US-Tariffs,Profit-Taking & Payrolls

  • Today The USD regained some dominance and back in the spotlight, affected by the Imposing of US. Tariffs, on Steel, Aluminum, and other Metals. These new round of Tariffs will affect the EU, Canada, Mexico & China. likely to mess up the NAFTA deal.
  • The EUR, GBP, JPY, a basket of other major currencies and commodities recoiled into a bearish mode. Although reversals are in view.
  • EUR/USD was down 0.3% trading in the comfort zone according to the RSI between 1.1519 – 1.1724.
  • GBP/USD is seen struggling between 1.1519 – 1.1724 with a 0.12% drop.
  • The Gold spot was also down 0.12% ranging between 1,297.90 – 1,298.70
  • WTI Crude oil remains political the EIA, energy Information administration report a surprise draw of nearly 4 million barrels the news had Oil prices climbing up but was unable to breach the $70bbl mark, before losing steam.
  • With the USD strong and ahead of the Baker Hughes Rig count further downside may be seen pushing Oil prices.
  • Cryptocurrencies are mixed however upside movements are likely with tokens like BTC, ETH & XRP vs. USD.
  • Asian Shares went on a short roller coaster trip receding then climbing again. The positive outlook for Asian shares may cause EU share to take advantage of some uptrends.
  • Friday’s usual profit-taking is unabated. Some assets going to be seen swinging between small gains and losses throughout the day.
  • Fresh criminal charges, against the Australian –New Zealand Bank, ANZ has sent shock waves throughout the battered banking industry ANZ shares plummeted along with Citi & Deutsche Bank.
  • Meanwhile, market participants gauge the NFP/Non -Farm Payrolls to access the strength of the USD. Some analysts think it could disappoint market expectation just like the ADP did on Wednesday.

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Its a Sunshine Day for EUR & Commodities.

The USD has been pinned down due to disappointing GDP and inflation reports from yesterday. On the other hand, the EUR rallied as Italian politicians cooled tempers.

  • EUR/USD is currently trending a path of 1.1519 – 1.1724 with more upside expected.
  • Asian stocks rallied welcoming the calmer atmosphere in Italy. EU shares are expected to rally in tandem.
  • Cryptocurrencies are mostly looking for a rebound up. Meanwhile, South Korea’s big exchange Bitumb banned Crypto trading in 11 countries including Iran & Iraq for not having adequate tools to regulate and prevent money laundering, thus dabbed Non-Compliant Countries & Territories (NCCT). Although this may create a short-term sell-off long-term rallies are eyed since the initial selloff with be from questionable participants.
  • Commodities are also looking positive due to the decline in the USD which makes commodities cheaper. Gold, Silver, Copper, Aluminum & Nickel are likely to tack on some handsome gains. Meanwhile, the Oil is on a downtrend, triggered by oversupply. Wednesday’s American Petroleum Institute/API reported a built of 1m barrels. Today The Energy Information Administration/EIA is expected to release its report on Crude Oil inventories at 16:00GMT probably with the revelation of more built. Crude Oil was seen ranging between 67.77 – 68.27 with perhaps more downside.

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Investors seek shade, Italy weighs.

A very busy calendar day with a deluge of reports coming out of the EU and US. The reports are set to cause a fair degree of volatility. Sending assets in and out of gains

  • With the Italian political saga weighing global stocks plummeted. Dow Jones was down nearly 480 pips as the big banks like JP Morgan shares tumbled. Germany30/DAX30, France40/CAC 40, Italy40 & FTSE100, are all struggling to come up yet remain bearish.
  • EUR was pushed down to almost 9 month lows, the EUR/USD is seen trending in the “Comfort Zone” of 1.1519 – 1.1612 with further downside expected later when the US releases its reports on GDP, PCE/Inflation numbers and the American petroleum institute/API reveals the levels of US weekly oil stocks today instead of the usual Tuesday report due to Monday’s Memorial Day commemoration.
  • Oil prices tanked 1.7% ranging between 66.37 – 67.12 due to increased U.S. shale production as well as Saudi and Russian intention to lift the production cap in place by OPEC. Likely this will pressure Oil downwards.
  • GBP/USD was spotted adding gains recovering from its recent sell-off as Brexit uncertainties weigh.
  • The USD Bond Yields were up, likely an indication that the USD may follow in its footsteps. Ahead of the Automatic Data processing report a prelude to the NFP.
  • Market uncertainties cause investors to flee to safe heavens, JPY is a positive benefactor like the Crypto-Currencies which recently has been behaving like the good old CBOE, S&P500 VIX. A fear gauge for market participants.
  • Commodities such as Gold, Copper were bearish in their outlook.
  • The CAD remains vulnerable awaiting today’s Canadian Interest rate decision.

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Italian Political Turmoil drives the Market.

The EUR was unable to crawl up significantly yesterday before the announcement of Italy’s new Prime Minister, the former IMF Director Carlo Cottarelli. The EUR’ plummeted below  6-1/2 month lows, now testing 1.15 support handle. Further downside movement is expected.EUR/USD was ranging between 1.1587- 1.1639 at the time of print 07:27GMT

The USD also lost some steam but remains relatively high as investors look out for the upcoming Fed rate hike. The Dollar Index/DXY trending between 94.28 – 94.70.

Some Market participants jumped ship in risk aversion, The JPY was the currency of choice as the usual Safe heaven rallied.

Asian shares were down trotting. EU Shares also traversed on a losing streak.

Germany 30 /DAX30, UK’s FTSE, France’s CAC40 and European Stoxx 600 was down some 1.3%, while Italian bond selloff like its doomsday. Asain shares shared the same weak sentiment. However with the US-North Korean summit back on the table support is Asian shares are expected.

Commodities were also driven down Gold, Silver, Oil remains bearish while Aluminum, Nickel, were Bullish.

Oil lost -1.7% by 09:27GMT ranging between 66.44 – 67.21. further downside is anticipated with the release of the API American Petroleum Institute’s weekly oil stock which is expected to report increase stockpiles on Wednesday.  Russian- Saudi collaboration to end the production limitation on OPEC members while filling up any vacuum left by Iran and Venezuela sanctions sent Oil prices nose diving.

The Russian Ruble and oil giants in Russia like Rosneft felt an abrupt selloff deepening the gap between the USD/RUB

Cryptocurrencies linger hopelessly down although some analysts predict a strong comeback as the Blockchain technology becomes more and more attractive for the establishment.

With the US & UK back from their Memorial and Spring Day celebrations increased volatility is expected.

 

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Is this EUR’s Comeback?

Monday the USD gave up some of its previous gains. Despite possible rejuvenated dealings between North Korea & the US.

The EUR extended gains moving from its 6-month lows up 0.47% at the time of print 06:35GMT ranging between 1.1646 – 1.1733. Upside movement Is still seen capped by Italian saga.

Meanwhile, other majors like the AUD, GBP also extended tepid gains.

All commodities except for copper were pressured down, which is unusual with the USD down, commodities should have surged. However, Chino-US Trade tensions are still weighing on the clarity for a way forward.

Oil sank from previous highs over the $72 handle, caused by increased U.S production. The Baker Hughes Rig count reported a rise of 15 new rigs from 844 to 859 on Friday.  Russia & Saudi Arabia are discussing ways to reclaim market share with the intention to make up the loss of production from Iran and Venezuela. WTI was down 1.78% ranging between 65.81 – 67.48 this would likely put more downward pressure on oil prices until the next update.

UK’s FTSE, France’s CAC40 & Germany’s DAX30 were bullish, unlike the Crypto which has been experiencing a selloff, although investors think any downtrend is a good buying opportunity volatility is keeping novice traders seeking a fast track of profits at bay.

The US & UK remain on holidays The US on Memorial Day & While UK Celebrates Spring holidays.

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The Dollar is still standing tall

The usual pre-weekend profit taking and US President Donald Trump’s latest reaction to North Korea leader Kim Jong Un, by pulling out of the 12 June US-North Korean summit, caused investors to initially scramble to the safe havens like gold and the JPY.

However, with further digestion of the details, it seems the USD consolidated higher than other majors.

Most of the commodities including Oil were trending in bearish mode. Ahead of the Baker Hughes Rig count further short-term downside is seen for oil which was down -0.47% ranging between 70.36 – 70.80.by 07:37 GMT.

EUR/USD was spotted trend between 1.1688 – 1.1726 with a loss of -0.23% GBP/USD was another major pressured down shedding a 0.27% and ranging between 1.3334 – 1.3422.

Global stocks seem to be in recovery mood from yesterday’s shock, the response to Trump by North Korea had a hopeful tone to it soothing investors’ confidence.

EU shares are expected to rebound up with limited gains FTSE, CAC40 & Germany’s DAX 30 are projected to close with gains ranging from 5-8%

Cryptocurrencies are mixed benchmark Bitcoin remains under pressure as the US tightens its grip on regulatory measures. The less popular Coins are however in the limelight today tacking on small gains.  BTC/USD shed -1.83% traversing in between 7,260.0 – 7,654.1 while, XRP/USD was up +1.94% ranging in 0.57708 – 0.63768.

The earnings report from Foot Locker Inc. Buckle Inc. & Hibbett Sports Inc. Before The US market opens could move the dial on Nasdaq, Dow, or S&P. Ahead of the release of US Data on Core Durable goods among other reports, the expectation is for the USD to hold on to gains

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