USD Looking North to YTD High at 98.37

Asian indices finished lower for one more day as US indices fell by as much as 0.9 percent last night, slumping to a three-month low and puts the Dow Jones on track for its sixth straight weekly decline. The Nikkei225 finished 0.49 percent lower to 20,900 below its 100-day moving average. The Hang Seng benchmark in Hong Kong finished 0.55 percent lower at 27,088. The Shanghai Composite finished 0.93 percent lower to 2,887 below the 100-day MA, while in Singapore the FTSE Straits Times index finished 0.88 percent lower to 3,135. Australian equities closed down 47 points or 0.74% to 6,392. Losses from healthcare, property, energy, and mining stocks are weighing most heavily.

European session started higher today following news that the EU is preparing to launch EDP against Italy in June. CAC40 is 0.40 percent higher at 5,243 while the FTSE MIB in Milan is trading 0.46 percent higher at 20,091. The London Stock Exchange is adding 0.12 percent to 7,194 as traders are increasingly concerned over the impact that the ongoing trade dispute is having on the global economy.

In commodities markets, crude oil adds 0.73 percent to 59.22 as Saudi Arabia is likely to lift prices for all crude grades it sells to Asia in July for a third straight month, and an industry report showed a decline in US crude oil inventories that exceeded analyst expectations. Brent oil trades also higher at $69,82 per barrel as major oil producers have yet to agree on adjustments on output. Gold is trading lower today to the 1277 zone as sellers took control. The precious metal broke below the 200-hour moving average turning the technical picture to bearish. Gold will find support at 1272, the low from the previous week, while more bids will emerge at the 200-day moving average at 1255. On the upside, resistance stands at 1296 the 100-day moving average.   

In cryptocurrencies market, bitcoin (BTCUSD) trades higher to 8,692, the daily low for BTC was at 8,540, and the daily high at 8,764. Immediate support for BTC stands now at $8,000 round figure, and on the upside, strong resistance stands at 8,845 the recent high. eToro’s, Mati Greenspan, says Bitcoin’s increasingly limited supply is the number one reason for the leading cryptocurrency’s 2019 rally. Ethereum (ETHUSD) rebounded sharply overwhelming yesterday losses adding 18 dollars to 281. On the upside, the immediate resistance stands at 287 the high from Asian session while the support stands at 258 and the 100 hour SMA, Litecoin (LTCUSD) also trades higher at 116.75. The crypto market cap holds above $175.0B.

XAUUSD Daily Chart

On the Lookout: Bank of Canada left its policy rate at 1.75%. This was a result fully expected and priced in already by the market. However, Governor Poloz was bullish on the growth outlook.

China’s diplomat was out on the news earlier today calling the US’ trade dispute as “naked economic terrorism”.

The Australian residential building approvals fell 4.7% m/m in April, adding to the revised 13.4% decline seen in March. Fitch Credit Rating notes that Australia’s growth is at decade-low despite de-synchronized cycles.

In the America economic calendar, we await the US prelim Q1 GDP, goods trade balance. Personal Consumption Expenditure Prices will be released at 12:30GMT. At the same time, the Canadian Q1 current account data will be reported. Next of relevance remains the US pending home sales at 14:00GMT and the US EIA weekly crude stocks data due on the cards at 15:00GMT.

The speeches by the Fed Vice President Clarida and BOC policymaker Wilkins will also remain in focus.

Trading Perspective: In fx markets, major currencies are little changed. The US dollar trades higher above 98.05 looking to 98.37, the 2019 high from May 23. The Aussie dollar adds 10 cents to 0.6928 supported by better Australian consumer confidence data and the rally in iron ore prices. Kiwi, on the other hand, gives up 20 cents to 0.6515 level as New Zealand has cut its budget surplus forecast for 2019/20 to NZD1.3bn.

GBPUSD trades slightly lower at 1.2630 as the bearish momentum for Cable is still intact amid growing concerns over Brexit. The pair hit the daily low at 1.2615 and the daily high at 1.2640. Major support now stands at 1.26 recent low. On the upside, immediate resistance now stands at 1.27 the high from Asian session while more sellers will emerge at the 200-hour moving average at 1.2713. Sterling shows persistent weakness amid UK political uncertainty and also on the back of risk aversion.

In Pound futures markets, open interest rose by nearly 4.4K contracts, volume dropped for the second session in a row, now by around 8.7K contracts.

EURUSD consolidates around 1.1130 on trade tensions, patient Fed, and EU weakness. The pair is losing the bullish momentum build last Friday and now looks bearish and an attempt down to 1.11 YTD low looks possible. On the upside, the immediate resistance stands at 1.12 the high from Tuesday, while more offers will emerge at 1.1245 the 50-day moving average. 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, traders added 792 contracts to their open interest positions on Wednesday, and the volume shrunk by around 18.8K contracts.

USDJPY got bids during the Asian session and managed to break above the 50 and 100-hour moving average turning the short-term momentum to bullish. Today the pair hit the low at 109.47 and the high at 109.75. The pair will find support at 109.14 the low from yesterday. On the upside, immediate resistance for the pair now stands at 110 and then at 110.54 the 100-day moving.

In Yen futures markets open interest shrunk by 1500 contracts; the volume also shrunk by around 3000 contracts.

USDJPY Hourly (H1) Chart

USDCAD holds above the 1.35 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 50-day moving average around 1.3392 while extra support stands at 1.3300 round figure. On the upside, immediate resistance stands at the 1.36 zone before an attempt to YTD high.