moving average stands.

Open interest in JPY futures markets dropped by just 467 contracts on Friday from Thursday’s final 155,316 contracts. On the other hand, volume rose for yet another session, this time by 872 contracts.

Post-FOMC Bearish Pressure Surrounds US Dollar

March 22, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, BOE, Brexit extension, ECB, EU Parliamentary elections, FED, monetary policy, RBNZ monetary policy, Sino-U.S trade, trading platform

Asian stocks finished mixed on Friday after upbeat data from the US economy, latest optimism surrounding Brexit negotiations and doubts over the US-China trade deal.

In Japan the Nikkei225 main index added 0.09 percent to 21627, the Hang Seng benchmark in Hong Kong finished 0.25 percent lower at 28,989. The Shanghai Composite finished 0.01 percent higher at 3,101 and in Singapore, the FTSE Straits Times index gained 0.02 percent at 3,213. The Aussie stock market managed to make a solid gain today, capping off what’s been a week of choppy and lackluster trade. The ASX 200 rose 28 points or 0.5% to 6,195 – helped by gains in financial, energy, retail, healthcare, IT and utility stocks. The index gained 0.3% for the week.

In commodities markets, Light Crude Oil finally today broke below the $60 mark, and currently trading at 59.92, Brent oil also traded lower to $67.76/barrel as Venezuela and Iran impacting oil supply and cuts set to continue at the June meeting for OPEC. Oil has been steadily bid in recent days. OPEC has already helped oil prices rise by 30% this year as it moves to cut global supplies. Gold in a volatile session from the highs at $1320 went back to $1303 and managed to finish the Asian session at $1311. XAUUSD immediate resistance stands at yesterday high at $1321 while more offers will be found at 1330 zone. The precious metal may find support at $1302 where the 50-day moving average crosses and the low from yesterday, ahead of testing 100-day simple moving average down to $1271.

A negative start for equities in the early European session mirroring the sentiment seen in US equity futures, with investors digesting the FED forecasts and watching the developments surrounding Brexit. DAX30 is giving up 0.50 percent to 11,493, CAC40 underperforming, is 0.67 percent lower at 5,342 while FTSE100 in London is 0.58 lower at 7,310.

On the Lookout: Geopolitical worries resurface as US imposes the first new North Korea sanctions since the failed Hanoi summit, while North Korea demands the US to remove weapons from Guam and Hawaii. Yesterday the US Federal Reserve chairman Jay Powell, surprised by delivering a dramatic shift on monetary policy guidance, helping US stocks to fresh 5-month highs, and the European Union agreed to give May two weeks’ Brexit extension. The Bank of England kept its interest rates unchanged at 0.75%, and the vote was unanimous. The forward guidance was left untouched as well.

In central Bank announcements today, the speeches by the ECB Governing Council members De Guindos and Mersch will grab attention at 08:15GMT and 10:15GMT respectively. At 12:00GMT, the GBP traders will await the BOE quarterly economic bulletin.

In Americas macro calendar, we have the Canadian retail sales and CPI figures slated for release at 1230 GMT, followed by Markit flash manufacturing and services PMI readings due at 13:45GMT. At 14:00GMT, the US existing homes sales data will be published alongside the wholesale inventories report. Next of relevance remains the Baker Hughes US oil rigs count data that will be released at 17:00GMT, an hour ahead of the US monthly budget statement release. Next week, US economic growth and inflation measures are the key data releases of interest.

Interest rates Market expectations: For the Fed, markets don’t expect any further rate hike in 2019, down from two rate hikes previously, and now see only one hike in 2020. Traders keep pricing in the first ECB rate hike at some point in H2 2020.

Trading Perspective: In forex markets, AUDUSD consolidates around 0.71 after the spike above 71.65 US cents, following Greenback weakness on the dovish US Fed and an unexpected dip in the Aussie unemployment rate, which fell to 4.9% in February – the lowest level since June 2011. Australian dollar is now trading to 71.08, amid pressure over China anti-dumping duties and the US sanctions on North Korea, the Kiwi, managed to rebound from yesterday correction to 0.6895 on repositioning ahead of the RBNZ monetary policy decision next week. US dollar index is adding 20 pips at 95.72 as the Fed maintained interest rates at 2.25%-2.5% while adjusting their “dot plot” with a further rate hike in 2019 unlikely, down from two rate hikes previously, and only one hike in 2020.

GBPUSD managed to keep its recovery mode intact after the European Union agreed to give May two weeks’ Brexit extension. The short term technical picture has turned bearish for Sterling as the pair failed to materialize USD weakness and drop below the hourly moving averages. On the downside, major support will be found at 1.3057 where cross the 50-day moving average while more protection can be found at 200-day moving average around 1.2982. On the flip side, major resistance can be found at 1.3167 where the 50 hourly moving average stands and then at 1.3232 the cross point of 100 and 200-hourly moving averages while 1.3382 the yearly high will be met with strong supply.

In GBP futures markets the open interest rose by almost 4.4K contracts on Thursday from the previous day. The volume rose for the second session in a row, this time by more than 39K contracts.

EURUSD Daily Chart

EURUSD lost yesterday all the pips that gained after the FED decision and as of the time of writing the pair is trading 0.11 percent higher at 1.1387. Euro will find immediate resistance at the 200-day moving average at 1.1481 and is looking to break above in order to establish a new bullish trend targeting the yearly high at 1.1570. The low from yesterday session at 1.1342 provides solid support, and further protection can be met at the horizontal support line at 1.1236.

In Euro future markets, traders scaled back their open interest positions by nearly 7.9K contracts on Thursday from Wednesday’s final 493,906 contracts. On the other hand, volume increased by almost 26.5K contracts.

USDJPY rebounds from yesterday losses up to 110,80 as the pair tested the critical 50-day moving average at 110.31. The next major support for the pair stands at 110 round figure. Immediate resistance for the pair stands at 111 round mark followed by 111.28 where the 100-day moving average stands.

USDJPY Daily Chart

Chinese stocks rally as Trump postpones trade deal deadline

February 25, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Brexit, Brokers, Capital Markets, Chinese stocks, economy, financial services, FX trading, Sino-U.S trade, Theresa May, trading platform

Chinese stocks finished higher as Sino–US trade talk optimism boosts sentiments. The Shanghai Composite Index is set for the best day since June 2015 adding more than 5 percent to 2,961. In Tokyo, the Nikkei225 gained 0.5 percent to 21,528, and Hong Kong’s Hang Seng finished 0.4 percent higher at 28,959. The ASX 200 in Australia advanced 19 points or 0.31 percent to 6,263, supported by the headlines that the US and China are close to reaching a trade deal.

In commodity markets, crude oil is trading 0.19 percent lower, while gold is trading higher to $1328 per ounce and the U.S. dollar index is trading 0.05 percent lower at 96.44.

European indices started the week in a positive tone with DAX adding 0.47 percent to 11,511, the CAC40 rising 0.31 percent to 5,231 and FTSE100 in London gains 0.29 percent to 7,199.

On the Lookout: The Telegraph reported that the Brexit would be delayed for up to two months under plans being considered by Theresa May to extend Article 50. In macro news, the New Zealand retail sales surged 1.7% during Q4 2018 and the Japan Leading Economic Index came in at 97.5, below expectations (97.9) in December.

The economic calendar is also rather empty today in the US: the Chicago Federal Reserve national activity index is released with the Dallas Fed manufacturing index.

For the week, we expect the US housing starts and consumer confidence tomorrow; Eurozone confidence surveys, US trade and factory orders, and Canadian CPI on Wednesday along with the Fed’s Powell’s semi-annual testimony, which is the same day USTR Lighthizer also speaks; Thursday has China’s PMIs, German CPI, and US Q4 GDP and the Chicago PMI; Friday has another Powell speech, Eurozone CPI, and US personal income/spending and ISM surveys.

Trading Perspective: The USDCNH is trading at the lowest levels since July 2018 amid the trade talk optimism, Kiwi also benefiting from an upbeat New Zealand’s retail sales report and is trading at 0.6878 against USD. The Aussie dollar tested and broke above the 0.7150 barrier opening the way for 0.72.

EURUSD is trading sideways in early European session adding 0.12 percent to 1.1346; the pair still trades between the longer term trading range between 1.12 to 1.15 which sketched the last three months. Strong resistance stands at 1.1394 where two daily moving averages cross. On the downside, the pair will find protection at the 100-hour moving average in 1.1335 area. Open interest in EUR futures markets increased by nearly 8K contracts on Friday from Thursday’s final 528,323 contracts, recording the first build after three consecutive pullbacks. Volume, instead, prolonged the choppy performance and shrunk by almost 67.1K contracts.

EURUSD Hourly (H1) Chart

GBPUSD is moving with an eye in Brexit related headlines. The technical picture is neutral to positive with major resistance standing at the highs around 1. On the flipside, the 1.30 psychological mark is providing support where more buying interest will be met at the 1.2882 region where two hourly moving averages are crossing.

In GBP futures markets, investors added around 1.5K contracts to their open interest positions on Friday vs. Thursday’s final 194,637 contracts. On the other hand, volume dropped for the third session in a row, this time by nearly 27K contracts.

The USDJPY is trapped in a narrow trading range since mid-January with a slightly positive slope to the upside. A break above the 111 level will give bulls a boost to target the 200-day moving average at 111.30, while strong support for the pair stands at the 50-day moving average at 109.97.

In JPY futures markets, the open interest rose by just 185 contracts on Friday vs. Thursday’s final 185,068 contracts, recording the second build in a row. Volume, instead, remained erratic, this time declining by around 17.7K contracts.

USDJPY Daily Chart

Hopes on Trade Truce Extension Drives Markets

February 14, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian Markets, banks, Brokers, economy, EUR-USD, FX trading, Japan, monetary policy, Nikkei, Sino-U.S trade, trading platform

Traders are remaining hopeful of a trade truce extension between the US and China after US President Trump said he would let the deal deadline slide if both parties were making headway. Asian markets finished flat for the day, after posting decent gains over the last days. The Nikkei in Japan ended 0.02 percent lower to 21,139, the Hang Seng in Hong Kong lost 0.23 percent to 28,432, while the Shanghai Composite index was 0.05 percent lower at 2,719. The Aussie ASX200 index was up around 30 points at its best levels in the early part of the session to end the session flat, down 4 points to 6059 points. The Dow Jones Industrial Average finished the day 0.46 percent higher at 25,543.27, the S&P 500 added 0.3 percent to 2,753.03, and the Nasdaq 100 finished 0.02 percent higher at 7,015.88.

European equities started higher, DAX is adding 0.33 percent to 11,204, CAC40 is 0.61 percent higher, and London pushed 0.41 percent higher at 7,220, only MIB in Milan is trading 0.31 percent lower.

On the Lookout: Chinese President Xi Jinping is expected to meet key members of a US delegation in Beijing on Friday. Japan’s fourth quarter annualized GDP rose 1.4 percent.

Tonight, during the US headlines, we will be presented with the producer price data, released with retail sales, weekly jobless claims, and business inventories.

Apart from the data, speeches from the central bankers are scheduled, BOE board member Vlieghe speaks at 09:30 GMT and RBA Kent speaks at 20:30 GMT.

EURUSD Hourly (H1) Chart

Trading Perspective: EURUSD managed an impressive rebound in US session from yearly low, but sellers came back in the Asian session sending the pair back to 1.1250. The technical picture has deteriorated for euro and a break below the low from yesterday can drive prices down to 1.12 area. On the upside, only a break above 1.1344 can give bulls the upper hand. The macro news from Europe still disappoints, today it was the German Q4 GDP numbers which arrived at 0.0% q/q worst than analyst’s expectation of 0.1%.

EUR futures markets, open interest rose by just 490 contracts on Wednesday from Tuesday’s final 538,627 contracts. On the flip side, volume reverted two consecutive builds and dropped by around 18.5K contracts.

GBPUSD failed to hold above 1.29 and sellers took control sending the pair down to the monthly low around 1.2830 area targeting the key support at 1.28 while on the upside any meaningful up-move now seems to confront a strong resistance near the 1.2900 handle.

Open interest in GBP futures markets dropped by just 854 contracts on Wednesday vs. Tuesday’s final 194,998 contracts, as per the latest advanced figures from CME Group. Volume, instead, increased by around 36.2K contracts, extending the erratic activity so far this week.

GBPUSD Hourly (H1) Chart

USDJPY keeps trading in a positive tone above and below 111 level. Bulls are waiting for a break above 111.26 to enter new long positions.

In JPY futures, markets investors added around 1.9K contracts to their open interest positions on Wednesday from Tuesday’s final 185,725 contracts. Volume, instead, shrunk for the second session in a row, this time by almost 5.9K contracts.

Asian Stocks Higher amid Positive Reports Regarding the Trade Talks

February 13, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: banks, Brexit, Capital Markets, economy, EUR-USD, foreign exchange, FX trading, RBNZ, Sino-U.S trade, trading platform, US-China Trade Talks

Optimism emerges in US-China trade talks and traders throw bids in Asian markets with Tokyo’s main index adding 1.31 percent to 21,144 making to eight weeks high, the Hang Seng in Hong Kong rose 1.16 percent to 28,497 and Shanghai Composite index advanced 1.84 percent to 2,721. The Aussie ASX 200 index shed 0.3 percent to 6,063. US Dollar index trading flat at 96.73. The crude oil rose 50 cents to $53.60/barrel, and Brent oil gained 53 cents to $62.95/barrel. Gold is adding two dollars to $1312.65.

European stocks follow Asia higher with DAX rising 0.51 percent 11,181, CAC40 also trading 0.38 percent higher at 5,076 and in London the FTSE100 pushed 0.46 percent higher at 7,165.

On the Lookout: Riksbank will make its interest rate decision today and is widely expected to stay on hold with unchanged future guidance. Bank of Japan (BoJ) Governor Haruhiko Kuroda reiterated that inflation is slowly moving towards 2% price target.

In Australia, Consumer confidence rose by 4.3 percent in February, its biggest lift in 33 months to 103.8 (a read above 100.0 indicates optimists outnumber pessimists). Despite the lift in sentiment, confidence hit a 16-month low in January.

The International Energy Agency (IEA), in its monthly oil market report, maintained 2019 global oil demand growth forecast of 1.4 million bpd vs. 1.3 million bpd in 2018 saying that the political crisis in Venezuela risks disrupting the global crude market.

In the US trading session, the US January inflation report will headline, with the focus on the core figures amid weaker energy prices. The headline CPI figure is likely to ease to 1.5% y/y vs. 1.9% previous while the core rates are seen lower at 2.1% vs. 2.2% last.

Trading Perspective: In forex markets, Kiwi was the big mover after the Reserve Bank of New Zealand (RBNZ) monetary policy statement, and Governor Orr’s comments sent the NZDUSD more than 100 pips higher to highest levels in six days at 0.6838. The Aussie dollar also rallied to weekly tops near 0.7125. GBPUSD is trading lower today and broke below the 1.29 level. The pair will test the support at 1.2875 at the 50-hour moving average.

EURUSD Daily Chart

EURUSD made an impressive comeback yesterday jumping 0.43 percent, above 1.13 after in US session hit YTD low at 1.1257. Immediate resistance can be found at the 50-day moving average at 1.1391 while more supply will emerge at the 1.1420 region.

Scotiabank currency analysts think that the short-term technical for EURUSD is on the bearish side and traders should trade the currency pair with caution for the time being. They believe that “Momentum indicators are bearish and the DMI’s are confirming. The Euro appears to have broken the ascending channel from November, and near-term support appears limited ahead of the November low around 1.1220. We are somewhat cautious, however, given that EUR continues to trade within the range and given that it has shown a remarkable ability to rally from the mid/upper-1.12s in several instances over the past few months.”

USDJPY is trading close to yearly highs advancing 0.18 percent to 110.68 with bullish bias still intact and with traders eyeing the 111 barrier. Traders continue to dump Japanese Yen on risk on mood after positive news from the trade talks frontier. The round figure at 111 is the immediate resistance, while a break above can lead price to 200-day moving average at 111.30. On the downside, support can be met at the low from yesterday at 110.34 while more solid support can be found at the weekly low around 109.43 area.

USDJPY Daily Chart

GBP Falls Post BOE Update, Equities Decline on Risk Averse Trading Activity

February 7, 2019 by Karthik Subramanian Leave a Comment Filed Under: Market News - US Open Tagged: banks, Brexit, ECB, economy, European market, FOMC, Irish Backstop agreement, monetary policy, Sino-U.S trade, Theresa May

Global equity market traded in red as concerns of a Sino-U.S. trade war, a no-deal Brexit, a slowdown in Euro area economic activity and the possibility of another shutdown of U.S. government weighed down investor sentiment.

Summary: Equity and Forex instruments across the globe fell into bear’s territory on increased risk-averse trading activity. While market saw increased trading activity as most major Asian markets resumed business post-holiday celebrations, investor sentiment tanked as more investors grew wary of geopolitical events. Following the U.S. President Trump’s state of union speech, tensions peaked in the market over concerns on the outcome of Sino-U.S. trade talks and the possibility of another government shutdown in the U.S. Bearish pressure further increased in late Asian/early European market hours as investors took a cautious stance while waiting for updates on talks between E.U. officials and the UK Prime Minister Theresa May which will give a better picture on the direction in which Brexit is going to move ahead. Weak German macro data and European commission’s reduction of Italy’s growth forecast also weighed down investor sentiment, resulting in sharp declines of major assets in both equity and forex market space.

XAUUSD: Gold is seen trading positive in European market hours despite a sharp decline during Pacific-Asian market hours. Gold traded in global market is denominated with US Greenback. Strong US Dollar normally discourages participation from investors across the globe owing to a higher exchange rate. However, given a steady string of bearish headlines which hit the market, safe-haven demand limited Gold’s decline well above $1300 handle. Further increased risk-averse trading in European market helped Gold erase early losses and trade positive.

USDJPY: Strong US Greenback in the broad market caused the pair to test $110 handle early in the day. However, given the risk-averse trading activity in the broad market and cautious investor sentiment, safe-haven assets began to see increased demand, and this helped the Japanese yen – a popular safe-haven currency – erase early gains and gain the upper hand during European market hours. The pair is trading at $109.83 as of writing this article, and given cautious investor sentiment in the market, it is highly likely to fall below $109.70 handle before the trading session closes for the day.

AUDUSD: Following its sharp decline during yesterday’s market hours on comments from RBA Governor Lowe who hinted at the possibility of rate cuts, the pair is trading in a range-bound pattern. The pair hit two-week lows earlier in the day having declined below 0.7100 handle as disappointing NAB quarterly business survey data further added to bearish pressure on Australian Dollar. The pair now needs to recover above 0.7130 handle for AUD bulls to regain control over price action.

On the Lookout: Most high impact macro data outcome which investors were keen on has already hit the market. Moving forward, investors main focus is on UK PM May’s visit to the EU for negotiating chances to the Irish Backstop agreement in current Brexit deal. The EU stands firm on its stance that backstop agreement will not be removed, but PM May hopes to negotiate some level of changes to the agreement made in November 2018 in hopes of getting the deal approved in parliament or leave without any trade deal as previously announced, on March 29, 2019. On the release front, the day ahead will see the release of Initial Jobless Claims data from the U.S. followed shortly by a speech from FOMC member Clarida.

Trading Perspective: While risk-averse trading sentiment remains high in the market amid worries of another government shutdown in America, USD has managed to retain its strength supported by rebound in bond yields and aims to reach further heights in the forex market. Equity markets are expected to see sideways action over cautious investors amid political woes.

EURUSD: The pair continued to extend decline through European market hours as risk-averse trading added to US dollar’s strength in the broad market and dovish closing today will make it the sixth consecutive session of gains for Greenback. EU’s reduction of Italy’s growth forecast and disappointing Euro area macro data are major factors that led to concerns of an economic slowdown in the EZ area resulting in sharp declines. At the current rate of decline, EURUSD pair is likely to fall test 1.1300 by today’s American market hours, and fall below said level before the trading session closes for the week.

GBPUSD: Brexit remains the main driving force for British Pound and US Dollar has managed to gain the upper hand recently. Despite investors caution and reluctance to place major bets as they wait for updates from PM May’s visit to E.U. GBP saw a sharp decline as the BOE left interest rate unchanged but projected lower growth and inflation forecasts in Quarterly Inflation Report increasing bearish pressure on GBP resulting in pair falling below mid 1.28 handle. Moving forward, If headlines hinted at Brexit proceeding heading towards no-deal scenario, the pair is likely to suffer further declines as low as 1.2800 handle.

USD/CAD: The pair saw steady upward price action on strong US Greenback in the broad market. Dollar bulls are supported by risk-averse sentiment in the broad market and dovish price action in Crude oil market. However, gains were capped near mid 1.32 handle as Crude oil price managed to recover from intra-day lows as focus shifts back to supply disruption and glut scenario in the market. News that U.S. sanctions on Venezuelan Crude oil is having an impact on the price of crude oil added some strength to Loonie bulls curbing US Dollar’s positive price rally.

Nikkei Closes Lower, NZDUSD Plummets to 0.6745

February 7, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Brexit, Capital Markets, EUR-USD, FED, financial services, monetary policy, Nikkei 225, RBNZ, Sino-U.S trade, trading platform

Japanese main stock index Nikkei 225 finished 0.59 percent lower at 20,751 on concerns over the Sino-US trade war while South Korea’s Kospi rose 0.3 percent to 2,209.76 and New Zealand’s NZX index finished 0.8 percent higher. Aussie stocks have extended its winning streak to four days, hitting fresh four-month highs with the ASX 200 adding 1.1 per cent to 6,026 thanks to gains across all sectors. NZDUSD took a hit on the chin after a weaker-than-expected New Zealand labor market data raised the odds of an RBNZ rate cut. The US Dollar index has now risen for the fifth straight session to reach 96.46, recovering almost all the losses suffered after the Federal Reserve dovish stance for more rate hikes. Brent oil futures lost 23 cents to $62.46, and U.S. crude lost 19 cents to $53.82 a barrel.

May had arrived at the European Council meeting hoping to win changes on the contentious backstop, designed to stop a hard border with Ireland in the event of no free trade deal with the EU, and bring back a deal she could get through parliament. FTSE in London started 0.10 percent lower to 7,173, DAX gives up 0.58% to 11,259 while CAC40 is also trading lower to 5,064.

On the Lookout: During the Asian trading session, it was reported that New Zealand’s unemployment rate rose to 4.3% in the last quarter of 2018, following an upwardly revised 4.0% in September and 4.4% in June. The reading sent the Kiwi down to 0.6745. The Reserve Bank of India unexpectedly cuts Repo rate by 25bps to 6.25%, sending Rupee higher.

Tonight, the big name on the agenda is the Bank of England (at 12:00 GMT) monthly decision on interest rates but it should be more of a non-event still as we don’t expect any changes on the interest rates policy. At 12:30 GMT, the Governor Mark Carney’s press conference will also grab attention for fresh hints on the UK’s inflation and growth outlook.

In US session calendar, traders are waiting for the weekly jobless claims and consumer credit change due at 13:30 GMT and 20:00 GMT respectively.

Trading Perspective: Greenback is trading higher across the board in Asian session amid fresh concerns over the US-China trade talks, Kiwi is the worst performer and Aussie remained on the offers and broke below the 0.7100 level amid RBA’s neutral switch and weaker fundamentals. The Canadian dollar also attracted fresh selling vs. USD, as the overnight oil-price recovery lost legs amid oversupply concerns.

EURUSD Daily Chart

EURUSD hits a 2-week low in the wake of a dismal reading on German industrial output. Euro now is looking very heavy as it broke below the key support 50-day moving average at 1.1382 and could slide further towards the support at 1.13 area on fading prospects of the ECB rate hike, next major support will be at yearly low at 1.1285. On the upside, the 1.1382 now has turned resistance while more supply will be met at the high from yesterday at 1.1415.

In Euro futures markets, investors added around 2.1K contracts to their open interest positions on Wednesday from Tuesday’s final 523,868 contracts. It was the second build in a row. Volume, instead, shrunk by more than 10.6K contracts, partially reverting the previous build.

GBPUSD is trading to two weeks low around 1.29 with traders eyes on the Bank of England “Super Thursday” scheduled at 12:00 GMT with analysts expecting a unanimous on-hold vote on rates. The pair is holding the key 1.29 handle for now, but the USD strength and Brexit uncertainty can force the price down to 1.28. On the upside, bulls will chase the 1.3026 figure to reverse the current bearish move.

Open interest in GBP futures markets rose by just 480 contracts on Wednesday vs. Tuesday’s final 196,616 contracts, as per advanced figures from CME Group. On the other hand, volume decreased by around 16.9K contracts.

USDJPY failed to benefit from a broadly firmer greenback and trading soft just below the 110 handle, a figure that rejected the pair twice the last trading days, if the pair manages to break above might accelerate the rally further towards $110.63 supply zone. On the flipside, support will be met at the 50 hour M.A. around 109.78.

JPY futures markets noted open interest increased by the second session in a row, this time by 201 contracts on Wednesday from Tuesday’s final 192,789 contracts. In the same line, volume rose by around 17.7K contracts after five consecutive drops.

USDJPY Hourly (H1) Chart

Gold prices are also trading lower today as USD continues to gain altitude and neared the 1300 psychological support, a level which if breached will cancel the bullish momentum that holds well for the last two months. A visit back to 1312 will give the bulls the upper hand.

RBA sends Aussie Dollar Lower, Greenback gains

February 6, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: banks, Brexit, Brokers, Capital Markets, economy, financial services, monetary policy, RBA, regulators, Sino-U.S trade, trading platform

Indices closed higher in Asia following a late rally in Nasdaq as investors continue to wait on further developments in trade talks between China and US. In Tokyo, the Nikkei 225 edged 0.14 percent higher on Wednesday, and the Australian stocks continued to climb higher, to end a third straight session in positive territory. Australian main index ASX200 climbed 20 points or 0.3 percent to 6,026. It has been thin trading across the Asian region for the session with several markets closed for the ongoing Lunar New Year holiday. In commodities markets, gold is trading in a narrow trading range at $1313 while silver spot prices are hovering at 15.83. Crude oil gains 7 cents to $53.79, and Brent oil is also up 7 cents at $62.05. Greenback index is gaining momentum and is trading 0.12 percent higher at 96.19.

European markets entering the session in red after disappointing Germany factory orders with DAX losing 0.45 percent to 11,318 the CAC40 is down 0.37 percent lower to 5,064 and London is also trading lower at 7,152.

On the Lookout: Germany’s new industrial orders dropped by 1.6% month-on-month in December, from 0.2% MoM in November. Also, Germany industrial orders were down by 7.0% year-on-year. The drop was mainly driven by falling demand from non-eurozone countries and a small drop in local demand.

The Royal Bank of Australia governor Philip Lowe said that the central bank is moving away from rate hikes as he mentions that the ‘interest rate outlook is now more evenly balanced’, sending AUDUSD down 1.48 percent.

US session sees a string of economic releases from the US, including the trade balance, unit labor costs Q4 and good trade balance, all which will be released at 13:30 GMT. The Canadian building permits will drop in alongside the speech by the BOC member Lane, Canadian Ivey PMI for January at 15:00 GMT. The US government crude stocks data will be released at 15:30 GMT.

AUDUSD Hourly (H1) Chart

Trading Perspective: The Australian dollar has fallen sharply following governor Philip Lowe’s speech revealing a switch to neutral rate outlook. The AUD slumped over 1 cent to 71.30 against USD. As of writing AUDUSD is trading 1.42 percent lower to 0.7132 canceling the bullish move from yesterday. The pair crushed the support levels instantly after trading stops were being triggered, and now is looking for support at the upper line of the descending channel at 0.71. Bulls now need to break above 0.7194 in order to gain some momentum and a chance to reach 0.7265 high from yesterday.

GBPUSD tried to stabilize around 1.2950 after yesterday’s 200 pips steep selloff as Theresa May will travel to Brussels to meet EU officials and announce a renegotiation of her Brexit deal on Thursday. The RSI has reached an oversold level, and a rebound can’t be ruled out, but now the bulls are on the sidelines. The pair needs to break above the 200-hour moving average to attract some solid buying. A strong resistance will be met at 1.3050 area where the 100-hour and 200-day moving averages are crossing. On the flipside, immediate support can be found at the 100-day MA around 1.2903 while a break below can force prices down to 1.28.

GBP futures markets noted open interest shrunk by almost 4.5K contracts on Tuesday vs. Monday’s final 201,122 contracts. On the other hand, volume rose by 14.3K contracts for the first time after four consecutive drops.

GBPUSD Daily Chart

EURUSD followed GBP lower after three-day consolidation at 1.1430 level. In the absence of negative news from the US government shutdown and US-China trade talks, the dismal macro figures from Eurozone pressures the common currency. Traders will closely watch the 1.1388 area which if failed to support the pair bears will send the price down to 1.13 at the yearly lows. On the upside, 1.1422 will act as resistance, and then more supply can be found at 1.1451 the 100-day moving average.

In Euro futures markets from CME Group, investors added nearly 1.9K contracts to their open interest positions on Tuesday from Monday’s final 522,906 contracts. In the same line, volume rose for the first time after two consecutive sessions, this time by almost 36.5K contracts.

EURUSD Corrects Lower, US – Sino Trade Talks Ended with no Deal

February 1, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: brokerage, Capital Markets, economy, EUR-USD, foreign exchange, FX trading, monetary policy, Sino-U.S trade, trade talks, trading platform, Trump, Xi Jinping

Trade talks in Washington between the two biggest economies ended without a deal. Trump has insisted that if a satisfactory deal is not reached, the tariffs will be imposed at the deadline. The China Caixin Manufacturing PMI came in at 48.3 below analyst’s forecasts (49.5) in January. The reading was the lowest since early 2016. The Shanghai Composite index outperformed the Asian peers reporting 1.30 percent gains at 2,618. In Tokyo Nikkei 225 ended 0.07 percent higher at 20,788 while Hong Kong’s Hang Seng index lost 0.13% to 27,908. Aussie stocks finished 2 points lower at 5862.

Yields on two-year Treasuries were down 15 basis points on the week, which if remains would be the largest weekly decline since mid-2010. Crude oil lost 44 cents to settle at $53.79 per barrel as did the Brent oil, which dropped 70 cents to $60.84/per barrel.

On the Lookout: US President Trump said on Thursday that he would meet with Chinese President Xi Jinping soon to seal a deal on trade — speaking at the White House during a meeting with Chinese vice premier Liu He following two days of trade talks between US and Chinese delegates. On the economic calendar, the UK manufacturing PMI update will be released at 9.30am (UK time), and 53.5 is the consensus estimate. Later, more manufacturing PMI data from across Europe and from the U.S. will make headlines. In the US, Nonfarm payrolls will be the key event released at 1330 GMT, while we expect a bunch of companies to report such as Exxon Mobil Corp. and Chevron Corp, Honeywell Inc. and drugmaker Merck & Co.

Trading Perspective: In forex markets today the US Dollar index is 0.02 percent higher at 95.57, the Kiwi is trading lower against USD down to 0.69 while Euro is adding 0.11 percent to 0.8741 against the pound and 0.01 percent against the Swiss Franc.

EURUSD was under selling pressure during the Asian session after the pair rejected at 1.15. Now bulls are waiting at the 100-day moving average at 1.1450 area which if breached will drive prices down to 1.1415 the low from yesterday.

EURUSD Daily Chart

In EUR futures markets open interest rose for the second session in a row on Thursday, this time by around 2.9K contracts from Wednesday’s final 528,527 contracts. In the same line, the volume went up by nearly 13.4K contracts, recording the third daily advance in a row.

AUDUSD is trading 0.36 percent lower to 0.7249 after weaker Chinese data. The pair will face resistance at 0.7296 yesterday high while support stands at 0.7228 and then at 0.7185 the weekly low.

GBPUSD is trading slightly lower at 1.3107 as traders await the UK manufacturing PMI data and the US payrolls for further clues. Traders trimmed their open interest positions by almost 4.4K contracts on Thursday from Wednesday’s final 202,157 contracts, according to preliminary readings from CME Group. Volume followed suit, down by around 2.8K contracts.

XAUUSD is down 0.13 percent to $1318,25 after touched yesterday the 9-month highs. The correction is supported by greenback strength and bulls are looking for the support at 1312 which if breached will accelerate the fall down to $1300 psychological mark.

XAUUSD Daily Chart

Gold Rallies, Asian Stocks Mixed

January 30, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: banks, Brexit, Capital Markets, ECB, economy, EUR-USD, FED, monetary policy, Sino-U.S trade, trading platform

Federal Open Market Committee meeting is on focus today. Although traders expect the Fed to leave its short-term interest rate unchanged, the comments at the press conference by Chairman Jerome Powell will be closely watched. Far East markets finished mixed, Nikkei225 index in Tokyo shed 0.52 percent to 20,556, Shanghai Composite lost 0.72 percent to 2,575 while Hong Kong’s Hang Seng index gained 0.01% to 27,524. Australian stocks opened with a pop after a strong start from miners, just to finish 5 points higher to 5,877.

Crude oil rose 15 cents to $53.46/barrel while Brent added 21 cents to $61.42/barrel. Gold is making 8-month high at $1314. The 10-year treasury yield is flatlined at 2.717 percent, having dropped close to three basis points. The USDollar index is trading flat at 95.81.

On the Lookout: The FOMC rate decision is scheduled at 19:00 GMT. The central bank is widely expected to keep rates unchanged, and markets are likely to take cues from Chairman Jerome Powell’s press conference. Early morning Japan Consumer Confidence Index came in at 41.9, below expectations (42.5) in November. At 9:30 GMT we have the UK December mortgage approvals, consumer credit data, and at 10:00 GMT we have both the Eurozone January final consumer confidence, and the Eurozone January economic, business, industrial confidence.

The earnings calendar today includes McDonald’s Corp., Boeing Co, AT&T Inc. will report during European market hours, with numbers after the N.Y. close from Microsoft Corp., Qualcomm Inc., Tesla Inc., and Facebook.

Trading Perspective: In forex markets, USDJPY is trading flat at 109.35 and Aussie dollar is the outperformer as headline inflation figures came in slightly better than expected, adding 0.63 percent to 0.7201. USDCAD gives up 0.11% to 1.3254 while US Dollar gains 0.20 percent against Swiss Franc to 0.9961.

EURUSD Daily Chart

EURUSD bulls stopped at the 100-day average at 1.1450. The pair is trading 0.02% higher at 1.1336 in neutral mode. FOMC meeting later during US session and US-China trade negotiations which begins today are going to be the key economic events in forex for the day. The key support area is at 1.1290 the yearly low, and immediate support stands at 1.1411 yesterday’s low. On the upside, only a convincing break above 1.1450 can attract more buyers targeting 1.15.

In EUR futures markets, open interest shrunk for the second consecutive session on Tuesday, this time by around 2.5K contracts. Volume, instead, rose by nearly 11K contracts after two consecutive drops.

GBPUSD took a hit on the chin yesterday giving up 150 pips after failure to break above 1.32, as the UK Parliament rejected one of the most relevant amendment votes, the Cooper´s amendment got defeated by 298 to 321. PM May wants to renegotiate the backstop with the European Union, but Chancellor Merkel and the EU have already expressed their unwillingness to renegotiate the backstop agreement. The weekly high at 1.3214 is strong resistance while on the downside 1.3051 is the immediate support. All in all the pair remains vulnerable to Brexit news and traders have to be cautious entering any position.

Advanced figures for GBP futures markets noted investors trimmed their open interest positions by nearly 2.5K contracts on Tuesday vs. Monday’s final 209,156 contracts. On the other hand, volume increased sharply by almost 87K contracts.

XAUUSD is the talk of the town as the bulls keeps breaking higher making every day higher high. Currently, gold is making new 8-month high at 1315 — a level we haven’t seen since May 2018. Supply zone stands at 1350 the high from May 2018 while on the downside, yesterday’s low at 1302 will act as support and then 1275 is the key support figure at the weekly low.

XAUUSD Daily Chart

Positive Mood on Better China PMI figures

Post-FOMC Bearish Pressure Surrounds US Dollar

Chinese stocks rally as Trump postpones trade deal deadline

Hopes on Trade Truce Extension Drives Markets

Asian Stocks Higher amid Positive Reports Regarding the Trade Talks

GBP Falls Post BOE Update, Equities Decline on Risk Averse Trading Activity

Nikkei Closes Lower, NZDUSD Plummets to 0.6745

RBA sends Aussie Dollar Lower, Greenback gains

EURUSD Corrects Lower, US – Sino Trade Talks Ended with no Deal

Gold Rallies, Asian Stocks Mixed

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