FX News Today
- Stock market sentiment stabilised during the Asian session and bargain hunting helped at least the Chinese markets to recover slightly.
- Australian Dollar continues to outperform as markets position for a rate cut from the RBA.
- US President Trump seemed to keep hopes of a trade deal alive, but it is pretty clear that any agreement is still a way off and that will likely keep market volatile for now.
- In Europe, investors will be bracing for more political turmoil in the U.K., which also raises the threat of a no-deal Brexit scenario once again, and the fallout from the ongoing European Parliament elections.
- The marked widening of spreads clearly has attracted the attention of ECB officials, which are once again eagerly campaigning for more risk sharing, Eurobonds and a Eurozone wide deposit insurance.
- The Oil prices have come slightly back from lows, although at currently $58.65 per barrel, the front end WTI future is heading for a sizeable weekly loss.
Charts of the Day
Technician’s Corner
- EURUSD spiked up from 2-year lows of 1.1200 into European open. The Euro’s new trend low, along with data misses prompted a quick and sharp short covering driven rally yesterday, which has since seen EURUSD touch highs of 1.1187. With a good number of shorts squeezed out of the market, the pair could enter a consolidative phase into the weekend.
- XAUUSD traded to 1-week highs over $1,287 yesterday, while today despite the small selling pressure it manage to hold above the $1,282 area. Safe-haven buying remains the mover, as global equities remained awash in a sea of red, largely driven by escalating trade war fears. From there, a sharp reversal lower for the Dollar added support to Gold prices. Solid resistance comes at the psychological $1,300 level.
Main Macro Events Today
- Retail Sales and Core (GBP, GMT 08:30) – Following a correction in March, Retail Sales are expected to slip this month by -0.4% m/m from 1.1% m/m.
- Durable Goods (USD, GMT 12:30) – Durable goods orders are pegged at -1.8% in April, after a 2.7% figure in March. Transportation orders should be -7.2%. Boeing orders should fall to the lean 28 area from an already-low 44 in March, with a likely hit via problems with the Boeing 737 Max that may have prompted buyers to delay new purchase commitments, while vehicle assemblies are seen steady from a 10.8 mln pace in March.
Support and Resistance levels
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Andria Pichidi
Market Analyst
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