Trade Tensions weighs on, USD Skids

A second day with Asian shares down to 4 –month lows, due to the US-China Trade tensions, this time around US President Trump threatens to impose 10% tariffs on 200 billion of Chinese produce. As Asian shares weigh, the impact is felt in with the EU and US shares as well.

The Yen gathered momentum as investors flocked to it, a resort to safeguard or hedge against volatile eventualities. USD/JPY was at 08:05 trading between 109.55 – 110.57 with nose down -0.70%
 By the time the European Market opened on Tuesday morning, the USD had been reported to have shed -0.31% versus the EUR. Trending in between 1.1572 – 1.1644

GBP has been bearishly silent ranging in between 1.3196 – 1.3273.
Gold spot flicks in hopes of crossing the psychological 1,290.00 resistances handle. Range bound between 1,280.60 – 1,286.50

 The EUR lost ground from it slight gains Monday, as eyes shift to the European Central Banking forum in Sintra, Portugal.

 The AUD, & CAD were also victims of the US-China trade tensions.

Cryptocurrencies are bullish today on new that the Freedom of the Press Foundation is willing to accept donations in Crypto sending the message across that it believes Cryptocurrencies are legit.

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Oil tumbles, US-China Trade Wars & Abenomics

  • Following one of the busiest weeks in recent times in which 3 Central Banks’: namely the US Feds, The ECB and BOJ gave their interest rate announcements. The USD retained its Bullish trend, up to 7 months’ highs. Prompted by the Wednesday US rate hike, a dovish forward guidance statement from ECB President Mario Draghi, sent the EUR sliding to the benefit of the USD.
  • The meeting of Central Bankers which starts today in Portugal is likely to cause volatility in the FX arena. Heads of the BOJ, BOE, ECB, JPY, RBA, and FED are scheduled to give statements.
  • Oil prices tumbled, with the US overproduction of Shale Oil and the threat of abandoning the Saudi-Russian lead OPEC production cuts in the next OPEC meeting looms. Crude oil was seen ranging in between 63.41 – 64.34 with a -1.28% by 08:12 GMT swings between small gains and losses are expected as investors decipher the fate of oil.
  • Gold consolidates as investors remain wary of the US-China Tariffs saga, seek to hedge with Gold. XAU/USD rose 0.13% before mid-day GMT trading around 1,277.60 – 1,282.47 with further upside seen. As with JPY acting as Safe-Haven market participants are nonetheless keeping an ear out for any directional signs from the BOJ and Koruda and Prime  Minister Abe’s administration.
  • The Cryptocurrencies have also been caught in the crossfire with most of the top
  • token in red laying in a bearish mode.
  • It is likely that the US-China Trade wars may become the primary driver of market sentiment driving markets in the upcoming day while Oil is weighed down by upcoming oil Summit on Wednesday and Thursday.
  • Asia is low with the trade-wars likely to impact the EU Shares and cause US the remain subdued specifically USA 30, France CAC 40, Uk’s FTSE’s100, Germany’s DAX 30 are all in the red.

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Central Banks Drive markets & China Braces for more US-Tariffs

 

As investors get ready for the weekend and embrace US President Trumps next bout of tariffs to be imposed on China to a tune of $50billion. The USD remains firm.

EUR is likely going to end the week at its lowest in over a year and seven months as per the MACD. EUR Dropped from it 1.18 handle to range between 1.1543 – 1.1585

The downtrend is sparked on Thursday following a very dovish forward guidance statement from the ECB Chief Mr. Mario Draghi.

The European Central Bank announced it would be unwinding its asset purchasing program from 30million Euros to 15 million euros by October and ultimately do away with the stimulus program by December with no prospects of when rate hikes could be instated, EUR/USD is in the meantime jumping in and out of losses.

Naturally, French, Spanish, Italian and German government bonds rose to smack the yields into a bearish mode, although upside trends are not ruled out. Though Italy and French flex over the immigration and migration dispute, adding to the uncertainties.

Asian Shares have been flattened. However, market participants are hopeful for better signs in the EU as Volkswagen, names a new CFO.   Germany’s DAX 30, France’s CAC 40 and the UK’s FTSE are expected to open higher before retracting some of the gains.

As Central Banks address their various monetary policies, investors eye the Bank of Japan to see what rabbit will come out of the hat as a rate hike is not expected just yet. Likely paving the way for the USD to surge even more.

Commodities remain under pressure as USD consolidates.

Crude Oil attempted a short rally, however, range bound between 66.78 – 67.09 ahead of the Baker Hughes Rig Count.

Gold could not shake off the pressure either and was found oscillating in the familiar territory of 1,300.70 -1,306.70 and shedding its one-month gains

Cryptocurrencies are slightly bullish Friday morning with hacks and regulatory measures stilling weighing.

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European Central Bank’s Rate Decision on Tap

  • The USD’s rally ahead of the Fed rate hike has subsided from its three weeks’ highs as the Fed raised rates from 1.75% to 2.00% in expectation with markets view. However, The FOMC hinted on a more bullish path moving forward with possibly two more hikes before the end of the year. Investors took short-term profits.
  • EUR meanwhile gets center stage as focus shifts to the ECB’s upcoming rate decision set for 14:45GMT. It is highly plausible that there will be no rate hike instead, a discussion of when and by how much ECB’ is going to cut back from the 2.60 trillion-euro bond-purchase program, termed as Quantitative Easing, which was intended to bring the EUR to parity with the USD.  EUR/USD was trading between 1.1788 – 1.1820 with further upside in view.
  • The GBP as also been surging caught ranging between 1.3308 – 1.3411 ahead of Retail Sales reports. Fundamentals suggestions more uptrends. However, upside movement could be capped by Br-exit woes.
  • JPY has been gaining tractions as the USD recedes after the hype of the fed rate hike. Despite the fact, Japan’s Stimulus Program comes with its challenges which could give way to the USD.
  • Asian Shares slipped as Fed rate syndrome kicks in. The US-North Korean summit is being summed up as good for China but not the rest of Asia. Companies dealing with war supplies may be impacted and might need to adapt to the changing waves.
  • EU Shares meanwhile remain optimistic
  • Gold is back into haven status. Rallying with EUR and pulling with it Sliver. Gold was ranging between 1,301.00 – 1,307.10.
  • WTI Oil has been in bearish mode since the little rallying Wednesday after the EIA, Energy Information Agency’s report, which revealed that Crude Oil inventories receded by 4million barrels. However, with increased production activities unabated, Crude Oil was trending between 66.53 – 66.78.
  • Cryptocurrencies rallied for a brief period however almost all top 100 tokens are in bearish mode. A report alleging that Bitcoin prices were manipulated in 2017 hit news desks early this morning dampening investors interest.

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US Fed Rate Hike, Oil and Post US-North Korean Jingles

 One of the most exciting yet volatile trading days ahead as market participants move their focus from the US –North Korea Summit to other triggers. Crude Oil prices fell 0.59% ahead of Wednesday’s Crude Oil Inventories report by the EIA, Energy Information Administration.
 The Report is expected to reveal an increase in Oil inventory levels. Coupled with the fact that, the USD is in high demand, in anticipation of today’s Fed rate decision at 15:30 GMT. USD/JPY was up 0.31% by 08:26 GMT swinging between 110.31 – 110.71
Oil prices remain battered into selloff mode. On Tuesday API American Petroleum Institute gave a dismal outlook for oil citing a surge of 830,000 barrels rise which has been brought on by US Overproduction. The EIA, Energy Information Administration also reported on Wednesday, a possible drop of about 30% in Iranian and Venezuelan oil production, however with Saudi Arabia, increasing its production cap, OPEC noted a 50,000 barrel surplus, bring daily supply just above 31million barrels a day to offset drastic production cuts from Venezuela and Nigeria.
Gold prices also felt the crunch trending between 1,297.00 – 1,299.80 and shedding -0.15% further downside movement in view as with most all commodities, including Silver, Copper, Natural Gas, and Cotton.
 The EUR is unstable on the one hand its low value is attracting buyers and on the other hand Bank policies to curb the asset purchasing program has adverse effects. EUR/USD was 0.28% up ranging from 1.1730 – 1.1809. The Euro group meeting set for the day may reveal more details.
Asian shares dwindle as more investors eye the Fed rate decision, this downward trend is likely to impact the EU share negatively into a short-term downtrend.
GBP remains bearish ahead of a deluge of economic reports from the UK. -Which is likely to leave the GBP in cold waters. GBP/USD was ranging between 1.3312 – 1.3376 with a -0.40% drop.
 Meanwhile, Cryptocurrencies also recede into a bearish trade.

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Market Deciphers US-North Korean Summit.

Markets are deciphering the effects of the Historic US-North Korean summit, which ended with a cordial comprehensive agreement. Details are still murky, yet with positive undertones. In which President Trump retraits that North Korea will keep its promise and the US shall cease all War rhetoric

  • The USD continues to maintain dominance against all six Major currencies USD/JPY has been trending between 109.97 – 110.49 as investors gained more confidence from the results of the meeting. However, upside may be challenging due to the full price mode in anticipation of the Fed rate hike on Wednesday.
  • EUR/USD, lost some grounds in classical inverse correlation as the USD gained more traction. However, EUR remains supported by upcoming ECB rate decision on Thursday. Trading between 1.1741 – 1.1809.
  • Commodities also plummeted, except Oil, which is surging ahead of today’s API/ American Petroleum Institute Report, upon the release some analyst expect prices to fall on increased US production activities, meanwhile Crude Oil could be found between 66.03 – 66.58 at 7-days’ highs. Meanwhile Aluminum remains on demand sparked in part by the US Trade Tariffs.
  • Gold remains stuck in a range bound trajectory of 1,300.40 – 1,304.80 driven by geopolitical sentiment downside undertones may abound.
  • Asia is in a very positive mood with all indices and futures bullish taking the meeting between North Korean Leader and President Trump as welcoming for the future corporation. Global stocks are high
  • Cryptocurrencies are reversing recent losses. BTC/USD was up 0.81% ranging between 6,636.7 – 6,899.0. Volatility is to be expected as BTC remains below the 7k handle meanwhile the UK’s Financial Authority steps into advice Bank CEO’s on how to handle issues surrounding the cryptocurrencies
  • With Asia Up, EU is seen following up, with Germany30, up 0.011 % Uk’s 100, France’s CAC40 Italy 40, were all seen attempting to tack on gains however bearish by 09:05 GMT.

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