China cancels negotiations with the US, Euro rises after positive economic data in Germany, touching 1.1814 level
The U.S. equity futures gapped lower at the Globex open in reaction to further deterioration of the U.S/China trade situation, with China canceling talks. The Chinese and Japanese markets were closed for the day as the Hang Seng ended -1.6%.
The USD was supported across the Group-of-10 currencies during the Asian hours, particularly against the yuan and AUD, however that had faded through the European morning. The EUR/USD rallied through the 1.1750 after a decent German IFO report, which helped the EUR crosses push higher in tandem, and a move in the EUR/JPY pushed the USD/JPY through its overnight high. The GBP/USD bounced from Friday’s lows after the sharp sell-off with no major breakthroughs made on either side of the Brexit debate.
Bunds were weaker after the IFO numbers which also dragged lower by the USTs as cash markets reopen from Asian close as the UST curve continues to edge steeper.
European equity markets held small losses, as trade-proxy sectors such as autos and miners underperformed. The Media sector got its lift from Sky (+8.7%) after Comcast won the auction.
A Strong rally in crude after OPEC+ didn’t raise output and the supply squeeze continues.
The dollar failed to sustain an early-London advance amid muted volumes given Japan and China markets were shut for holidays but remained supported by trade tensions. Pound volatility was the highlight in options space for another day as Brexit headlines were in focus, while the euro advanced after German IFO data and ahead of a Mario Draghi speech Monday. Treasuries and European stock markets edged lower. Crude oil hit a fresh cycle high after OPEC shunned U.S. President Donald Trump’s calls to increase supply.
USD/DXY – The Dollar Index went up to 93.94. Immediate resistance today 94.15 and 95.00. Overnight low traded was 93.40. Immediate support can be found at 93.38 followed by 93.18. Look to buy with a likely range today of 93.50-94.50
EUR/USD – Bloomberg Trender Indicator turns bullish in the short term for the first time in two weeks, but failure to close above 1.1780 Fibonacci retracements to target June highs keeps bears in the game; 55-weekly MA at 1.1903. EUR closed at 1.14746. Euro benefitted from the good economic data in Germany. Immediate resistance today lies at 1.1848 followed by 1.1990. Immediate support can be found at 1.1620 followed by 1.1525. The overnight low was 1.1723. Look to trade a likely range today of 1.1700-1.1848.
GBP/USD – Momentum studies suggested a healthy correction and price action satisfies as Friday completes a bearish engulfing line; still bearish on the weekly, 55-DMA support pivotal.
GBP made 1.3062 as a low for yesterday. Immediate resistance for today lies at 1.3190 followed by 1.3275. Immediate support can be found at 1.3052 followed by 1.3096. Look for a likely trading range today of 1.3000-1.3170. Look to trade this range.
USD/JPY – DeMark Sell Countdown completed Wednesday and sell setup Friday urges caution to longs.
USD/JPY Closed at 112.79. USD/JPY went up and reached 112.82 as a high. Immediate resistance lies at 113.17 followed by 113.90. Immediate support can be found at 111.65 followed by 110.80 then 110.55.
AUD/USD – A short-term bottom seems to be in place; at bar 8 on daily DeMark sell setup as cloud bottom, 55-DMA resistance eyed.\
AUD went down closing at 0.7251 making 0.7280 as high. Immediate support at 0.7205 with the next support level at 0.7141. Immediate resistance is at 0.7362 followed by 0.7452. Look to buy dips with a likely range today of 0.7200-0.7330.
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