Traders Focus on Trade Talks between the US and China

Trade talks between the US and China are also in focus as high-level talks between the two were due to conclude in Beijing later. Traders were also eyeing any developments in the US as President Trump was set to sign a compromise spending deal to avert another government shutdown, but also declare a national emergency in an effort to secure funds to build a Mexico border wall. Asian shares finished lower with Nikkei in Tokyo down 1.13 percent at 20,900, and the Hang Seng in Hong Kong lost 1.87 percent at 27900 and Shanghai composite shed 1.37 percent. Australian shares bounced off intraday lows to finish a touch firmer on Friday, with the ASX 200 adding just 0.1 percent at 6,066 following gains across all sectors. 


On the Lookout: Financial Times has reported overnight that the US and China were scrambling to reach at least a “memorandum of understanding” by the end of today’s meeting so as to pave the way for a meeting between President Trump and his Chinese counterpart Xi Jinping. Spanish PM Sanchez calls for general elections on April 28th in a surprise move adding another headache for Eurozone. The Ifo Institute came out with a report stating that new US import duties on cars could reduce German car exports to the USA by 50% in the long term.

In the US session economic calendar, we have the Canadian foreign securities purchases data will be reported at 13:30 GMT, the main risk events remain the US industrial production data that will be released at 14:15 GMT, followed by the University of Michigan (UoM) consumer sentiment gauge at 15:00 GMT. Later in the day the focus will be on the weekly US rigs count data due to be published by Baker Hughes at 18:00 GMT.

Speeches from the global central bankers are scheduled for today, at 13:00 GMT we have the ECB Governing Council member Coeure, and at 14:55 GMT, FOMC member Bostic will also deliver a speech.


Trading Perspective: The US Dollar index is trading flat for the day at 97.05 as a Reuters poll sees Fed raising rates once in 2019. The Aussie dollar is trading steady around 0.71 while USDCAD records losses in early European session down to 1.3283. In commodities markets, crude oil gained 6 cents to $54.47/barrel while it’s cousin Brent crude in London rose 30 cents to $64.85/barrel.  Gold added 7 dollars to trade at $1315 amid global growth worries.

EURUSD Hourly (H1) Chart

EURUSD is trading in a trading range that established this week from the yearly low at 1.1248 to 1.13. A move above the 1.13 level can give bulls a boost to 1.1330 the 100-hour moving average. On the downside the February low at 1.1248 will provide the first support, a break below will result in a test of 2018 lows in the 1.1215 area which remains on the cards.

Other than weak economic figures the political concerns remain well and sound in Eurozone as we get closer to the EU parliamentary elections, the snap elections which called today in Spain, the unresolved issue of the ‘yellow vests’ in France, the Italian standoff also the heavy battered Greek economy will face elections later this year with a struggling banking sector looking for extra capital to control the NPL’s.

Open interest in EUR futures markets dropped for the third session in a row on Thursday, this time by more than 3K contracts vs. Wednesday’s final 537,982 contracts, according to advanced figures from CME Group. Volume, instead, rose by around 27.6K contracts.

You can find below the EURUSD FX option expiries for Feb 15 NY cut at 10:00 Eastern Time.

  • 1.1200 1.0bn
  • 1.1250 748m
  • 1.1275 709m
  • 1.1365 1.1bn
  • 1.1390 710m

GBPUSD: The pair found bids after the United Kingdom Retail Sales (MoM) came in at 1%, above analyst’s expectations (0.2%) in January and managed to cross above 1.28. The pair will face resistance at the 100-day moving average around 1.2880 followed by 1.2950 the yearly high. On the flipside the low from yesterday at 1.2770 will support the pair while a breach of that level will pave the way for a visit down to 1.260 the January lows.

GBPUSD Daily Chart