Chinese stocks incur losses, Dollar continues to strengthen and a new war between Trump and the European Union

S&P futures marginally higher while the Asian stocks retreat first time in three days as the Japanese markets are closed for a holiday

Chinese stocks incur losses, Dollar continues to strengthen and a new war between Trump and the European Union

a new war between Trump and the European Union

S&P futures marginally higher while the Asian stocks retreat first time in three days as the Japanese markets are closed for a holiday. FX majors are little changed as the Aussie dips briefly after China’s industrial output misses estimates.

Treasury futures are muted inside narrow range while the Australian bonds unchanged. The People Bank of China steps up liquidity injections to the tune of 300 billion yuan the most since February.

Chinese stocks were able to pare early losses following some mixed data as the Shanghai Composite were 0.5% lower. H shares lost 0.7%.

Crude oil futures slip as Trump is said to consider releasing oil from SPR stockpiles as Dalian iron ore was 0.7% stronger.

The Key Headlines of the Asian Session:

  • Trump calls the European Union a “foe” of the U.S. as he cites trade tensions between the two.
  • The EU and China are going to uphold multilateralism and free trade according to the Chinese Prime Minister Li.
  • China bars foreign companies and other securities from stock link
  • China Q2 GDP 6.7% y/y vs 6.7% estimate; June industrial output 6.0% y/y vs 6.5% estimate; Retail Sales 9.0% y/y vs 8.8% estimate; Fixed Assets Investment 6.0% y/y vs 6.0% estimate.
  • New Zealand June Services index 52.8 vs 57.1 previous.

OUTLOOK

The European market takes over the Asian Session as investors look ahead for the Eurozone trade balance which might have an effect on the market especially because of the Trade War brewing between the EU and the U.S.

However, the most important point that investors will be looking at is the meeting between the President of the United States Donald Trump and the Russian President Vladimir Putin as severe repercussions might be brewing according to the outcome of the meeting.

TRADERS VIEW

The dollar is mostly steady in Asian session as investors await retail sales data ahead of Fed Chairman Powell’s two-day testimony later this week. Euro is little changed even as President Donald Trump named the European Union as a “foe” of the U.S. in an interview. Japanese markets are closed Monday for a public holiday.

USDJPY – The pair has bullishly breached the resistance at the May high. Resistance is seen at the 113.39 followed by 113.75. Support, on the other hand, is seen at 111.40 followed by 110.28.

USD/JPY

EURUSD – The pair is currently being capped at the 50-DMA. Resistance is seen at 1.1712 followed by 1.1851. Support, on the other hand, is seen at 1.1527 followed by 1.510.

EUR/USD

EURJPY – The pair may test the 200-DMA in the near term. Resistance is seen at the 131.94 followed by the 133.49. Support, on the other hand, is seen at 129.91 followed by 128.50.

EUR/JPY

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***Information contained in this newsletter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making but merely provides information from the market for its clients as additional information is made available as per the events occurring in the financial markets.

 

HIGH-RISK WARNING:

Trading Forex (Foreign Exchange) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

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