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จันทร์, ตุลาคม 14, 2019

These are the main highlights of the CFTC Positioning Report for the week ended on October 8th. Speculators took their net short positions in EUR to t

These are the main highlights of the CFTC Positioning Report for the week ended on October 8th. Speculators took their net short positions in EUR to the highest level since June 11, always on the back of the persistent slowdown in the euro area and prospects of ECB easing and in spite of the broad-based sell off in the Greenback during the past sessions.GBP net shorts shrunk to the lowest level since early July following renewed speculations of a positive outcome from the Brexit negotiations before the October 31st deadline. The positive tone in the risk-associated universe motivated speculators to trim further their long positions in the safe haven JPY, taking net longs to the lowest level since August 6th.

Saudi Arabia's energy minister on Monday said that the kingdom will ve at 12 million barrels per days of capacity at the end of November, per Reuters.

Saudi Arabia's energy minister on Monday said that the kingdom will ve at 12 million barrels per days of capacity at the end of November, per Reuters. "We have time to review the details of OPEC+ deal if needed before the December meeting," the minister added. These comments seem to be putting pressure on crude oil prices. As of writing, the barrel of West Texas Intermediate (WTI) was trading at a fresh daily low of $53.50, losing 2.3% on a daily basis. Below are some additional quotes from the minister. "Oil market is not stable yet. We see the volatility on the market." "Saudi Arabia's oil output in October was at 9.86 million barrels per day, same in November." "We are continuing our voluntary cuts at approx 400,000 barrels per day." "We hope that Nigeria, Gabon, South Sudan and Iraq will be fully compliant with OPEC+ deal in October." "We are asking Nigeria to commit to the agreement."

The USD/CAD pair built on its steady intraday move up and is currently placed at the top end of its daily trading range, around the 1.3225 region. A c

A modest pickup in the USD demand helped regain some traction.Weaker oil prices undermined the Loonie and remained supportive.The USD/CAD pair built on its steady intraday move up and is currently placed at the top end of its daily trading range, around the 1.3225 region.
 
A combination of supportive factors helped the pair to regain some positive traction on the first day of a new trading week and recover a part of the previous session's sharp intraday slide to one-month lows – touched in reaction to upbeat Canadian employment details. Weaker Oil/pickup in the USD demand underpinned However, a slight deterioration in the global risk sentiment, despite a positive outcome from the much-hyped US-China trade talks, benefitted the US Dollar's relative safe-haven status against its Canadian counterpart and extended some support to the major.
 
This coupled with a sharp intraday slide in Crude Oil prices, on lingering doubts about the outlook for the world economy, further undermined demand for the commodity-linked currency - Loonie and remained supportive of the bid tone surrounding the pair.
 
It, however, remains to be seen if the pair is able to capitalize on the positive momentum or run into some fresh supply at higher levels amid firming market expectations that the Fed will cut interest rates further at its upcoming monetary policy meeting on October 29-30.
 
Both the US and Canadian markets will remain closed on Monday in observance of Columbus Day and Thanksgiving Day, respectively. Hence, absent relevant market-moving economic data on Monday leaves the pair at the mercy of USD/Oil price dynamics. Technical levels to watch  

Even though Eurozone industrial production increased by 0.4% in August, it doesn't really seem like the industrial recession has ended just yet, notes

Even though Eurozone industrial production increased by 0.4% in August, it doesn't really seem like the industrial recession has ended just yet, notes Bert Colijn – Senior Economist, Eurozone at ING. Key quotes: While the industrial downturn has hit Germany and Italy the hardest out of the larger Eurozone economies, August data showed some relief for both.
 
On the other hand, France saw a decline, confirming that it isn't immune to the global problems that the industry is facing. Overall, as production data is rather volatile, it does not look like this is a turning point for any of the large industries as concerns persist.
 
The outlook for the industry does not show much light at the end of the tunnel as September survey data suggest continued contraction at the end of Q3. Production peaked almost two years ago, but spillovers to the service sector have remained limited for now. That means that GDP growth can remain positive in the short run although worries about the coming quarters persist.

EUR/USD Overview Today last price 1.1036 Today Daily Change 26 Today Daily Change % -0.01 Today daily open 1.1037 Trends Daily SMA20 1.0985 Daily SMA

The rally in EUR/USD briefly surpassed the key 55-day SMA in the mid-1.10s last Friday and recorded monthly tops in the 1.1060/65 band, although it did not close above it.If the pair manages to gather extra traction and clear the 55-day SMA, the next stop could be September’s peak at 1.1109.Above this area emerges the 100-day SMA at 1.1139.EUR/USD daily chart  

The intraday selling pressure around the British Pound remained unabated through the early European session on Monday and dragged the GBP/USD pair to

Bulls failed to capitalize on last week’s strong upsurge to over three-month tops.Renewed Brexit-related uncertainties exerted some fresh pressure on the Pound.A goodish pickup in the USD demand added to the selling bias around the major.The intraday selling pressure around the British Pound remained unabated through the early European session on Monday and dragged the GBP/USD pair to daily lows, around the 1.2560-55 region in the last hour.
 
Having faced rejection near the very important 200-day SMA, the pair came under some fresh selling pressure on the first day of a new trading week and eroded a part of Friday's strong upsurge to the highest level since late-June. Renewed concerns that the UK and European leaders may not reach a deal by October 31 Brexit deadline turned out to be one of the key factors exerting fresh downward pressure on the British Pound. Brexit optimism showing signs of fading rather quickly It is worth mentioning that the pair on Friday gained some strong follow-through traction and rallied to levels just above the 1.2700 handle after the European Council President Donald Tusk said that we have received promising signals from Ireland’s Leo Varadkar that there could be a deal on Brexit. Together with Thursday's best single-day percentage advance since March, the pair posted the best two days of gains in over a decade.
 
Meanwhile, the optimism seemed to fade rather quickly in reaction to Irish Foreign Minister Simon Coveney's comments earlier this Monday, saying that a deal is possible but we are still not there yet. Coveney's remarks suggested prevailing differences between the two sides on the border between Ireland and the UK’s Northern Ireland. Hence, the key focus will remain on the EU leaders meeting on Thursday and Friday to see if a deal is still possible before October 31.
 
Apart from Brexit-related uncertainties, the pair was further pressurized by a goodish pickup in the US Dollar demand. As investors took a closer look to much-hyped breakthroughs from the crucial high-level US-China trade talks, a slight deterioration in the global risk sentiment seemed to benefit the Greenback's relative safe-haven status against its British counterpart.
 
It will now be interesting to see if the pair is able to attract any buying interest at lower levels or continues with its intraday corrective slide amid absent relevant market-moving economic releases and a US holiday in observance of Columbus Day. Technical levels to watch  

Dollar Index Spot Overview Today last price 98.42 Today Daily Change 19 Today Daily Change % 0.09 Today daily open 98.33 Trends Daily SMA20 98.81 Dai

DXY is looking to reverse at least part of the recent sharp sell off to the 98.30/20 band, coincident with the 55-day SMA.The continuation of the selling impetus carries the potential to spark a deeper pullback to the Fibo retracement of the 2017-2018 drop at 97.87 ahead of the 100-day SMA at 97.80.The resumption of the uptrend should initially visit the 21-day SMA at 98.78 ahead of last week’s top at 99.25.DXY daily chart  

EUR/JPY Overview Today last price 119.45 Today Daily Change 52 Today Daily Change % -0.16 Today daily open 119.64 Trends Daily SMA20 118.25 Daily SMA

EUR/JPY met some importamt resistance in the 119.80 region on Friday, coincident with the 10-day SMA and fresh multi-week highs.A break above this key level should open the door for a test of September’s peak just beyond 120.00 the figure.The continuation of the bullish momentum could impulse the cross to the next target at July’s high at 123.35.EUR/JPY daily chart  

European Monetary Union Industrial Production w.d.a. (YoY) registered at -2.8%, below expectations (-2.5%) in August

European Monetary Union Industrial Production s.a. (MoM) above expectations (0.3%) in August: Actual (0.4%)

The AUD/USD pair refreshed daily lows, around the 0.6760 region during the early European session on Monday and erased a major part of the previous se

Investors looked past Friday’s breakthrough on the US-China trade disputes.Weaker Chinese data/ pickup in the USD demand exerted some fresh pressure.The AUD/USD pair refreshed daily lows, around the 0.6760 region during the early European session on Monday and erased a major part of the previous session's goodish move up to three-week tops.
 
Despite a positive outcome from the much-hyped US-China trade negotiations, the pair failed to capitalize on last week's bullish move and met with some fresh supply on the first day of a new trading week amid a modest pickup in the US Dollar demand. Fading trade optimism/weaker Chinese trade data weigh It is worth reporting that on Friday the US and China announced a roadmap to a phase 1 agreement, which included the suspension of new US tariff planned for this week and a commitment from China to buy more US agricultural products.
 
However, some renewed USD buying interest, supported by some follow-through uptick in the US Treasury bond yields, turned out to be the only factor that kept a lid on any further move up, rather prompted some fresh selling around the major.
 
This coupled with weaker-than-expected trade data from China, showing the sharpest drop in imports since 2016, further undermined demand for the China-proxy Australian Dollar and collaborated to the pair's intraday slide on Monday.
 
Meanwhile, a slight deterioration in the global risk sentiment, as depicted by sliding equities, also did little to lend any support to perceived riskier currencies – like the Aussie – amid relatively thin liquidity conditions on the back of a holiday in the US.
 
It will now be interesting to see if the pair is able to attract any buying interest or the current pullback marks the end of the recent bounce from multi-year lows and the resumption of the prior/well-established bearish trend amid fading trade optimism. Technical levels to watch  

Germany's economy ministry, in its monthly report, said that indicators don't point to a turnaround but a pronounced recession is not expected. Additi

Germany's economy ministry, in its monthly report, said that indicators don't point to a turnaround but a pronounced recession is not expected. Additional quotes: The German economy is weighed down by global weakness.

Services, construction growth is largely compensating for a slowdown in manufacturing.

Drop in unemployment was surprising.

According to Iris Pang, Greater China Economist at ING, China's September trade data, released earlier this Monday, reflects increasing damage from th

According to Iris Pang, Greater China Economist at ING, China's September trade data, released earlier this Monday, reflects increasing damage from the trade war. Pang provided a brief analysis if this could change after the recent trade talks and also offered an outlook for the Chinese yuan. Key Quotes: China said it had made "substantial progress" with the US after Friday's meeting and again emphasised that "respect" is the key to future successful trade negotiations.
 
Still, there is a five-week period for the two sides to write down exactly what they agreed to in the meeting. This raises questions about how much "progress" has really been made. We think there are probably some important disagreements on the terms of a deal, which could include the yuan mechanism.
 
A statement is scheduled to be released in November. The timing is important because planned US tariffs are due to go into effect in December, hitting an additional $160 billion of Chinese-made consumer goods. If the two sides cannot release a draft agreement as planned in five weeks, it will not bode well for a trade truce.
 
China has always stated that the yuan mechanism is being reformed but we don't think it will announce any significant changes to this in the draft statement. Still, the US is likely to continue to press China to appreciate the yuan, and this issue will make future negotiations tough.
 
The recent appreciation of the yuan is really just a result of the weak dollar rather than any deviation from the trend. We therefore do not think that the USD/CNY will fall below 7.0. Our forecast for 2019 year end is still 7.20.

FX Strategists at UOB Group keep the constructive view on USD/JPY and see a probable move to the 109.00 region in the near term. Key Quotes 24-hour vi

FX Strategists at UOB Group keep the constructive view on USD/JPY and see a probable move to the 109.00 region in the near term. Key Quotes 24-hour view: “While our view for a stronger USD last Friday was correct, the subsequent advance exceeded our expectation as it managed to crack the strong 108.50 level and touched a 2-1/2 month high of 108.61. The rally is running ahead itself and for today, further USD strength is unlikely. USD is more likely to consolidate its gains and trade sideways at these higher levels, expected to be between 108.00 and 108.60”. Next 1-3 weeks: “We indicated last Friday (11 Oct, spot at 107.85) that the top of our expected sideway trading range at 108.50 “is more vulnerable” and added, “a break of this strong level could sent USD to 109.00”. However, the rapid manner by which USD cracked 108.50 was not exactly expected (USD touched 108.61 during NY hours on Friday). While the advance appears to be running ahead of itself, the risk is for further USD strength to 109.00. Only a break of 107.50 would suggest the current upward pressure has eased”.

In view of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, Cable could extend the upside as long as the 1.2400/1.2365 band und

In view of Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, Cable could extend the upside as long as the 1.2400/1.2365 band underpins. Key Quotes “GBP/USD rapidly bounced off the 61.8% retracement at 1.2196, neutralising our forecast. The rally is approaching the 1.2713 200 day ma and shortly above here we find the 55 week ma sat 1.2753 and the 1.2784 June high. We suspect that these will hold, but while dips lower hold over 1.2400/1.2365 it will remain capable of further upside probes. The short term up channel lies at 1.2222”. “1.2365 guards 1.2222 and 1.2196/94”. “Above 1.2785 targets the 200 week ma at 1.3156”.

The upside momentum in the shared currency is losing some traction at the beginning of the week, prompting EUR/USD to recede to the vicinity of 1.1010

EUR/USD is losing upside traction and recedes to 1.1010.A mild recovery in the Greenback is collaborating with the drop.EMU’s Industrial Production next of relevance in the docket.The upside momentum in the shared currency is losing some traction at the beginning of the week, prompting EUR/USD to recede to the vicinity of 1.1010. EUR/USD looks to data, USD After three consecutive daily advances, the pair is now facing some difficulties to keep the rally well and sound on Monday on the back of fresh demand for the Greenback. Spot has been gaining extra ground in past sessions in response to the better mood in the risk-associated complex following auspicious headlines from the US-China trade front and the Brexit process. In addition, weakness in key US fundamentals (mainly the manufacturing sector) has been also lending support to the idea of extra easing by the Federal Reserve in the next meetings. Looking ahead, Monday’s docket in the euro region highlights the publication of August’s Industrial Production and French auction of 3-/6-/12-month BTFs. What to look for around EUR The pair met strong resistance in the mid-1.10s, where sits the key 55-day SMA, sparking some profit taking and the ongoing retracement to the vicinity of the 1.10 support. The corrective upside, however, remains well in place for the time being and supported by the improved mood in the riskier assets and a weak Dollar. Looking at the broader picture, the relentless slowdown in the region does nothing but justify the ‘looser for longer’ monetary stance by the ECB and the bearish view on the single currency in the longer run. On another front, potential US tariffs on imports of EU cars remain well on the table, while the Brexit limbo and UK politics could also maintain gains somewhat limited. EUR/USD levels to watch At the moment, the pair is retreating 0.16% at 1.1017 and a breakdown of 1.0983 (21-day SMA) would target 1.0879 (2019 low Oct.1) en route to 1.0839 (monthly low May 11 2017). On the flip side, the next barrier emerges at 1.1051 (55-day SMA) seconded by 1.1062 (monthly high Oct.11) and finally 1.1109 (monthly high Sep.13).

The upside momentum in USD/CHF could struggle to overcome the 1.0000/28 band, suggested Karen Jones, Team Head FICC Technical Analysis Research at Com

The upside momentum in USD/CHF could struggle to overcome the 1.0000/28 band, suggested Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank. Key Quotes “USD/CHF recovered last week and is capable of retesting the resistance at 1.0000/28, but we suspect that this will again hold. We view near term risks as still on the downside. Scope remains to retest the .9870 55 day ma. Failure at the next lower .9799 September low would push key support at .9716/.9659 to the fore. It is the location of the January, June, mid- and late August lows. Below here sits the .9659 August low and the September 2018 low at .9543”. “A close above 1.0028 is needed to generate some further upside interest but we suspect this will continue to act as a tough near term barrier”.

The Danske Bank analysts provide brief insights on the key events of note later in the day ahead. Key Quotes: Today, focus is first and foremost on th

The Danske Bank analysts provide brief insights on the key events of note later in the day ahead. Key Quotes: Today, focus is first and foremost on the ongoing Brexit negotiations, as the deadline for reaching a deal before the EU summit is tomorrow. There was 'no breakthrough' over the weekend and the rest of the EU seems less upbeat than the Irish. It was also a blow for Johnson that DUP's deputy leader Dodd said 'no' to the current proposal. We now think the probability of a deal is 20% (from below 10% previously) but our base case remains another Brexit extension followed by a snap election. For more details see our Brexit Monitor: 20% probability of a deal but another extension followed by snap election remains our base case , 13 October. Markets will also focus on the ongoing trade negotiations between the US and China after they completed 'phase one' of the negotiations on Friday. Despite the renewed optimism, in particular from the US side, we think there are still significant hurdles for a more comprehensive deal. Today we have a thin calendar in terms of economic data releases. The euro area industrial production in August will likely attract attention given the weak PMIs. We do not expect the data to bring any cheer, showing the industrial recession dragging out in Q3.

Turkey Industrial Production (YoY): -3.6% (August) vs previous -1.2%

The USD/JPY pair edged lower on the first day of a new trading week and eroded a part of the previous session's positive move to the highest level sin

A partial US-China trade deal on Friday weighed on the JPY’s safe-haven status.Traders now seemed inclined to book profit despite a pickup in the USD demand.The USD/JPY pair edged lower on the first day of a new trading week and eroded a part of the previous session's positive move to the highest level since early August.
 
The pair added to its recent gains and continued gaining positive traction for the third consecutive session on Friday – also marking the fourth day of an uptick in the previous five – in reaction to a positive outcome from the crucial high-level US-China trade talks. Investors looked past the latest trade optimism After two days of negotiations, the US President Donald Trump on Friday announced that very substantial phase one deal was made with China. Trump further added that the agreement covered agriculture, currency and some aspects of intellectual property protections.
 
Later, the US Treasury Secretary Mnuchin confirmed that the US has delayed a planned increase in taxes on $250 billion worth of Chinese goods as a part of the deal, which eventually weighed on the Japanese Yen's safe-haven status and remained supportive of the bullish move.
 
The latest optimism continued boosting investors' appetite for perceived riskier assets. The same was evident from some follow-through uptick in the US Treasury bond yields, which assisted the US Dollar to gain some positive traction, through failed to inspire bulls or provide any meaningful impetus.
 
Firming market expectations that the Fed will move to cut interest rates further at its upcoming monetary policy meeting on October 29-30 seemed to be the only factor prompting some profit-taking, albeit the downside is likely to remain limited amid absent relevant market-moving economic releases.
 
Hence, it will be prudent to wait for a subsequent slide back below the 108.00 handle – nearing 100-day SMA – before confirming that the recent momentum has already run out of the steam and positioning for any further near-term depreciating move. Technical levels to watch  

India WPI Inflation came in at 0.33% below forecasts (0.9%) in September

According to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, EUR/USD could extend the recovery to the area above 1.1100 the fi

According to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, EUR/USD could extend the recovery to the area above 1.1100 the figure. Key Quotes “EUR/USD last week eroded the four month downtrend and given that the market has recently reversed from the base of the weekly channel at 1.0892, we view the market as a base. We look for recovery to initially the mid September high at 1.1110. A close above here would trigger another leg higher to the 200 day ma at 1.1218”. “Longer term the critical resistance to overcome is the top of the one year channel at 1.1396 and the 200 week ma at 1.1353”. “Dips lower should be contained by 1.0990 and 1.0941 for an immediate upside bias to be maintained”.

Ireland’s Foreign Minister Simon Coveney recently crosses wires while citing tough issues that remain to be solved for getting the Brexit deal.

Ireland’s Foreign Minister Simon Coveney recently crosses wires while citing tough issues that remain to be solved for getting the Brexit deal. Key quotes"A Brexit deal remains possible but tough issues remain.""Need caution on any deal."FX implications The GBP/USD pair extends its latest pullback after the news while flashing 1.2590 as the quote. However, the pair still trades above three-month top as diplomats from the United Kingdom (UK) and the European Union (EU) are still negotiating the deal.

Germany Wholesale Price Index (YoY) below expectations (-1.3%) in September: Actual (-1.9%)

Germany Wholesale Price Index (MoM) above expectations (-0.6%) in September: Actual (-0.4%)

Failure to cross the key resistance confluence presently drags the GBP/USD pair downwards to 1.2600 while heading into the London open on Monday.

GBP/USD steps back from the key resistance-confluence.50% Fibonacci retracement can entertain short-term sellers while 100-day SMA could question bears afterward.Failure to cross the key resistance confluence presently drags the GBP/USD pair downwards to 1.2600 while heading into the London open on Monday. The pair now aims for 50% Fibonacci retracement of May-September declines, at 1.2568, during further declines. However, 100-day Simple Moving Average (SMA), near 1.2410 now, can limit the pair’s additional south-run. Also supporting the sellers is overbought conditions of 14-bar Relative Strength Index (RSI). Should bears refrain from respecting 1.2410 rest-point, early-month low nearing 1.2195 will flash on their radar. Alternatively, 61.8% Fibonacci retracement, 200-day SMA and a falling trend-line since May 21 limit the pair’s upside around 1.2705/15, a break of which could escalate the run-up to June month high surrounding 1.2785. During the pair’s extended rise past-1.2785, 1.2815 and 1.2865 will becomes bulls’ favorites. GBP/USD daily chart Trend: pullback expected  

GBP/USD has been on the back foot at the beginning of the new week as reports from the intense weekend talks suggest not enough progress has been made

GBP/USD has been on the back foot at the beginning of the new week as reports from the intense weekend talks suggest not enough progress has been made. What levels should we watch? The Technical Confluences Indicator is showing that GBP/USD enjoys significant support at 1.2587, which is a dense cluster including the previous monthly high, the Fibonacci 23.6% one-week, the previous four-hour low, the Fibonacci 38.2% one-day, the Simple Moving average 100-15m, and the Pivot Point one-month Resistance 1.  Further support awaits at 1.2515, which is the meeting point of the Fibonacci 38.2% one-week and the Fibonacci 61.8% one-day.  The initial upside target is 1.2640, which is where the SMA 5-4h and the Fibonacci 23.6% one-day converge.   Next, GBP/USD's upside target is 1.2712, which is the confluence of the previous daily high and the 200-day SMA. This is how it looks on the tool: Confluence Detector The Confluence Detector finds exciting opportunities using Technical Confluences. The TC is a tool to locate and point out those price levels where there is a congestion of indicators, moving averages, Fibonacci levels, Pivot Points, etc. Knowing where these congestion points are located is very useful for the trader, and can be used as a basis for different strategies. This tool assigns a certain amount of “weight” to each indicator, and this “weight” can influence adjacents price levels. This means that one price level without any indicator or moving average but under the influence of two “strongly weighted” levels accumulate more resistance than their neighbors. In these cases, the tool signals resistance in apparently empty areas. Learn more about Technical Confluence

In opinion of FX Strategists at UOB Group, AUD/USD should extend the up move on a daily close above 0.6805 in the near term. Key Quotes 24-hour view:

In opinion of FX Strategists at UOB Group, AUD/USD should extend the up move on a daily close above 0.6805 in the near term. Key Quotes 24-hour view: “We highlighted last Friday that AUD “could edge above the overnight high of 0.6774 but the major 0.6805 level is unlikely to come under threat”. We underestimated AUD strength as it moved above 0.6805 and touched 0.6810. While AUD could edge above 0.6810 from here, the rally appears to be tiring and the next resistance at 0.6830 is not expected to come into the picture. Support is at 0.6775 followed by 0.6760”. Next 1-3 weeks: “We have held the same view since last Monday (07 Oct, spot at 0.6760) wherein AUD is “expected to trade sideways within a 0.6705/0.6805 range”. AUD came close to the bottom of the expected range last Thursday (10 Oct) but rebounded quickly from 0.6710 and edged above the top of the expected range on Friday (high of 0.6811). While the underlying tone has improved, only a NY closing above 0.6805 would suggest AUD is ready for a sustained recovery. Until then, we continue to view the current price action as part of a 0.6705/0.6805 range. At this stage, the probability for a clear break above 0.6805 is slightly more than even but it would continue to improve as long as AUD does not move below 0.6740 within these few days. Looking ahead, if AUD were to register a NY closing above 0.6805, further strength to 0.6860 would not be surprising”.

Open interest in JPY futures markets rose for the second straight session on Friday, now by almost 6.8K contracts, noted preliminary data from CME Gro

Open interest in JPY futures markets rose for the second straight session on Friday, now by almost 6.8K contracts, noted preliminary data from CME Group. In the same line, volume increased for another day, now by around 1.4K contracts. USD/JPY needs to clear 108.50 for extra gainsUSD/JPY advanced above 108.50 on Friday but failed to close above this level. Rising open interest and volume coupled with negative price action in the Japanese safe haven should keep the upside pressure on the pair intact for the time being. That said, the next key hurdle emerges at the 200-day SMA just above 109.00 the figure.

The FT recently ran a story highlighting the fact that more than 25% of the United Kingdom (UK) government debt is being owned by foreign investors.

The Financial Times (FT) recently ran a story highlighting the fact that more than 25% of the United Kingdom (UK) government debt is being owned by foreign investors. The news report mentions that overseas fund managers snap up more than £100 billion of gilts since the EU referendum while affirming that foreign investors own roughly 28% of the gilt market, a proportion on a par with domestic pension funds and insurers that has remained fairly steady over the past decade. Key quotes“In the past, overseas investors have tended to pause their purchases when they are worried about depreciation of the UK currency, such as during the financial crisis.”“But the money flowing into the gilt market may also be a direct result of declines in the value of the pound since 2016.”“In recent years, investors at home and abroad have seen rising risks of a disruptive Brexit as a reason to buy gilts, betting that the resulting damage to the economy would force the BoE to cut interest rates or even restart its bond-buying programme.”FX implications Although the GBP/USD pair shows no reaction to the news while trading around 1.2600, this supports the market’s expectations of a recovery in the Cable.

Cable’s upside momentum risks facing a tough barrier above the 1.27 mark, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We highligh

Cable’s upside momentum risks facing a tough barrier above the 1.27 mark, suggested FX Strategists at UOB Group. Key Quotes 24-hour view: “We highlighted last Friday that “impulsive upward momentum suggests there is room for GBP to test 1.2500”. However, instead of ‘testing’ 1.2500, GBP blew past this level and rocketed to a high of 1.2708. While further GBP strength in the days ahead would not be surprising, the short-term rally is deep in overbought territory and GBP is not expected to move beyond Friday’s peak of 1.2708. In other words, a temporary top is likely in place. For today, the risk is for a pull-back even though any weakness is viewed as a lower trading range of 1.2480/1.2680 (a sustained decline is not expected)”. Next 1-3 weeks: “We held the view last Friday “the price action has clearly shifted the risk to the upside”. However, we woefully underestimated the pace of GBP’s strength as it blew past “the several strong resistance levels that are stacked close to each other” and rocketed to a high of 1.2708 before ending last Friday at 1.2650 (for a 1-week gain of +2.57%, the largest in more than 2 years). From here, GBP is likely ‘attracted’ by the June’s top of 1.2784 but severely overbought short-term conditions could lead to a couple of days of consolidation first. That said, the declining weekly trend line resistance connecting 1.4377 (Apr 2018) and 1.3380 (Mar 2019) currently sits at 1.2720 and this level may temporarily thwart the advance in GBP. All in, the risk is still for a higher GBP and only a break of 1.2380 (‘strong support’ level at 1.2300 last Friday) would indicate the current positive phase has run its course”.

Here is what you need to know on Monday, October 14: Markets are cautious regarding the US-Sino partial trade deal. The world's largest economy agreed

Here is what you need to know on Monday, October 14: Markets are cautious regarding the US-Sino partial trade deal. The world's largest economy agreed on a "hand-shake" agreement which is yet to be written. It includes a Chinese commitment to buy agrifoods. The US will refrain from slapping new tariffs scheduled for Tuesday. However, levies set for mid-December are still on the cards. The safe-haven yen is recovering some of its losses and commodity currencies are on the back foot. Brexit: Intense weekend talks have failed to result in an agreement. The UK prefers having Northern Ireland (NI) in two customs regimes while the EU prefers its original idea for keeping NI within the EU's customs union. GBP/USD is falling this morning after leaping on Thursday and on Friday. The Democratic Unionist Party (DUP) and some Brexit-supporters are wary that Prime Minister Boris Johnson conceded too much. Intense negotiations continue in Brussels ahead of the EU Summit beginning on Thursday. The UK parliament returns today with the Queen's Speech.  The Turkish lira is under fresh pressure as the Kurds invited Assad's Syrian regime. Moreover, the EU and the US are considering sanctions on Turkey's following its incursion into northern Syria. Russia is also involved in trying to calm tensions. Chinese trade figures have shown larger-than-expected drops in both exports and imports – adding to concerns about global growth. Trade with the US has fallen by double-digits. The economic calendar is light today with holidays in Japan, Canada, and the US set to result in lower trading volume. Cryptocurrencies are trading within the same ranges seen last week. Bitcoin hovers around $8,300. The Securities and Exchanges Commission (SEC) has sued Telegram for its crypto project.

Despite witnessing a downside pressure off-late, the USD/CHF pair remains well above the key supports while taking rounds to 0.9960.

USD/CHF pulls back from 0.9990, 23.6% Fibonacci retracement on the sellers’ radar.200-bar SMA, followed by rising multi-week-old rising trendline and 38.2% Fibonacci retracement, limit further declines.Despite witnessing a downside pressure off-late, the USD/CHF pair remains well above the key supports while taking rounds to 0.9960 amid pre-European open session on Monday. While 23.6% Fibonacci retracement of August–October upside, at 0.9940, seems to please short-term sellers, 200-bar Simple Moving Average (SMA) around 0.9920, will challenge bears afterward. If at all prices decline below 0.9920, 0.9890/87 area including an upward sloping trend-line since September 04 and 38.2% Fibonacci retracement will limit further downside, if not then 0.9840 and 0.9800, comprising 61.8% Fibonacci retracement, could gain market attention. On the contrary, pair’s run-up beyond 0.9990 can again aim for 1.0030 while May-end tops nearing 1.0100 could lure bulls then after. USD/CHF 4-hour chart Trend: pullback expected  

CME Group’s advanced figures for GBP futures markets noted investors scaled back their open interest positions by just 148 contracts on Friday. Despit

CME Group’s advanced figures for GBP futures markets noted investors scaled back their open interest positions by just 148 contracts on Friday. Despite it was a small drop, it was the third one in a row. On the other hand, volume increased for the second consecutive session, now by around 66.8K contracts. GBP/USD now looks to the 200-day SMA above 1.27Cable has briefly surpassed the 1.27 handle on Friday – where sits the key 200-day SMA – amidst rising volume and declining open interest. That said, while price action around the Sterling is expected to remain volatile due to Brexit developments, shrinking open interest could lead to the loss of some upside pressure in the near term.

According to flash data for EUR futures markets from CME Group, open interest extended its uptrend on Friday, this time rising by around 2.2K contract

According to flash data for EUR futures markets from CME Group, open interest extended its uptrend on Friday, this time rising by around 2.2K contracts. In the same direction, volume rose for the second session in a row, now by nearly 28.3K contracts. EUR/USD could attempt a test of 1.11 and aboveEUR/USD’s recently failed in the mid-1.10s, where sits the key 55-day SMA. Rising open interest and volume looks supportive of the continuation of the up move to, initially, another test of this area of resistance and probably a move to the 1.11 neighbourhood.

According to FX Strategists at UOB Group, a close above 1.1050 could spark a move to 1.11 and above. Key Quotes 24-hour view: “Against our expectation

According to FX Strategists at UOB Group, a close above 1.1050 could spark a move to 1.11 and above. Key Quotes 24-hour view: “Against our expectation for “sideway-trading”, EUR extended its gain to 1.1062 before easing off to close at 1.1040. Upward momentum still appears to be over-stretched and further sustained EUR strength appears unlikely, at least for today. EUR is more likely to consolidate its gains and trade sideways, likely between 1.0990 and 1.1050”. Next 1-3 weeks: “While we expected EUR to “test the strong 1.1050 resistance” last Friday (11 Oct, spot at 1.1005), we held the view that “the strong resistance may not be easy to crack”. We added, “Looking ahead, if EUR were to register a NY closing above 1.1050, further gains towards last month’s top near 1.1110 would not be surprising”. EUR subsequently rose to 1.1062 before slipping to end the day at 1.1040. Shorter-term indicators are overbought and from here, we will ‘upgrade’ the current positive call for EUR further only if it can close above 1.1050. At this stage, the odds for such a scenario are slightly higher than even. On the downside, the ‘strong support’ has edged higher to 1.0970 from 1.0955. Only a breach of the ‘strong support’ would indicate that the current upward pressure has eased”.

The Greenback, when tracked by the US Dollar Index (DXY), is attempting some consolidation in the lower end of the recent range near the 98.40/30 area

DXY continues to digest last week’s losses.US-China trade remains in centre stage after recent partial deal.US data this week includes Retail Sales and the Philly Fed index.The Greenback, when tracked by the US Dollar Index (DXY), is attempting some consolidation in the lower end of the recent range near the 98.40/30 area. US Dollar Index stays weak on better risk tone The index is looking for direction at the beginning of the week following three consecutive daily pullbacks, always under pressure in response to the improved sentiment in the risk-associated universe. In fact, the US and China reached a partial deal on Friday, motivating President Trump to suspend the tariff hike on Chinese products planned for later this month. Also adding to the better mood in the riskier assets, hopes of a Brexit deal remain on the rise following last week’s important advance in negotiations between both parties. Moving forward, this week’s US calendar includes the release of Retail Sales, the Fed’s Beige Book and the Philly Fed manufacturing index. What to look for around USD The decline in DXY appears to have found support near 98.30 so far, although the Greenback is expected to remain under pressure this week in response to the prevailing risk-on sentiment. Investors’ attention now shifted to the increasing likeliness of another insurance cut by the Fed at the next meeting and its recently announced programme to expand the balance sheet via purchases of T-bills to remove pressure from the money markets. Despite evidence that the US economy could be losing some momentum, the labour market remains strong as well as consumer spending, although the latest mixed results from the CPI appear to support the view of extra cuts by the Fed in the near future. On the broader view, the constructive outlook in DXY looks a bit damaged but it still is in play amidst a divided FOMC vs. a broad-based dovish stance from the rest of the G-10 central banks. In addition, the positive view on USD remains well sustained by its safe haven appeal and the status of ‘global reserve currency’. US Dollar Index relevant levels At the moment, the pair is gaining 0.06% at 98.39 and a breakout of 98.78 (21-day SMA) would open the door to 99.25 (high Oct.9) and then 99.67 (2019 high Oct.1). On the other hand, the next support emerges at 98.20 (monthly low Oct.11) seconded by 97.86 (monthly low Sep.13) and then 97.80 (100-day SMA).

Despite witnessing a lack of major data/events amid an off at the US, Japan, and Canadian markets, Asian equities remain upbeat.

Equities in Asia carry the optimism surrounding the US-China trade deal.Absence of the Japanese traders, a slump in Chinese imports limit market moves.India’s WPI inflation, trade news in the spotlight as the US/Canada markets are also off.Despite witnessing a lack of major data/events amid an off at the US, Japan, and Canadian markets, Asian equities remain upbeat as the MSCI’s Asian Pacific Index (ex-Japan) registers 1.2% gains ahead of the European session opening on Monday. Australia’s ASX 200 and New Zealand’s NZX 50 seesaw near 1.0% gains by the press time whereas India’s BSE Sensex and China’s HANG SENG also stand positive while writing. Asia’s share traders seem to carry optimism concerning the US-China trade deal forward after both the nations agreed for an initial deal during last week. With this, Bloomberg’s news that China denied the US diplomats’ visas for a visit to Taiwan and higher than the expected slump in China’s import/export numbers gain little attention. However, increasing odds of the United States’ (US) Federal Reserve rate cut, as ascertained through the Fed funds futures, support safe-havens like the Japanese Yen (JPY) and Gold. Moving on, investors may now look forward to India’s Wholesale Price Index (WPI) Inflation data ahead of focusing on the Eurozone Industrial Production and comments from the European Central Bank (ECB) and the Bank of England (BOE) policymakers.

Weekend headlines renewed doubts over the US-China trade deal and a soft Brexit. However, the absence of Japanese traders restricts market momentum.

Weekend headlines renewed doubts over the US-China trade deal and a soft Brexit. However, the absence of Japanese traders restricts market momentum during the early Asian session on Monday. Investors also shrugged off China’s disappointing import numbers while showing less reaction to the better than forecast trade surplus. Trade headlines seem to have taken a halt after both the leaders agree for initial peace but the news concerning China’s rejection of the United States’ (US) diplomats’ visas keep the risk of another trade war on the cards. On the other hand, the United Kingdom’s (UK) Prime Minister (PM) Boris Johnson followed the footsteps of the European policymakers who, over the weekend, said that both the sides are still far from a deal despite noticeable progress. With this, safe-havens like Gold and the Japanese Yen (JPY) stop their earlier declines while the commodity-linked currencies and the British Pound (GBP) also witness downside pressure. However, the Euro stays under pressure ahead of second-tier data/events whereas energy prices respect geopolitical tension surrounding Syria. Main Tops in Asia China September Dollar-denominated Imports drop 8.5% Goldman Sachs sees limited upside in Yuan even after a partial trade deal - Bloomberg China's Customs Spokesman: Exports to the US down 6% in Jan-Sep - Reuters BOE's Ramsden: BoE might not be able to cut rates if Brexit delayed again - The Telegraph Key Focus Ahead Having witnessed a soft start to the week, investors might have to adjust for less volatile session s ahead considering the absence of the US and Canadian traders. Though, a speech from the European Central Bank (ECB) policymaker Luis De Guindos and Eurozone Industrial Production numbers could offer intermediate trade opportunities. It should also be noted that the speech from the Bank of England’s (BOE) Sir Jon Cunliffe will also be looked after the latest comments from a policymaker raised questions on the central bank’s future performance. EUR/USD stuck below 50-day MA despite US-China trade truce EUR/USD failed to close above the 50-day moving average (MA) on Friday and is trading below the key average at press time despite the US-China trade truce. GBP/USD under pressure as Brexit optimism losing luster GBP/USD is facing selling pressure in the Asian session and may remain on the defensive in Europe on fading optimism for the Brexit deal. AUD/USD seesaws around 0.6780 after China trade data AUD/USD fails to portray a slump in China’s imports amid better than expected trade surplus. The pair takes the rounds to 0.6780 on early Monday. USD/JPY consolidating bull rally into 108 handle on US/Sino trade deal optimism USD/JPY starts out the week flat to Friday's close after markets rallied at the end of the week. The prospects of a full-on trade deal between the US and China as trade negotiations take shape in the form of a phase 1 deal between the two nations lifted USD/JPY to a fresh high, with bulls scoring a high of 108.62 having moved up from out of the 107 handle.

EUR/USD failed to close above the 50-day moving average (MA) on Friday and is trading below the key average at press time despite the US-China trade t

EUR/USD remains below 50-day MA, having faced rejection at the key hurdle on Friday. Major investment banks warn that the latest US-China trade truce may be temporary. EUR/USD failed to close above the 50-day moving average (MA) on Friday and is trading below the key average at press time despite the US-China trade truce. US President Trump on Friday announced a partial trade deal, sending the US Dollar lower across the board and risky assets higher. As a part of the deal, the US has delayed a planned increase in taxes on $250 billion in Chinese goods, while China has to buy $40 to $50 billion in US agricultural products. Even so, the trade optimism faded in Asia, keeping the EUR/USD sidelined around 1.1030 and below the 50-day MA at 1.1044, as prominent investment banks voiced concerns about the reliability of the latest trade deal. Without a durable dispute settlement mechanism in place, another round of tariff increases cannot be ruled out, Morgan Stanley analysts warned, according to CNBC. Meanwhile, Goldman Sachs said there is a 60% chance that the announced 15% tariffs will take effect, but not until early 2020 as opposed to the current deadline of Dec. 15. JP Morgan said the first phase of the deal is a positive, but the outcome is not a surprise for the market. The US Dollar, therefore, may gain ground due to "sell the rumor, buy the fact" trade. The downside, however, looks limited, as the EUR/GBP is currently flashing green amid fading Brexit optimism. The EUR/USD pair may have another go at the 50-day MA hurdle if the Eurozone Industrial Production for August, scheduled for release at 09:00 GMT, beats expectations by a big margin. The market may also take cues from the speech by the European Central Bank's (ECB) De Guindos, scheduled at 07:15 GMT. Trading volumes will likely be thin as the US trading desks are observing Columbus Day holiday. Technical levels  

Not only the absence of Japanese traders but a lack of major data/events also push the USD/INR pair traders to shrug-off Chinese data.

USD/INR seesaws near one-week lows ahead of the key inflation data.Asian traders ignore China data amid Japan/US holidays.Not only the absence of Japanese traders but a lack of major data/events also push the USD/INR pair traders to shrug-off Chinese data while declining to 70.8350 ahead of the European session on Monday. Markets in the United States (US), Japan and Canada are all closed on Monday, giving less room for any news. However, Asian traders seem to cheer last week’s trade-positive headlines while also ignoring higher than expected slump in China’s imports and exports data. The US and Chinese diplomats agreed over the first stage of the trade deal on Thursday. The same will stop increase in the US tariffs on the Chinese goods while also pushing the dragon nation for further Agricultural imports and taking steps to safeguard the intellectual property rights of the US companies. During early Monday, China’s September month imports slump more than expected on both the Chinese Yuan (CNY) and the US Dollar (USD) terms. As a result, investors showed less reaction to upbeat Trade Surplus. Moving on, India’s Wholesale Price Index (WPI) Inflation data for September will be the key to watch for the pair traders. The inflation gauge is expected to come in at 0.90% against 1.08% prior. In addition to the downbeat expectations from the WPI numbers, the Reserve Bank of India’s (RBI) dovish overview and Moody’s recent downgrade of India’s growth forecast might also weigh on the Indian Rupee (INR) during the days to come. Technical Analysis Only if the pair closes below 70.36/35 support-area, including lows marked since August 08, prices can revisit the sub-70.00 region, else a pullback towards 71.60 can’t be denied.

China Trade Balance USD above expectations ($33.3B) in September: Actual ($39.65B)

GBP/USD is facing selling pressure in the Asian session and may remain on the defensive in Europe on fading optimism for the Brexit deal. The Pound is

GBP/USD drops in Asia on fading Brexit optimism. BOE'sability to counter economic slowdown may be hampered by Brexit delay. The UK firms may be forced to cut down jobson prolonged Brexit uncertainty. GBP/USD is facing selling pressure in the Asian session and may remain on the defensive in Europe on fading optimism for the Brexit deal. The Pound is being offered, possibly in response to the comments by Britain and the European Union on Sunday that a lot more work would be needed to secure an agreement on Britain's departure from the bloc. Further, a Deloitte survey warned that Brexit uncertainty will force the UK firms to reduce hiring over the next 12 months, possibly adding to the selling pressure around the GBP. Also, the Bank of England's Ramsey told The Telegraph on Sunday that the central bank's ability to support the economy would be hampered if Brexit is delayed again. So, the probability of the British Pound facing another wave of selling in the European session is high. The dip, however, could be reversed if the Brexit-related news flow is positive. Kathy Lien from BK Asset Management sees Sterling rising to levels above 1.28 as both sides are seeing the light at the end of the tunnel three weeks ahead of the Brexit deadline of Oct. 31. The currency pair is currently trading near 1.26, representing 0.37% losses on the day, having hit a high of 1.2645 in Asia. The pair clocked a high of 1.2707 on Friday on Brexit optimism.  Technical levels  

A rise in China's trade surplus has failed to put a strong bid under the Aussie Dollar, leaving the AUD/JPY pair largely unchanged on the day at 73.50

AUD/JPY is trading largely unchanged on the day despite the rise in China's Trade Surplus. The AUD is struggling to pick up a bid amid the rise in China's offshore Yuan exchange rate. A rise in China's Trade Surplus has failed to put a strong bid under the Aussie Dollar, leaving the AUD/JPY pair largely unchanged on the day at 73.50. China's Imports tanked 8.5% year-on-year in September and Exports or outbound shipments fell by 3.2% year-on-year, pushing the Trade Surplus higher to $39.65 billion compared with a $34.84 billion surplus in August. Analysts had forecast $33.3 billion. In Yuan terms, the Trade Surplus rose to CNY 280 billion. The uptick in the Trade Surplus is boding well for the offshore Yuan (CNH). The USD/CNH pair is now trading at 7.0577, the lowest level since Sept. 16, having dropped from 7.08 in the last hour or so. So far, however, the AUD has not been able to benefit from China data and the rise in the CNH, possibly because the uptick in the Trade Surplus was due to a sharp drop in imports – a sign of weakening domestic demand conditions. Also, markets are worried that the latest US-China trade truce (reached on Friday) lacks proper dispute settlement mechanism and could fall apart, leading to further escalation of trade tensions. That could be capping the upside in the AUD/JPY pair. That said, the futures on the S&P 500 are now reporting a 0.21% gain. Hence, AUD/JPY may explore the upside in the European session. Technical levels    

With a slump in China’s September month imports taking over trade surplus, NZD/USD extends early-day pullback to 0.6300 amid Monday’s Asian session.

NZD/USD drops to a nine-day-old rising trendline after China trade balance data.RBNZ’s Bond purchases, uncertainty surrounding the US-China trade deal also weigh on the Kiwi pair.With a slump in China’s September month imports taking over trade surplus, NZD/USD extends early-day pullback to 0.6300 amid Monday’s Asian session. China’s US Dollar (USD) denominated trade figures follow the Chinese Yuan (CNY) numbers while posting an 8.5% YoY drop in Imports versus -5.2% expected and -5.6% prior. As a result, investors shrug off better than forecast $33.30B Trade Balance to $36.65B while also respecting -3.2% Exports against -3.0% forecast and -1.0% previous readouts. Read: China September Dollar-denominated imports drop 8.5% Adding to the downside momentum is recent news that the Reserve Bank of New Zealand (RBNZ) initiates bond purchases while China’s rejection of the US diplomat’s visa adds to the fears of another US-China trade war and also weighs on the sentiment. Following the trade-positive announcement on Thursday, Antipodeans have been on the recovery mode. However, weekend headlines raised questions about optimism and hence prices recently witness a pullback supported by the data from the key customer. Investors will now look forward to fresh trade headlines as no major data/event is left for publishing while the United States (US) markets are off for Columbus Day Holiday. Technical Analysis Sustained trading below short-term rising trendline, at 0.6300, could recall 0.6276/70 support-zone including lows marked on September 03, October 10 and also comprising October-start highs. Alternatively, pair’s successful rise above 50-day Exponential Moving Average (EMA) level of 0.6373 can propel prices towards 0.6400.

China's Imports in US Dollar terms tanked in September, pushing the Trade Surplus higher. The inbound shipments fell 8.5% year-on-year in September ve

China's Imports in US Dollar terms tanked in September, pushing the Trade Surplus higher.  The inbound shipments fell 8.5% year-on-year in September versus Reuters estimate of a 5.2% drop. Meanwhile, Exports or outbound shipments dropped by 3.2% year-on-year, also beating the expected drop of 3%.  As a result, the trade surplus widened to $39.65 billion, beating the forecast of $33.3 billion.  Again, the slide in imports underlines the weakening of domestic demand conditions at a time when the world's second-largest economy is feeling the heat of the slowdown in the external sector (due to trade tensions). 
 

China Trade Balance CNY up to 275.15B in September from previous 239.6B

China Imports (YoY) came in at -8.5%, below expectations (-5.2%) in September

China Exports (YoY) registered at -3.2%, below expectations (-3%) in September

China Trade Balance USD above expectations ($33.3B) in September: Actual ($36.65B)

Goldman Sachs says the offshore Yuan (CNH) is unlikely to strengthen much further in the absence of a broader trade deal that rolls back existing tari

Goldman Sachs says the offshore Yuan (CNH) is unlikely to strengthen much further in the absence of a broader trade deal that rolls back existing tariffs. As a part of the partial deal announced on Friday, the US has only agreed to delay the levy on $250 billion of Chinese goods from the current 25% to 30%. The tariff hike was scheduled to take effect on Oct. 15.  Goldman still expects CNH to weaken to 7.20 per US Dollar in three and six months, before recovering to 7.10 in 12 months.  Key points Short-lived pauses in trade tensions have in the past given way to renewed escalation rather than a roll-back of the trade war.  If anything, disagreements have spread to more dimensions- technology, financial flows, immigration, foreign policy- such that finding ramps to de-escalate is even harder.
   

In a reaction to mixed trade data from China, the AUD/USD pair takes the rounds to 0.6780 on early Monday.

AUD/USD traders struggle to justify the increase in trade surplus amid a big drop in imports.The US-China trade developments seem the key as the US markets are off today.In a reaction to mixed trade data from China, the AUD/USD pair takes the rounds to 0.6780 on early Monday. China’s trade numbers in the Chinese Yuan (CNY) terms showed that Trade Surplus expanded to CNY 280 billion in September from 239.6 billion flashed in August. Further details on the same format mention Exports declining -0.7% versus +2.6% prior while Imports plunging -6.2% against -2.6% earlier. Read: China's Trade Surplus widened in September on big drop in Imports The Aussie traders fail to get a clear view of the Chinese trade situation while the overall sentiment remains upbeat considering the US-China trade deal. The latest developments surrounding the trade deal signal a tough road ahead for the US-China trade negotiators as no actual agreements have been signed that could have reversed the actions undertaken during the trade war. It should also be noted that China’s recent rejection of the United States (US) diplomat’s visa might turn the Trump administration against the dragon nation during the second round of talks. Investors may now await fresh clues concerning the trade deal after stage one is cleared. Technical Analysis Failure to rise above 50-day Exponential Moving Average (EMA), at 0.6800 now, highlights the importance of 0.6770, 0.6730 and 0.6700 supports.  

China's Exports or outbound to shipments fell by 6% year-on-year in the January to September period, China's Customs Spokesman said on Monday, accordi

China's Exports or outbound to shipments fell by 6% year-on-year in the January to September period, China's Customs Spokesman said on Monday, according to Reuters.  Key quotes Stable domestic growth provided strong cushion for China to counter its external challenges.
Trade development in future still complicated and severe.
Full-year trade will maintain the trend of being overall stable.
China exports to US Down -6% y/y in Jan-sept, imports from US -22.5% in yuan terms.
China's exports to US -10.7% in USD terms during Jan-sept.
Trade frictions with the US Brought some pressure to china's trade.
Jan-sept imports from the US down -26.4% y/y in USD terms.
Latest China-US trade talks had a favourable outcome in some areas.
China and US Talked about future consultation plans and agreed to work on reaching a final deal.
Believes this will be conducive to the expansion of China-US trade.

China Exports (YoY) CNY down to -0.7% in September from previous 2.6%

China Trade Balance CNY: 280B (September) vs 239.6B

China's exports unexpectedly dropped in September, but even so, its trade surplus expanded, as imports tanked more-than-expected. China's exports or o

China's Exports unexpectedly dropped in September, but even so, its Trade Surplus expanded, as imports tanked more-than-expected.  China's Exports or outbound shipments in the Yuan terms fell by 0.7% year-on-year in September, the official data released a few minutes before press time showed.  The outbound shipments were forecasted to rise by 1.5%. The Exports had risen by 2.6% in the preceding month.  Meanwhile, Imports or inbound shipments tanked by 6.2% year-on-year in September. The market was expecting a 2.3% drop following August's 2.6% slide.  Hence, Trade Surplus expanded to CNY 280 billion in September from August's 239.6 billion.  The slide in Imports indicates a weakening of domestic demand conditions. As a result, fears of a deeper economic slowdown may resurface, leading to risk aversion in the global markets. 

China Trade Balance CNY down to 205B in September from previous 239.6B

China Exports (YoY) above forecasts (-3%) in September: Actual (-0.7%)

EUR/JPY is flashing red at press time, despite the US-China trade truce. The currency pair is currently trading at 119.35, representing marginal losse

EUR/JPY is reporting marginal losses, having faced rejection at a key hurdle on Friday. President Trump's latest trade agreement lacks a durable dispute settlement mechanism and could fall apart. EUR/JPY is flashing red at press time, despite the US-China trade truce. The currency pair is currently trading at 119.35, representing marginal losses on the day, having faced rejection at the resistance of Sept. 13's high of 120.01 on Friday. The key resistance came into play on Friday after President Trump announced a “substantial phase one" of a trade deal. As per the reports released over the weekend, the US has delayed a planned increase of 25 to 30% in taxes on $250 billion in Chinese goods, while China has to buy $40 to $50 billion in US agricultural products. Even so, optimism has faded in Asia. At press time, the futures on the S&P 500 are flatlined and the anti-risk Japanese Yen is mildly bid. The drop in demand for riskier assets could be due to Chinese State Media's reluctance to indicate that any trade deal with the US has been made. Also, the markets are worried that President Trump’s partial trade deal with China is an “uncertain” arrangement at best and could fall apart, paving the way for another round of tariff increase. Goldman Sachs sees a 60% chance that the announced 15% tariff hike will take effect, but expects a delay until early 2020 as opposed to the current deadline of Dec. 15, according to CNBC. Therefore, the EUR/JPY pair may remain under pressure during the day ahead. The bid tone around the Japanese Yen may further strengthen if China's trade data, due on Monday, prints below estimates, bolstering fears of a deeper economic slowdown in the world's second-largest economy. Technical levels  

Based on the positioning data for the week ending October 8, 2019, ANZ conveyed that the leveraged funds and asset managers took opposite positions.

Based on the positioning data for the week ending October 8, 2019, the Australia and New Zealand Bank (ANZ) conveyed that the leveraged funds and asset managers took opposite positions on various currencies. Key quotes“While the former (leveraged funds) bought for the third straight week, the latter (asset managers) turned sellers. Apart from some weakness in US data which has dampened USD, of more importance is the conclusion of a partial US-China trade deal which will likely boost risk sentiment and keep the USD weak in the near term.”“Funds sold EUR, while asset managers bought. Both, however, were net GBP buyers. Renewed hopes of the UK securing a Brexit deal in time could provide further support to GBP. On JPY and CHF, while funds pared their exposure, money managers ramped it up.”“On commodity currencies, funds bought CAD while asset managers sold. They also acted in opposition directions in AUD and NZD. Funds were net sellers in both while money managers were net buyers. In EMFX, funds were combined net buyers, while the asset managers were sellers due to positioning changes in RUB alone.”

NZD/JPY has started out the week on the back foot, falling from a high of 68.72 to a low of 68.22, -0.66%. The cross is suffering on what is potential

NZD/JPY profit-taking ensures at the start of a busy event week. Less committed risk-takers prefer to wait and see how the trade deal unfolds.NZD/JPY has started out the week on the back foot, falling from a high of 68.72 to a low of 68.22, -0.66%. The cross is suffering on what is potential profit-taking and a dial back in optimism surrounding the 'phase-1' trade agreement between the US and China within illiquid markets while Japan and the U.S. are out on holiday.  The Chinese press has somewhat invalidated the trade agreement between the US and China by highlighting that only a 'partial deal' has yet to be inked, thus leaving the door open for scrutiny and prying the implications of a possible reneging from either side on aspects of the agreement.  The Yen, which underperformed in last week's close following the optimism surrounding the trade talks can make some ground back on profit-taking while the less committed risk-takers prefer to wait and see how the deal unfolds from here on. A packed week with key Chinese and New Zealand data For the week ahead will be busy for the commodity complex given the number of key scheduled calendar events which will role it throughout the week, including Chinese economic data, such as the Trade Balance,  Industrial Production and Gross Domestic Product. Domestically, New Zealand's Consumer Price index will also be critical.  "We expect headline CPI rose 0.6% q/q in Q3, a touch below the RBNZ +0.5% q/q f/c," analysts at TD Securities explained - Their forecast puts annual inflation at 1.4%, at the lower end of the Bank’s 1-3% target band. "While annual tradeable inflation is expected to be negative on offshore leads, domestic inflation is expected to bounce to 3% y/y on rising food/housing price pressures to 5yr highs. Upside risk to our f/c." Meanwhile, the market pricing for RBNZ is for 28bp of easing on 13 November, according to analysts at Westpac, with a terminal rate of 0.48%. NZD/JPY levels  

In its weekly overview, the Westpac bank anticipates the Australian Dollar (AUD) to remain low against the US Dollar (USD).

In its weekly overview, the Westpac bank anticipates the Australian Dollar (AUD) to remain low against the US Dollar (USD) while forecasting one more rate cut of 0.25% from the Reserve Bank of Australia (RBA) in December. The reasons cited for the lack of AUD/USD upside include trade/political uncertainty and the market’s expectations concerning the future performance of the United States (US) and Australian central banks. Key quotes“The Reserve Bank delivered the October rate cut from 1% to 0.75% which had been one of our core forecasts since July. We are confirming our call for a further cut to 0.5% in February next year.”“We acknowledge that there are risks that this move may come as early as December but dismiss the probability of a move as soon as November despite confident (50%) market pricing.”“However we are encouraged that Chairman Powell puts a high weighting on extending the growth cycle for as long as possible. The target of core PCE (the FOMC’s preferred measure of inflation due to it containing the most information about forward prospects for inflation) is to be symmetrical around 2%. There is still much work to be done for that target to be achieved.”“So, going forward, we are expecting one more cut in Australia and four more cuts in the federal funds rate. That implies “terminal” rates in this cycle of 0.5% in Australia and 0.875% in the US.”“While we are expecting a narrowing of yield differentials between the federal funds rate and the RBA cash rate of 75bps, markets are already expecting a narrowing of around 50bps.”

Despite witnessing a pullback from 61.8% Fibonacci retracement of late-August to September declines, the EUR/USD pair stays inside a short-term rising channel.

EUR/USD pulls back from 61.8% Fibonacci retracement.Sellers look for entry below 1.0980 comprising channel’s support.Despite witnessing a pullback from 61.8% Fibonacci retracement of late-August to September month declines, the EUR/USD pair stays inside a short-term rising channel as it trades near 1.1027 during early Monday. While horizontal support including early-month highs and Friday’s low, around 1.1000, can please intra-day sellers, pair’s further declines need to slip beneath support-line of the two-week-old rising channel, at 1.0980, in order lure bears targeting 1.0950 and 1.0900 rest-points. Alternatively, pair’s upside clearance of 61.8% Fibonacci retracement, close to 1.1055, may find it hard to cross channel’s resistance-line at 1.1070 now. If at all bulls manage to conquer 1.1070, last month’s high near 1.1110 and August 25 top surrounding 1.1165 could become their favorites. EUR/USD 4-hour chart Trend: pullback expected  

The People's Bank of China (PBOC) has set the Yuan reference rate at 7.0725 vs Friday's fix at 7.0727.

The People's Bank of China (PBOC) has set the Yuan reference rate at 7.0725 vs Friday's fix at 7.0727.

The Bank of England's (BOE) ability to support the economy will be hampered if Brexit is delayed again, BOE's Deputy Governor Dave Ramsden said in an

The Bank of England's (BOE) ability to support the economy will be hampered if Brexit is delayed again, BOE's Deputy Governor Dave Ramsden said in an interview with The Telegraph newspaper.  Key quotes (Source: Reuters) Britain’s economy had been so damaged by uncertainty about Brexit - chiefly via a steady fall in investment by companies - that it could hamper the BoE’s ability to help it. I see less of a case for a more accommodative monetary position if the deadline for leaving the European Union is pushed back beyond Oct. 31.  Ramsden is cautious about the economy’s growth potential due to Britain’s poor record on productivity which contracted at the fastest annual pace in five years in the second quarter. The global trade war is weighing on firms’ willingness to invest around the world too.

While global financial markets cheer upbeat developments surrounding the US-China trade deal, ING came out with a warning note.

While global financial markets cheer upbeat developments surrounding the US-China trade deal, ING came out with a warning note considering the hidden points that may offer a tough road ahead to the US-China trade negotiators to cut the deal. Key quotes“Although it is positive that de-escalation is taking place, only the commitment by China to import an additional US$40bn to US$50bn of American agricultural products is a tangible result of this round of negotiations.”“For now there is no agreement on forced technology transfers of Western companies to Chinese partners in joint ventures. Neither is there an agreement on how to stop the alleged theft of intellectual property.”“On tariffs, the negotiation result is disappointing. All recent tariff hikes remain in place. Only the announced 5 percentage point hike on US$250bn of annual US imports from China, planned for this Tuesday, is taken out. Not even the announced 15 percentage point hike in December is rolled back.”“For now, this mini-deal leaves a lot of uncertainy in place. So it is not likely that this takes out all the trade war uncertainty that has been plaguing business sentiment and currently depresses production and investment in manufacturing around the world.”

AUD/NZD started out on the front-foot this week, rising over 0.30% from a low of 1.0713 to a high of 1.0740, scoring its highest levels since the 1st

AUD/NZD moves in on the highest levels for the month on a big week for the cross. A less negative geopolitical backdrop lifting the commodity-complex. AUD/NZD started out on the front-foot this week, rising over 0.30% from a low of 1.0713 to a high of 1.0740, scoring its highest levels since the 1st October. The commodity complex got a boost into the close following news of a 'phase-1' trade deal broke. Both the Kiwi and Aussie popped with AUD marking the highest levels since 19th September on the optimism. Details of the deal are yet to be announced and there has been a slight contraction in price action within the related asset classes - US stocks, for instance, pulled back from their session highs into the close as investors hold their horses awaiting the nitty-gritty of the deal.  At the conclusion of talks in Washington DC on Friday, US and Chinese officials said a partial trade deal had been agreed, with further talks set for November, analysts at Westpac explained."Details are yet to be revealed but the key elements appear to be China’s commitment to substantial increases in imports of US agricultural products and some sort of pledges on intellectual property and currency policy, while the US says it will not proceed with the tariff increase (25% to 30% on $250bn of imports) that was set to take effect tomorrow." A big week ahead Meanwhile, its a relatively big week for the cross with a number of scheduled events to potential shake things up, with the likes of Reserve Bank of Australia minutes, RBA Deputy Governor Debelle speaking, Australia employment data, New Zealand Consumer Price Index and the Chinese Gross Domestic Product and Industrial Production. We also have the Chinese September trade data which will be watched closely - "Consensus is for US$ exports to soften to about -3%yr, imports -6%, leaving the trade surplus little changed, around $35bn," analysts at Westpac explained.  AUD/NZD levels  

In its latest research reports, Danske Bank came out with an upbeat analysis of Brexit developments while conveying the increased odds of a Brexit deal.

In its latest research reports, Danske Bank came out with an upbeat analysis of Brexit developments while conveying the increased odds of a Brexit deal. However, their base case expectations of another Brexit extension followed by a snap election remains on their radar. Key quotes“Recent days have been positive for the Brexit negotiations and hence we have increased the likelihood of a deal to 20% (from below 10% previously).”“However, the pathway is still full with obstacles. First of all time is very limited. Also, the rest of the EU system is less upbeat than the Irish and think a lot of work still has to be done.”“Even if the UK and EU27 agree on a deal, PM Johnson may not have support in Parliament.”“Our base case remains another Brexit extension into 2020 followed by a snap election, but the probability has declined to 70% from 85% previously.”“We think the likelihood of a no deal Brexit by 31 October is very slim (5%) due to the Brexit Delay Bill, which seems extremely watertight.”

A Deloitte survey shows prolonged political uncertainty in Britain and concerns about weak domestic and external demand are forcing finance directors

A Deloitte survey shows prolonged political uncertainty in Britain and concerns about weak domestic and external demand are forcing finance directors to cut costs and hold off hiring to help the UK firms prepare for an unpredictable year ahead, according to a euronews report.  The audit of 91 chief financial officers of some of Britain’s largest companies showed cost control will be a priority for six in 10 of the respondents over the next year. Meanwhile, seven in 10 of the CFOs expect hiring to drop in the next 12 months. Key quotes by Ian Stewart, Chief Economist at Deloitte Perceptions of uncertainty are elevated and corporate risk appetite is vanishingly low. The priority appears to be curbing costs, not expansion. With Brexit cited as the biggest risk businesses face, the last quarter has also seen heightened concern over slowing growth in the UK and Eurozone and CFOs are tightening their purse strings in response.
 

USD/IDR falls short of extending Friday’s pullback as it trades near 14,130 during the early Asian session on Monday.

USD/IDR fails to hold on to recovery gains amid bearish MACD.23.6% Fibonacci retracement becomes nearby support to watch unless the pair trades below 14,143/50 resistance-zone.USD/IDR falls short of extending Friday’s pullback as it trades near 14,130 during the early Asian session on Monday. With the bearish signal from 12-bar Moving Average Convergence and Divergence (MACD), the pair is likely to decline further towards 14,048/38 support area including 23.6% Fibonacci retracement of August-September downpour and September 20 low. During the pair’s further weakness below 14,038, 14,000 and September month low nearing 13,880 could lure sellers. Meanwhile, pair’s successful break above 14,143/50 resistance-region comprising 38.2% Fibonacci retracement and 21-day Simple Moving Average (SMA) could trigger fresh run-up to 50% Fibonacci retracement level of 14,233 whereas a falling trend line since late-August, at 14,245, might challenge bulls afterward. USD/IDR daily chart Trend: bearish  

The USD/CNH pair has tested key support a few minutes amid the Sino-US trade optimism. The currency pair is currently trading around 7.0841, having dr

USD/CNH has tested the head-and-shoulders neckline support of 7.0735. A close below that level would confirm a breakdown and a bullish-to-bearish trend change.   The USD/CNH pair has tested key support a few minutes amid the Sino-US trade optimism. The currency pair is currently trading around 7.0841, having dropped to 7.0735 – the neckline of the daily chart head-and-shoulders pattern – soon before press time. The bid tone around the offshore Chinese Yuan (CNH) strengthened in early Asia on a "Phase 1 Deal" between the US and China. With the partial deal, President Trump has delayed the planned Oct. 15 tariff hike.  That said, whether the tariffs in December will be pushed off as well. As of now, however, the Yuan is mildly bid on the partial US-China trade deal. A daily close below 7.0735 would confirm a head-and-shoulders breakdown and open the doors for 6.95 (target as per the measured move method). On the way lower, the pair may find support at 7.03 (Sept. 13 low). A bounce from the neckline and a break above the 50-day moving average, currently at 7.1075, would weaken the bearish prospects. Daily chartTrend: Bearish below 7.0365 Technical levels  

Weekend headlines concerning the Brexit developments seem to weigh on the GBP/JPY pair’s run-up to highest levels since early-June.

Brexit uncertainty questions the GBP/JPY pair’s surge to a multi-month high.UK-EU officials accept that a lot of work needs to be done to get a Brexit deal.Holiday in Japan, the absence of the UK data highlight Brexit headlines as a key catalyst.Weekend headlines concerning the Brexit developments seem to weigh on the GBP/JPY pair’s run-up to highest levels since early-June as the pair pulls back to 136.85 by the press time of Asian morning on Monday. Not only the United Kingdom’s (UK) Prime Minister Boris Johnson but the European Union’s (EU) executive also conveyed over the weekend that there remains a long way to go for a successful Brexit deal. Adding to the uncertainty were downbeat comments from the Democratic Unionist Party (DUP) leader Nigel Dodds. However, the EU’s readiness to allow bunker talks and a lack of resistance from Ireland are likely forces that limit the pair’s declines. The Telegraph recently ran a story highlighting the EU’s push for more concessions despite the UK’s warnings that the deal won’t pass through the Parliament in that case. Risk-tone cheer US-China trade deal after nearly two years of the tussle that challenged global markets. While on-going Brexit talks between the EU and the UK officials will keep directing the GBP/JPY pair’s near-term moves, the absence of Japanese players and a lack of the UK data could restrict pair’s momentum. Technical Analysis The pair needs to close beyond the 200-day Exponential Moving Average (EMA) level of 137.30 in order to question June month high nearing 138.35, failure to do so can fetch the quote back to 135.75/65 area including highs marked on July 25 and September 20.

Singapore Gross Domestic Product (YoY) came in at 0.1%, below expectations (0.2%) in 3Q

Singapore Gross Domestic Product (QoQ) registered at 0.6%, below expectations (1.5%) in 3Q

West Texas Intermediate crude prices are firm in the open having penetrated the 21-day moving average following a solid performance at the endo f last

Bulls penetrate the 21-day moving average on tensions in the middles east and phase 1 trade deal between US and China. A break of 55.60 will open the prospects of a run towards the 200-DMA located in the 57 handle.West Texas Intermediate crude prices are firm in the open having penetrated the 21-day moving average following a solid performance at the endo f last week as risk appetite picks up due to the phase 1 trade agreement between the US and China. WTI spot prices climbed 1.76% by the close of play, having rallied from a low of $53.62 to a high of $54.91, tomark-up a weekly gain of nearly 4%. The news of an explosion on an Iranian tanker also propped up prices as tensions in the Middle East encouraged a spike in the value of oil. Subsequently, WTI for November delivery added $1.15, or 2.2%, to settle at $54.70 at a two-week high - The contract ending 3.6% higher for the week. Tensions in the region are at a boil "While tensions in the region are at a boil, markets have discounted little geopolitical risk premium as the perception that the world will soon be flooded with oil is removing any urgency to load up on inventories," analysts at TD Securities explained, noting that the downside momentum signals are still strengthening in crude, with 89% of momentum signals now pointing short while only a 10% of technical analysis signals are suggesting that we are oversold. WTI levels A break into the 55 handle and a subsequent test of 50 DMA at 55.60 will open the prospects of a run towards the 200-DMA located in the 57 handle and the confluence of the 50% Fibonacci retracement of the 16th Sep to 3rd Oct lows. On the downside, the Nov 2018 lows at 49.39 are guarding the 46.90 level ahead of the 18th Dec lows down at 45.77 and the Dec double bottom lows below 42.50 on the wide. 

Following its downside break of near-term key support line, USD/CAD declines to 1.3197during early Asian session on Monday.

USD/CAD remains under pressure below key support-turned-resistance.The 23.6% Fibonacci retracement, September low become likely nearby supports to watch.Following its downside break of near-term key support line, USD/CAD declines to 1.3197during early Asian session on Monday. The pair now aims to visit 23.6% Fibonacci retracement level of May-July south-run, at 1.3145 whereas September month low close to 1.3130 could please sellers afterward. It should, however, be noted that the 14-bar Relative Strength Index (RSI) might drop to oversold territory during further declines and could lure counter-trend traders around 1.3130. On the contrary, pair’s daily closing beyond support-turned-resistance, at 1.3215 now, can trigger fresh pullback to 100-day Simple Moving Average (SMA) level near 1.3240. However, 50% Fibonacci retracement and 200-day SMA becomes a tough barrier around 1.3285/90 for buyers to confront, which if broken could escalate the recovery to monthly tops surrounding 1.3350. USD/CAD daily chart Trend: bearish  

Overcoming the 6-month downtrend at 118.77 and rising from 116.58/115.87 recent lows, EUR/JPY rallied to the September highs which meet the July lows,

Bearish momentum stalling following a break of trend-line support.Bears can target 115.87 ahead of the 2017 low at 114.86.Overcoming the 6-month downtrend at 118.77 and rising from 116.58/115.87 recent lows, EUR/JPY rallied to the September highs which meet the July lows, reinforcing the upside resistance at this juncture.  Overall, the price is submerged below bearish moving averages within a descending channel although remains below trendline support. However, an upside extension beyond the 200-day moving average at 122.50 will look for a test of the 38.2% Fibonacci in the 124 handle on the wide. On the downside, bears can target 115.87 ahead of the 2017 low at 114.86. EUR/JPY daily chart    

With the US and China near to end the two-year-old trade tussle, Gold bears give little importance to doubts over soft Brexit and tension surrounding Syria.

Gold stays below 50-day EMA amid trade positive sentiment.Sellers ignore uncertainties surrounding Brexit and geopolitical tension in Syria.With the US and China near to end the two-year-old trade tussle, Gold bears give little importance to doubts over soft Brexit and tension surrounding Syria while flashing $1,484.70 as a quote during Monday’s Asian session. The yellow metal recently witnessed downside pressure after the United States (US) and Chinese diplomats agreed over the first part of the trade deal on late-Thursday. The same propelled bond yields and equities to multi-week highs while cutting down on markets’ safe-haven demand. Adding to the trade optimism is a recent tweet from US President Donald Trump who confirmed no hike in the US trade tariff, from 25% to 30%, on Chinese goods that was supposed to get active from October 15. With this, gold traders gave little importance to questions surrounding the United Kingdom’s (UK) exit from the European Union (EU) and geopolitical problems concerning Syria after Turkey’s offensive in the region. It should also be noted that the recent weakness in the US Dollar (USD) also fails to restore confidence of the precious metal buyers. While trade/political headlines will keep directing near-term moves of the Bullion, holidays in Japan, the US and Canada might restrict the market’s reaction to any fresh news. Technical Analysis Unless breaking a downward-sloping trend-line since September 04, at $1,513 now, prices are less likely to aim for $1,535 and $1,558 resistances, which in turn highlights the importance of an area between monthly bottom near to $1,455.50 and July month high around $1,452.70.

Despite taking a U-turn from resistance-turned-support, the AUD/JPY pair is yet to clear near-term key resistance-confluence.

AUD/JPY bounces off a multi-week long falling trendline.100-day SMA, 61.8% Fibonacci retracement question buyers amid bullish MACD.Despite taking a U-turn from resistance-turned-support, the AUD/JPY pair is yet to clear near-term key resistance-confluence as it takes the bids to 73.70 during early Monday morning in Asia. The pair respects bullish signal of 12-bar Moving Average Convergence and Divergence (MACD) while bouncing off a downward-sloping trend-line since late-July. However, bulls need a confirmation as 73.83/88 resistance area, comprising 100-day Simple Moving Average (SMA) and 61.8% Fibonacci retracement of July-August downpour, remains untouched. Should prices rally beyond 73.88 on a daily closing basis, September month high near 74.50 becomes buyers’ favorite whereas early-July lows close to 75.10/20 could question further upside. Alternatively, pair’s declines below the resistance-turned-support line of 73.58 highlight 50% Fibonacci retracement level of 73.13 as following rest. In a case where the pullback lasts longer below 73.13, 72.50 and monthly bottoms around 71.70 could lure bears. AUD/JPY daily chart Trend: pullback expected    

USD/JPY starts out the week flat to Friday's close after markets rallied at the end of the week. The prospects of a full-on trade deal between the US

Bullish geopolitical undertones in the form of a U/Sino 'phae 1' trade deal help lift USD/JPY onto the 108 handle. Key data in the week could throw cold water on positive trade sentiment. USD/JPY starts out the week flat to Friday's close after markets rallied at the end of the week. The prospects of a full-on trade deal between the US and China as trade negotiations take shape in the form of a phase 1 deal between the two nations lifted USD/JPY to a fresh high, with bulls scoring a high of 108.62 having moved up from out of the 107 handle. Following the positive geopolitical headlines, U.S. stocks moved higher and the Dow Jones Industrial Average climbed over 500 points making for a 0.9% rise on the week. The up-beat tones were weighing on the Yen which fell to its lowest level against the US Dollar since 1st August as safe havens underperformed. Details of US/Sino trade deal yet to be revealed  A partial trade deal had been agreed and announced into the close on Friday, with further talks set for November:  "Details are yet to be revealed but the key elements appear to be China’s commitment to substantial increases in imports of US agricultural products and some sort of pledges on intellectual property and currency policy, while the US says it will not proceed with the tariff increase (25% to 30% on $250bn of imports) that was set to take effect tomorrow," analysts at Westpac explained.  As traders await the details of the phase 1 trade agreement, there will also be a keen focus on US Retail Sales and Chinese trade data as potential catalysts for the pair - Another weak trade report from China could be a reminder of the damage already done to the global economy with respect to trade wars while a miss in US Retail Sales will firm prospects of a Federal Reserve rate cut later this month. "Markets are pricing 16bp of easing at the 31 October meeting and a terminal rate of 1.24% (vs 1.88% currently)," analysts at Westpac explained.  USD/JPY levels  

With the trade positive sentiment confronting the RBA’s dovish outlook, AUD/USD search for fresh catalysts to extend its recent rally.

AUD/USD nears multi-day high amid trade positive headlines.The dovish sentiment at the RBA challenges buyers.China’s trade balance, fresh clues surrounding the US-China trade deal, will be in the spotlight.With the trade positive sentiment confronting the RBA’s dovish outlook, AUD/USD search for fresh catalysts to extend its recent rally while taking rounds to 0.6796 amid initial Asian trading session on Monday. The US and China struck an initial trade agreement during the later part of the last week which requires China to import more agricultural products from the United States (US) while also taking steps to ensure the safety of the US intellectual property rights. The US President, in return, will stay away from further tariff increase, which was scheduled to take effect from October 15. Recent ambiguities surrounding the US tariff increase is now out with the US President’s tweet confirming no such rise in the levies that were to step-up from 25% to 30% from Tuesday. However, dovish sentiment surrounding the Reserve Bank of Australia’s (RBA) next action seems weighing on the Aussie. Major market consensus favor one more rate cut of 0.25% by the Australian central bank during the year 2019 while considering downbeat fundamentals and recent signals from the policymakers. With this, the US 10-year Treasury yields stay mostly near late-September tops with the equity future also indicating positive signals. Investors now await China’s September month trade data for fresh clues amid a lack of major data at home and the US holiday. Market consensus favors a downbeat Trade Balance figure of $33.30B versus $34.83B (revised) with an expected recovery in Imports to -5.2% from -5.6% confronting the likely downbeat Exports growth of -3% compared to -1% prior. Technical Analysis The quote needs a successful break above the 50-day exponential moving average (EMA), at 0.6800 now, in order to aim for 0.6850/55 and September month high near 0.6900. Failure to do so can drag the pair back to early-month highs close to 0.6770 prior to flashing 0.6730 and 0.6700 on the sellers’ radar.

GBP/USD is a touch softer in the open on Monday, starting off the week in the consolidation of Friday's upside extension to the highest levels since m

GBP/USD a touch softer in the open with weekend Brexit headlines capping the pair's advance. US and China trade talks have gained some traction in a phase 1 deal.GBP/USD is a touch softer in the open on Monday, starting off the week in the consolidation of Friday's upside extension to the highest levels since mid-summer. Cable is trading at 1.2635 and EUR/GBP trades at the lowest levels since May at 0.8726 at the time of writing. Brexit continues to dominate and the last few sessions have seen some positive headway towards a deal as the clock ticks down into the eleventh hour.  The GBP sailed as markets remained optimistic on the prospects of a deal being agreed on by the UK and EU, although the weekend headlines remind us that the road to a ‘soft’ Brexit remains long, with the European Commission today saying that there is a lot of work that remains to be done  - PM Johnson echoed the same as he continues to steer the UK towards leaving on the 31st of this month. Talks will continue today as the clocks tick down to the EU summit with European Union negotiators warning that the PM's plans are still not yet good enough to be the basis for an agreement. Trade talks between the US and China finding traction Elsewhere, the focus has been on trade talks between the US and China. The nations completed 'phase one' of a bigger trade deal on Friday, with subsequent announcements rolling in just ahead of the Wall Street close supporting a risk-on finish to the week.  However, Chinese media have warned not to be 'overly optimistic' about the prospects for future negotiations and considering the significant hurdles for which will need to be overcome should a more comprehensive deal finally be agreed.  Heads turn to UK jobs data this week Looking ahead, US retail sales will come into focus as well as UK Labout market data. "August may see one of the final gasps of strength for the labour market, as we look for the u-rate to fall to a new multi-decade low of 3.7%. However, we do look for the strength in job growth to slow in the coming months; the one consistent message from all three UK PMIs for September was that employment has started contracting across all sectors of the economy," analysts at TD Securities explained.  GBP/USD levelsValeria Bednarik, the Chief analyst at FXStret, argued that the GBP/USD pair is firmly bullish with the price being well above its 20 and 100 DMA, while technical indicators maintain their bullish slopes, heading north pretty much vertically. "Shorter-term, and according to the 4 hours chart, technical indicators have lost bullish strength but remains at extreme overbought levels, as the pair settled over 300 pips above all of its moving averages, all of which reflects the strength of bulls."  

The partial trade deal between the US and China and weaker US Dollar (USD), mainly due to the broad risk-on sentiment, please the NZD/USD buyers.

NZD/USD benefits from trade-positive headlines concerning the US-China deal.Greenback weakness, on the back of broader risk-on, adds to the pair’s strength.China’s Trade Balance can offer immediate direction, US markets off for Columbus Day.The partial trade deal between the US and China and weaker US Dollar (USD), mainly due to the broad risk-on sentiment, please the NZD/USD buyers as the pair takes the bids to 0.6335 at the start of the week’s Asian trading session. Thursday night’s news concerning the US-China agreement over the “Phase One” of the much-awaited trade deal has been the basis for commodity-linked currencies’ recent run-up. Both the world’s largest economies agreed, in part, over key issues like the currency pact and delay in tariffs. However, clear directions to the trade team are yet to roll out and hence a cautious optimism prevails among the global trade watchers. Recently, the United States’ (US) President Donald Trump conveyed optimism surrounding the trade discussions with China. Though, uncertainty surrounding the Republican leader’s tariff increase, as observed through mixed signals from the Treasury Secretary Steve Mnuchin and Trade Representative Robert Lighthizer, seems to raise doubts over smooth running over the second stage of talks. It should also be noted that the overall risk-on sentiment weighs on the greenback and adds to the pair’s strength while supporting Antipodeans. Moving on, the US markets are off for the Columbus Day but September month trade data from China could offer immediate direction to the Kiwi pair. Forecasts suggest soft figures of $33.30B versus $34.83B (revised) for the headline Trade Balance with Imports likely being recovered to -5.2% from -5.6% but the Exports bear downbeat consensus of -3% against -1% prior. Technical Analysis The 21-day exponential moving average (EMA), at 0.6317 now, offers immediate support to the pair before dragging it to 0.6276/70 rest-area including lows marked on September 03 and October 10 while also comprising October-start highs. On the upside, the 50-day EMA level of 0.6373 holds the key to pair’s run-up towards 0.6400 and September month tops nearing 0.6450.
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