Hopes on Trade Truce Extension Drives Markets

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.