US-China Trade Talks Archives - The Industry Spread

Dollar Eases After US Retail Sales Slumps to Worst in Nine Years

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

Summary: US December Retail Sales plunged to their worst fall in nine years, suggesting slower economic growth at the end of 2018. The benchmark US-Ten Year bond yield slumped 5 basis points to 2.66% (2.71%). The Dollar Index (USD/DXY), a measure of the Dollar’s value relative to a basket of foreign currencies slipped 0.22% to 96.986 from 97.12 yesterday. US Weekly Unemployment Claims rose to 239,000 against an expected 225,000 rise. Earlier a fall in Germany’s Q4 GDP to 0.00% against a forecast gain of 0.1% saw the Euro drop to a three-month low at 1.12492. EUR/USD rallied to close at 1.1295 on an overall weaker US Dollar. Sterling slumped 0.47% to 1.2802 (1.2855) after UK lawmakers rejected PM May’s plan to seek changed for her Brexit deal. While optimism remained on US-China trade talks, a South China Morning Post article reported that both countries remained far apart on a key US demand. The crucial demand is meant to ensure that Beijing honours any commitment to intellectual property protection and equal market access.

Trading View – US 10-Year Bond Yield Chart – 15 February 2019

USD/DXY – The Dollar Index slipped 0.22% to 96.986 after trading to a two-month high of 97.28 yesterday. The strong resistance at 97.30 held and will likely reject any attempts to move higher. The weaker-than-expected fall in US retail sales, the worst in nine years, and a rise in Jobless Claims will prevent any significant Dollar gains for now.
EUR/USD – Despite dismal Q4 German GDP growth, the Single currency rallied to 1.1295 from 1.1270 yesterday on the weaker US Dollar. Germany’s 10-year Bund yield slipped 2 basis points to 0.10% in contrast to the 5-basis point fall in its US 10-year counterpart.
USD/JPY- The Dollar fell back 0.37% to 110.53 after advancing to 111.129, over 6-week highs. Weaker US economic data and reduced optimism on the US-China trade talks will cap the Dollar today.

On the Lookout: The financial turmoil and government shutdown at the end of 2018 has taken its toll on the US economy. The steep drop in overall retail sales follows other data pointing to slower growth. However, this is offset by a healthy job market and steady wage gains. This latest data may reinforce some of the market’s view that the Federal Reserve will hold off on raising interest rates this year. The Dollar’s strength may fade from here should US-China trade talks extend unnecessarily and the optimism is stretched.
Economic data today include China’s CPI and PPI for January, as well as a raft of US reports. The UK releases its January Retail Sales while the Euro-Zone reports on its Trade Balance. US data are: Empire State Manufacturing Index, US Capacity Utilisation Rate, and US Preliminary University of Michigan Consumer Sentiment.

Trading Perspective: Up until the release of US Retail Sales the Dollar had been looking good. The much weaker than expected data shows that there is less in the US economy than many had thought. Consumer spending accounts for about 70% of the economy. Expect the recent overall US Dollar strength to wane, culminating in a lower USD/DXY.

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

EUR/USD – The focus has been much on the slowdown in the Euro-area economies following recent weak data. However, the spotlight now falls on the US which should enable the Euro to recover off its lows. EUR/USD has immediate support today at 1.1260-70, which is an important pivot point. Immediate resistance can be found at 1.1310/20 and then 1.1350. Expect the 1.1270 level to hold and a likely grind to 1.1320 to follow. Prefer to buy dips on the Single currency.
USD/JPY – The Dollar has seen a strong rise to 111.129 overnight and over 6 week-high yesterday lifted by a risk-on stance on the optimistic US-China trade talks. The fall in US retail sales took the sting out of the Dollar and we may now see a pullback. USD/JPY has immediate support at 110.40, this morning’s low followed by 110.00. We can find initial resistance at 110.70 and 111.10. Look for a drift lower with a likely range of 110.10-110.70. Prefer to sell rallies.
AUD/USD – The Aussie saw modest gains to 0.7105, up 0.14% after trading to an overnight high of 0.71315. Immediate resistance today lies at 0.7125/30. Immediate support can be found at 0.7070 (overnight low of 0.70722). Australian 10-year bond yields were down to 2.14% from 2.15%. Given the 5-basis point fall in the US 10-year yield, expect the Aussie to grind higher against its US counterpart. Likely range today 0.7090-0.7140. Prefer to buy dips.

Great to be back, happy Friday and trading to all.

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

Stock Markets Higher on Positive Sentiment

February 4, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Brokers, Capital Markets, economy, EUR-USD, FED, interest rate, investment, monetary policy, US-China Trade Talks

Positive news from US-China trade talks during the weekend pushed Asian stocks higher. In Tokyo, Japan’s Nikkei 225 index finished 0.3% higher at 20,883 the Hong Kong’s Hang Seng index added 0.21% percent higher at 27,990. The Shanghai Composite edged 1.30 percent higher at 2,618 and Australian stocks finished at 5,891 with 0.5 percent higher. US dollar index is 0.08% higher at 95.68 while Gold pressure persists sending the precious metal down to 1311. The 10-year U.S. Treasury yield, trading at 2.695 percent after, gained six basis points on Friday just to pull away from a four-week low of 2.619%

European indices started lower with DAX losing 0.31 percent, CAC40 is down 0.44 percent at 4,996. In Madrid, IBEX35 gives up 0.70%, while stocks in London started flat.

On the Lookout: US President Donald Trump and China’s Xi Jinping will meet later in February amidst the recent improvement in the sentiment surrounding US-China trade negotiations. Brexit Secretary Stephen Barclay and senior government officials are due to discuss alternative arrangements to the Irish backstop this week. The economic calendar starts today with US factory orders and durable goods, on Tuesday traders will watch the RBA meeting and Australian trade and retail sales data.

Trading Perspective: The greenback started the week outperforming its major peers after Friday’s US jobs data, the Aussie dollar is down 0.26 percent against USD to 0.7231 while NZDUSD trading below 0.69.

EURUSD Daily Chart

EURUSD started 0.10 percent lower to 1.1448 in quiet trading after a euro rally the previous week which sent the pair to the 1.15 area. January was a good month for the common currency as the market has priced the FED rate hike pause, but it seems that missed the worst than expected economic figures from the eurozone. The GDP booked a nice 1.8% growth in 2018, but looking behind the numbers, the second semester was very slow registering only 1% growth with downwards revision from several institutions. Italy has now entered a technical recession with quarterly growth negative in the third and fourth quarter of 2018. Also, 2019 is an election year for many European countries and the Brexit outcome expected by March would weigh on the common currency.

The technical picture has deteriorated in the short term as the pair broke below the 50 and 100-hour moving average at 1.1451 and targeting the 200-hour MA at 1.14. On the upside, Friday’s high at 1.1489 is the first resistance while 1.1586 is a key supply zone which if breached will attract more traders. Open interest in EUR futures markets shrunk by nearly 2.5K contracts on Friday from Thursday’s final 529,890 contracts, according to preliminary figures from CME Group. Volume dropped for the first time after three consecutive builds, this time by almost 59.6K contracts.

GBPUSD is trading 0.21 percent lower at 1.3054 at the strong support 200-day MA; the pair has lost momentum after the pair rejected at 1.32 last week. Immediate support can be found at 1.30 round figure while the next support is 1.2905 the 100-day moving average. On the flipside, 1.3115 is the first resistance while a break above will drive the prices to 1.3150.

GBP futures markets from CME Group, investors added just 971 contracts to their open interest positions on Friday vs. Thursday’s final 197,655 contracts. Volume extended its downtrend, this time decreasing by 14.9K contracts.

GBPUSD Daily Chart

Asian Stocks Ended the day Bearish

January 29, 2019 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Asian stocks, banks, Brexit Plan B, ECB, economy, FED, Huawei, monetary policy, regulators, Sino-U.S trade, US-China Trade Talks

Asian stocks finished the day lower as the U.S. Justice Department yesterday brought charges against Huawei Technologies Co. alleging that it stole trade secrets from an American rival and committed bank fraud by violating sanctions against doing business with Iran. Caterpillar and Nvidia both reported forecasts for 2019 that disappointed analysts expectations. Nikkei 225 index in Tokyo shed 0.08% to 20,664, Hong Kong’s Hang Seng index was 0.14% lower at 27,546, and South Korean Kospi lost 0.2%. Shanghai Composite index lost 0.13% to 2.593, and Australian stocks started the holiday-shortened week under pressure, with the ASX200 down 0.75% as healthcare and banking sectors losses weigh heavily. European markets slide in the early session, DAX skid 0.63 percent to 11,210, CAC40 is 0.04 percent lower at 4,887, while London stocks started 0.50 percent higher at 6,781.

Gold hit a fresh seven-month high at $1304 as the precious metal benefited from the slight dip in the US Dollar, the yellow metal has been in an upward trend since November, and the less hawkish outlook from Federal Reserve has assisted the rally.

On the Lookout: A key event for markets today is the UK government votes on amendments to Theresa May’s “Plan B”. Investors are watching the earnings reports closely from both sides of the Atlantic as big corporations will report the outlook and future guidance. In Australia, there was a slump in NAB December business conditions from +11 to +2, while confidence remained unchanged at +3 for the economy. Conditions are down sharply from the first half of 2018 when the index averaged +18. In Eurozone, positive news is coming from Greece which will sell 2 Billion euro’s in 5 year bonds for the first time since the bailout. In Wall Street, consumer confidence from the Conference Board is due out later today. Markets will also be looking to the start of the trade talks in Washington tomorrow between the US and China. There’s also the Fed meeting to follow tomorrow so that will only add to the cautious approach by investors today.

Trading Perspective: Cautious trading in the forex market with USD index trading 0.04 percent lower at 95.72 while the pressure in Aussie dollar holds with AUDUSD giving up 0.01 percent to 0.7160, rebounding from the Asian session lows at 0.7137. Euro is posting gains against Swiss Franc (+0.16% – 1.1351) and Pound (+0.15% – 0.87061).

EURUSD Daily Chart

EURUSD positive momentum from November is still intact as pressure hit the US Dollar. As of the time of writing, the pair is adding 0.08 percent to 1.1438 helped by France Consumer Confidence which came above analyst’s expectations (88) in January. The euro strength can be eliminated by the 100-day moving average at 1.1450 and then the monthly high at 1.1486. Traders seem to ignore the Mario Draghi comments that the risks for Europe are turning to the downside. Support will be met at yesterday’s low at 1.1390 while more buying support will be found at the weekly high at 1.1289.

Investors in Euro futures added just 250 contracts to their open interest positions on Monday from Friday’s final 530,327 contracts. Volume, instead, dropped for the second session in a row, this time by around 94.7K contracts.

GBPUSD is trading 0.05 lower at 1.3151 moving in narrow 30 pip trading range as the Brexit talk comes into the spotlight again. A move back to 1.3090 can’t be ruled without canceling the bullish momentum – a break below will test the support at 1.3054. On the upside, 1.3212 is the first resistance while more supply will emerge at 1.3240 the weekly 50 SMA.

Open interest in Pound futures markets rose by nearly 5K contracts on Monday vs. Friday’s final 207,984 contracts, according to data from CME Group. On another direction, volume shrunk by around 41K contracts, reverting the previous build.

GBPUSD Weekly Chart

Fading Trade Optimism, Gloomy Economic Outlook Smack Risk

January 23, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, china, Dollar, GBP-USD, US-China Trade Talks, USD 10-Year bond yield, USD/JPY

Summary: Trade optimism faded, and the prospects of a slowing global economy weighed on markets. The Trump administration reportedly cancelled extended trade talks with China which were scheduled for January 31. It was risk-off which sent stocks, yields, resources and the Aussie tumbling. Risk appetite soured further after the IMF cut its global growth forecast to 3.5% from 3.7% in 2019 and 3.6% from 3.8% in 2020 due to the US-China trade war. The IMF and the world’s top executives are meeting at the World Economic Forum in Davos, Switzerland. The Dollar dropped against the haven Yen to 109.25 (109.65). The Aussie slumped 0.57% to 0.7122 (0.7160). Prospects for a delay in Brexit lifted the British Pound. Wall Street stocks tumbled with the S&P 500 down 1.2 % to 2632 (2664 yesterday). Bond yields fell with the benchmark US 10-year note down 5 basis points to 2.73%. US December Existing Home Sales missed forecasts, falling to 4.99 million, the lowest since November 2015

Forex Factory US Existing Home Sales Chart – 23 January 2019

USD/JPY – the Dollar slid against the safe-haven Yen to 109.145 overnight low (109.65) before settling at 109.22. The drop in the US 10-year yield to 2.73% from 2.78% also weighed on USD/JPY. The Bank of Japan is expected to maintain its policy and keep interest rates unchanged at the conclusion of its 2-day meeting today. Traders will be focusing on the BOJ’s Quarterly Economic Outlook for Japan’s assessment of the economy.
AUD/USD – The risk-off profile came back to haunt the Aussie Battler which underperformed, slumping 0.57% to an overnight low of 0.71200 (0.7160). The Australian Dollar, often the proxy for China and Asia, fell after China reported its slowest GDP growth in nearly 3 decades.
GBP/USD – Sterling outperformed, climbing against the US Dollar and other Rivals. Market expectations are growing for a delay in Britain’s departure from the EU over continued bickering amongst Parliament on Brexit terms. The British Pound rallied to 1.2965, up 0.53% against the Dollar. EUR/GBP slipped 0.57% to 0.8770 from 0.8820 yesterday.

On the Lookout: Amidst all the news that led to last night’s risk-off stance, the partial US government shut-down dragged into its 32^nd day and is in danger of becoming a full-blown crisis. Over 800,000 US government employees are entering their second week without pay. Markets have shrugged this aside as it has not affected the US currency in the past. However, we are now in uncharted waters. The Chicago Commodities and Futures Trading Commission is one of those government offices affected by the shutdown. The last complete Commitment of Traders CFTC report was on December 18. Many traders are in the dark over the market’s positioning.
The benchmark US 10-year bond yield slumped 5 basis points to 2.73% from 2.78%. Existing US Home Sales slumped to the lowest figure since November 2015. Other global yields were either flat or had smaller falls. Which is a further constraint for the Dollar to advance.
Today’s data and events include: New Zealand’s Q4 CPI, just released rose 0.1% beating forecasts of 0.0%. Japan’s Trade Deficit is forecast to narrow with a fall in imports and exports expected. The Bank of Japan’s interest rate decision, Monetary Policy Statement and Quarterly Economic Outlook are released at 1 pm Sydney. The BOJ’s press conference follows later in our afternoon. Canadian Headline and Core Retail Sales and US Richmond Manufacturing Index round off today’s numbers.

Trading Perspective: Markers will continue to monitor both trade and global growth developments after both took a hit on recent developments. In all this mix, the Dollar Index (USD/DXY) was little-changed at 96.28 (96.36 yesterday). EUR/USD finished flat at 1.1365 as traders await the ECB’s meeting tomorrow. US economic growth has also slowed with US housing lagging behind employment and wages. As the government shutdown enters its 32^nd day in unprecedented waters the risk is for a lower Greenback. Watch the US yields.

Barchart.Com USD JPY 1Y Chart – 23 January 2019

USD/JPY – the Dollar rallied back to 109.35 current levels as traders await the BOJ announcement. While the BOJ is not expected to deliver any surprises, markets will focus on their economic outlook given recent developments. A weaker appetite for risk as well as lower US bond yields will keep the USD/JPY topside limited. Immediate resistance can be found at 109.60 and 109.90. Immediate support lies at 109.20 (overnight low 109.145) followed by 108.90. Look to sell USD rallies. Likely range 109.00-70.
AUD/USD – The Australian Dollar is once again hampered by the markets risk-off stance and slowing Chinese economy. This has prevented the Aussie from breaking through the strong resistance between 0.7210-0.7260. However, lower the Australian Dollar is also quoted against the US Dollar, something which is fundamental to the Aussie trade. Both factors should continue to exert influence on the Battler. Look to trade either extremes. Yesterday Australian 10-year bond yields were unchanged at 2.30%, while its US counterpart fell 5 basis points. This should be AUD/USD supportive. Immediate support at 0.7110/20 should hold. The next support can be found at 0.7080. Immediate resistance lies at 0.7150 and 0.7170. Look to buy dips with a likely 0.7110-0.7170 range.
GBP/USD – The British Pound outperformed all currencies, climbing 0.53% against the US Dollar and the Euro. We can assume that the market positioning has been short in the Pound and this is a correction. The chances of a soft or delayed Brexit have increased with a second referendum a possibility. GBP/USD consolidated its gains, trading to an overnight high of 1.29758 which remains immediate resistance. The next level is the psychological 1.3000. Sterling traded to a high of 1.29988 a week ago on the back of a generally weaker US Dollar. Immediate support is found at 1.2920 and 1.2880. Look to trade both sides today with a likely range of 1.2920-1.2990. Prefer to sell rallies.

Happy trading all.

Pound Outperforms, Bets Build on Soft Brexit, Dollar Little-Changed

January 18, 2019 by Michael Moran Leave a Comment Filed Under: Market News, Market News - Asia Open Tagged: AUD/USD, Brexit, British pound, Dollar, GBP-USD, Steven Mnuchin, Theresa May, US 10-year bond yield, US-China Trade Talks, USD/JPY

Summary: The British Pound outperformed, rising to 2-month highs as bets increased for a soft-Brexit. Although many options remain, May’s survival removed some political uncertainty for now. Elsewhere, the Wall Street Journal reported that US Treasury Secretary Steve Mnuchin was considering lifting Chinese trade tariffs. Wall Street stocks soared to the day’s highs before easing at the close as the US Treasury denied the comments.
US Weekly Jobless Claims and the Philly Fed Manufacturing Index both beat forecasts.
The partial US government shutdown entered record territory, overtaking 1995’s 21 days.

GBP/USD – The British Pound shrugged off Brexit blues, rallying to 2 months highs at 1.30008 before easing in early Sydney. Sterling also rallied strongly against other Rivals. The EUR/GBP cross fell to 0.8770, 2-month lows. With some of the risk associated with Brexit removed, short GBP bets against both the Dollar and other currencies are being unwound.
AUD/USD – reversed losses after trading to an overnight low of 0.71467, rallying to 0.7220 on the talk of US easing of Chinese trade tariffs. AUD/USD eased back to 0.7193 as the US Treasury denied the talk.
USD/JPY – The Dollar rallied to 2-week highs at 109.377 on the trade tariff easing talk before settling a touch lower at 109.18. US bond yields edged higher, further support this currency pair.

Trading View USD 10 Year Bond Yield Chart – 18 January 2019

US 10-Year Bond Yield – The benchmark 10-year yield climbed one basis point to 2.75%, this year’s high. Earlier this year, the 10-year bond yield fell to 2.55% lows.

On the Lookout: Amidst all the noise, the Dollar Index (USD/DXY) finished little-changed. The British Pound’s outperformance has resulted from the removal of some political uncertainty. Japan’s safe-haven Yen is being unwound from the flash-crash 2 weeks ago as US yields climb. The Euro is struggling to gain ground as more ECB officials (Mersch and Nowotny) highlight Euro area economic slowdown. The Australian Dollar bounced back on the US-China trade tariff reduction talk. Emerging Market currencies all saw marginal gains.
Optimism is building on US-China trade talks while the US Government shutdown enters record territory.
After a hectic week, markets will take a breather today and focus on the data releases.
Japan’s National Annual CPI and Revised Industrial Production data (December) are due first up. The UK reports on monthly Retail Sales with Canada finishing off with Headline and Core CPI.

Trading Perspective: US Bond yields rose and have climbed off their lows to 2019 highs. This should provide the Dollar with overall support for now.

Daily FX.COM – GBP USD Chart – 18 January 2019

GBP/USD – The Pound rebound extended to 1.30008 highs as some of the political risk has been shaken from the currency. Sterling rose against its other Rivals too and its rally was broad-based. From here 1.3000 and 1.3030 are immediate resistance, with 1.3030 formidable. Immediate support can be found at 1.2960 and 1.2920. Prefer to sell rallies. Likely range 1.2960-1.3010.
USD/JPY – The Dollar Yen recovery hit 109.377. Immediate resistance can be found at 109.40, followed by 109.60. A sustained break of 109.60 will see 110.00. Immediate support can be found at 108.80 and 108.50. Likely range today 108.80-109.30.
AUD/USD – The Aussie jumped to an overnight high of 072203 from 0.7180 yesterday. Immediate resistance lies at 0.7220 followed by 0.7250. Immediate support can be found at 0.7170 and 0.7140. The optimistic trade outlook has reignited support for the Battler. Any change in that sentiment could see the Aussie grind back down. On the day we can expect a likely range of 0.7170-0.7220. Just trade the range shag on this one.
US Ten-Year Bond Yield – The bounce from 2.55 to today’s 2.75% should slow at these levels. There is good resistance between 2.75 and 2.80% while strong support now lies at 2.65%. Any grind higher to 2.80% will give the US Dollar added support.

Happy Friday and trading all.

Markets searching for direction after global selloff

December 7, 2018 by Nikolas Papas Leave a Comment Filed Under: Market News - European Open Tagged: Crude Oil, EURUSD, GBPUSD, US-China Trade Talks, USDJPY

Summary: Asian shares ended the trading session slightly higher as worries over U.S-Sino trade war were calmed by conciliatory comments from Beijing. In Tokyo Japan’s benchmark Nikkei225 added 0.8% to 21,680.15, and Australia’s S&P/ASX 200 gained 0.4% to 5,680.90. South Korea’s Kospi rose 0.3% to 2,076.42. Hong Kong’s Hang Seng index edged 0.1% lower to 26,133.53, while the Shanghai Composite was flat at 2,605.89. Shares also rose in India, Indonesia and Taiwan.

Crude Oil : Crude Oil prices slipped in Asia trading session, as the meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria failed to announce any output decision. U.S. crude inventories fell by 7.3 million barrels to 443.2 million barrels as of Nov. 30 from last week, the first drop in 11 weeks, according to the Energy Information Administration on Thursday.

AUDUSD : AUDUSD struggled to build on overnight attempted recovery from over three-week tops and traded with a negative bias for the fourth consecutive session. Despite yesterday’s bearish mood for the pair the psychological 0.72 level managed to hold, traders now expecting a recovery to 0.7240 area.

USDJPY : USDJPY is trading in narrow trading range between 112.92 and 112.60, Karen Jones, analyst at Commerzbank, notes that the USDJPY pair recovered after being sold off towards the base of the cloud at 112.16 and further support is seen along the 8 month support line at 111.93.

“This may hold the initial test BUT the sell off is looking directional and failure here would target the 110.59/109.77 200 day moving average and August low. If the 109.77 August low were to give way, the June 8 low at 109.20 would be in focus.”

“Failure there would imply a slide back to the 108.12 May 29 low and the mid February high at 107.91. Minor resistance comes in along the 55 day ma at 113.07.”

EURUSD : EURUSD started the European trading session with gains around 1.1380 area with investors looking to developments in Italy and the Brexit negotiations as main drivers of the price action. PM Conte’s government is expected to submit a revised version of the budget proposal at some point next week, while the crucial vote in the House of Commons is due on December 11. CME Group, investors added nearly 1.5K contracts to their open interest positions on Thursday from Wednesday’s final 535,856 contracts. In the same direction, volume rose sharply by almost 128K contracts.

GBPUSD : GBPUSD upside momentum capped at 1.28 with the pair giving up Asians session gains just to start European trading at 1.2750. CME Group’s advanced data for GBP futures markets noted open interest rose by almost 2K contracts on Thursday vs. Wednesday’s final 235,336 contracts. Volume followed suit, up by around 62.1K contracts, partially reverting the previous draw.

Traders are now eyeing U.S. jobs data which will be released later today as a way to gauge the country’s economic stability and for hints as to whether the US economy may be losing steam in the face of US – China trade tensions.

Dollar Eases After US Retail Sales Slumps to Worst in Nine Years

Asian Stocks Higher amid Positive Reports Regarding the Trade Talks

Stock Markets Higher on Positive Sentiment

Asian Stocks Ended the day Bearish

Fading Trade Optimism, Gloomy Economic Outlook Smack Risk

Pound Outperforms, Bets Build on Soft Brexit, Dollar Little-Changed

Markets searching for direction after global selloff

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