Date: May07, 2019
Daily World Economic and Financial News
(CNBC): May07, 2019 --- The dollar hung near a five-week low against the yen on Tuesday after worries about U.S.-China trade tensions rekindled fears about the outlook for global growth.
(CNBC): May07, 2019 --- The greenback was relatively unchanged against most major peers, even as comments from the White House that China had moved away from trade-related commitments pushed down U.S. bond yields and stock futures.
(CNBC): May07, 2019 --- The dollar index against a basket of six rivals was basically unchanged at 97.53, having ended the previous session nearly flat.
(CNBC): May07, 2019 --- The euro held steady at $1.1199.
(CNBC): May07, 2019 --- The Australian dollar was up 0.1 percent at $0.6993, though it still hovered near a four-month low touched during the previous session. Investors eyed Australian retail sales data for March due at 0130 GMT for trading cues, while also keeping tabs on a rate decision by Australia’s central bank later in the day. A slim majority of economists polled by Reuters expected the Reserve Bank of Australia to keep rates at a record low 1.50 percent, though calls for an easing have grown louder after disappointingly weak first-quarter inflation.
(CNBC): May07, 2019 --- Sterling was a tad higher at $1.3107, recovering slightly after giving up more than half a percent overnight.
(BLOOMBERG): May07, 2019 --- Sweden’s krona declined to a decade low against the euro amid renewed anxiety about a global trade war and as the latest data fueled concern a slowdown in the Scandinavian economy is deepening..
EUR/USD re-takes 1.1200 amid upbeat Eurozone data and trade woes
The EUR/USD pair is crawling back towards the 1.12 handle, as upbeat Eurozone final services PMI, Sentix and retail trade data seems to have lifted some pressure off the Euro amid looming US-China trade concerns.
From a technical perspective, the pair's inability to build on its strength back above the 1.1200 handle clearly suggests that the recent pullback from a short-term descending trend-line resistance might still be far from over. Hence, a follow-through slide towards testing sub-1.1100 level now looks a distinct possibility. The mentioned support coincides with the lower end of over four-month-old descending trend-channel and should play an important role in determining the pair's next leg of a directional move.
On the flip side, any subsequent up-move might continue to confront some fresh supply near the mentioned trend-line resistance, currently near the 1.1240 region, above which the pair is likely to aim towards reclaiming the 1.1300 round figure mark. The momentum could further get extended towards testing the descending trend-channel resistance, currently near the 1.1340-45 region.
2. Fundamental Overview
The pair finally settled at the top end of its daily trading range but lacked any strong follow-through and opened with a bearish gap at the start of a new trading week. Weekend report that the US President Donald Trump vowed to hike tariffs on China poured cold water over the recent optimism over a possible trade deal. Meanwhile, China is reportedly considering cancelling the next round of trade talks with the US this week and triggered safe-haven flows towards the greenback. The pair, however, has managed to fill the bearish gap, though seemed struggling to extend the momentum further beyond the 1.1200 round figure mark.
Moving ahead, today's release of the final version of the Euro-zone Services PMI will be looked upon for some impetus. This coupled with the EU Sentix Investor Confidence Index for May, expected to have declined to -2.1 vs. the previous -0.3, and March Retail Sales might influence the shared currency and further collaborate towards producing some meaningful trading opportunities. There aren't any major market-moving economic releases due from the US and hence, the key focus will remain on any fresh US-China trade-related news/headlines.
International & Financial Terms
- Technical Analysis: In finance, technical analysis is a security analysis discipline for forecasting the direction of prices through the study of past market data, primarily price and volume. Behavioral economics and quantitative analysis incorporate substantial aspects of technical analysis, which being an aspect of active management stands in contradiction to much of modern portfolio theory. According to the weak form efficient-market hypothesis, such forecasting methods are valueless, since prices follow a random walk or are otherwise essentially unpredictable.
- Pivot point: A pivot point is a price level of significance in technical analysis of a financial market that is used by traders as a predictive indicator of market movement. A pivot point is calculated as an average of significant prices (high, low, close) from the performance of a market in the prior trading period. If the market in the following period trades above the pivot point it is usually evaluated as a bullish sentiment, whereas trading below the pivot point is seen as bearish.
- Flag pattern: The flag pattern is encompassed by two parallel lines. These lines can be either flat or pointed in the opposite direction of the primary market trend. The pole is then formed by a line which represents the primary trend in the market. The pattern is seen as the market potentially just taking a “breather” after a big move before continuing its primary trend. The chart below illustrates.
Compiler: A Bank Dealing Room Section
Management of International Deputy /The Expert In Charge Of Dealing Room