EURUSD, H1
The Dollar has picked up moderately amid a backdrop of geopolitical risk. While pro-democracy protests continued in Hong Kong’s central business district, reports came in that Beijing has expanded the scope of its Hong Kong security law to cover organisations as well as individuals. It will go before the Chinese parliament this week where it’s expected to be ratified into law. The US has threatened counter measures if the law comes into effect, and the EU has signalled it will be giving a “robust” message to China on the issue. The Hang Seng and main Chinese equity indices underperformed, with losses of 0.9% and 0.3% respectively. Other markets in Asia-Pacific mostly fared better, buoyed by reopening economies and positive developments on the vaccine/treatment front with regard to the Covid-19 coronavirus. Japan’s Nikkei closed with a 0.7% gain, though both South Korea’s KOPSI and Australia’s ASX traded flat. The S&P 500 closed on Wall Street yesterday with a 1.2% gain, and futures of the index are up over 0.5%, though off highs.
In the Forex realm, the narrow trade-weighted USDIndex inched up to a high of 99.21, up from yesterday’s 24-day low at 98.90. EURUSD concurrently ebbed to a 1.0951 low, down from yesterday’s six-day high at 1.0997. USDJPY edged out a five-day low at 107.36, which marked the base of a sub 30-pip range. The commodity currencies traded with little direction, consolidating recent gains. AUDUSD settled in the mid 0.6600s, below the 11-week high that was clocked yesterday at 0.6676. USDCAD traded a narrow range in the upper 1.37s, above yesterday’s 10-week low at 1.3755.
Front-month WTI oil prices are softer today after yesterday hitting an 11-week high at $34.81. The IEA said that the pandemic crisis is causing the biggest fall in global energy investment in history. The weekly EIA inventories will be published tomorrow (Thursday) following the Memorial Day holiday on Monday. Gold markets tanked yesterday under the key daily support at $1725, and today are testing $1705 and bringing the psychological $1700 level back into play once again.
Click here to access the HotForex Economic Calendar
Stuart Cowell
Head Market Analyst
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in Leveraged Products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.
