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화요일, 5월 21, 2019

The NZD/USD pair came with a touching distance of the 0.65 mark today and renewed its lowest level since October 2018 as the pair came under a renewed

AUD/USD selloff weighs on the pair on Tuesday.US Dollar Index clings to modest gains a little above 98.Coming up: Speeches by FOMC members Bostic and Rosengren and retail sales data from NZ.The NZD/USD pair came with a touching distance of the 0.65 mark today and renewed its lowest level since October 2018 as the pair came under a renewed bearish pressure during the Asian trading hours. With the market action turning subdued in the last hours, the pair has started to move sideways in the lower half of its daily trading range and was last losing 0.35% on a daily basis at 0.6510. The dovish shift in the Reserve Bank of Australia's monetary policy outlook as revealed by Governor Lowe's remarks and the bank's minutes of its May meeting caused the AUD to suffer heavy losses against its major rivals and weighed on the strongly-correlated kiwi. Meanwhile, the data from New Zealand showed that credit card spending grew by 4.5% annually in April to fall short of the market expectation of 5.9% and put additional weight on the currency's shoulders. On the other hand, with major European currencies and antipodeans struggling to find demand on Tuesday, the greenback gathered strength and the US Dollar Index rose above the 98 handle to touch its highest level of May at 98.13, keeping the bearish pressure on the pair intact. Later in the session, Boston Fed President Rosengren and Chicago Fed President Evans will be delivering speeches. In the early trading hours of the Asian session on Wednesday, retail sales data from New Zealand will be looked upon for fresh impetus.Technical levels to watch forWith a daily close below 0.6500 (psychological level/daily low), the pair could extend its slide to 0.6465 (Oct. 26, 2018, low) and 0.6425 (Oct. 8, 2018, low). On the upside, resistances are located at 0.6540 (daily high), 0.6580 (May 16 high) and 0.6615 (May 10 high).

• Over the past few trading sessions, the EUR/USD pair has been trending lower along a short-term descending trend-channel formation on the 1-hourly

   •  Over the past few trading sessions, the EUR/USD pair has been trending lower along a short-term descending trend-channel formation on the 1-hourly chart.   •  The pair has managed to stage a modest recovery from the mentioned trend-channel support, albeit might struggle to make it through 50-hour EMA resistance.   •  The mentioned hurdle coincides with the top end of the ascending trend-channel and might now act as a key pivotal point for any subsequent recovery.Technical indicators on the 1-hourly chart have just started catching up with the recovery move but maintained their bearish bias on 4-hourly/daily charts, suggesting that the near-term selling pressure might still be far from over. Hence, it would be prudent to wait for a convincing break through the said confluence resistance before traders start positioning for any further short-covering move back towards reclaiming the 1.1200 round figure mark.  Alternatively, fresh rejection from the current resistance zone might turn the pair vulnerable to challenge the trend-channel support, currently near the 1.1140 region before dropping to yearly lows, around the 1.1110 area.EUR/USD 1-hourly chart 

GBP/USD daily chart GBP/USD is finding some relief from after the intense selling of the last weeks. The main supports to the downside are at 1.2700 f

GBP/USD is having a 50-pip boost to the daily high, however, buyers will need to reclaim 1.2760 and 1.2800 to have a more convincing bottom.Brexit drama could be the main driver behind the recent jump in the New York session. UK PM May will announce a new Brexit deal at 15:00 GMT.GBP/USD daily chartGBP/USD is finding some relief from after the intense selling of the last weeks. The main supports to the downside are at 1.2700 figure, 1.2670 swing low and 1.2550 level.GBP/USD 4-hour chartGBP/USD is currently having a boost to the upside from the 1.2700 figure.
GBP/USD 30-minute chartGBP/USD is consolidating its losses above the 1.2700 figure. Cable is trading below its 200 SMA while above the 50 and 100 SMA. Bulls would need to trade above 1.2760 Monday high - to get out of the woods and create a more convincing reversal. Further up the next resistance is seen at 1.2800 figure. Supports are at 1.2700 and 1.2670 levels.
Additional key levels 

United States Redbook Index (MoM): 1.2% (May 17) vs previous 1.3%

United States Redbook Index (YoY) down to 5.2% in May 17 from previous 5.4%

According to Greg Gibbs, analyst at Amplifying Global FX Capital, the currency impact in recent weeks of the trade dispute/Huawei action has been domi

According to Greg Gibbs, analyst at Amplifying Global FX Capital, the currency impact in recent weeks of the trade dispute/Huawei action has been dominated by a weaker CNY flowing onto weaker Asian currencies.Key Quotes“As USD/CNY has approached previous highs near 7.0, the fall in CNY has slowed, helping slow the fallout to currencies in the region.” “The USD has tended to gain broadly, but this may also reflect the deteriorating Brexit process and the conflicting political ambitions of European political parties ahead of the EU parliamentary elections on 23-26 May.” “The trade dispute, in the early phases, is dampening global economic growth and generating weaker trends in riskier assets, including EM and commodity currencies, especially those with significant trade links to China.  This includes the EUR and AUD.” “However, we have to be wary of the trade dispute undermining confidence in the US economy, and bringing forward rate cut expectations in the USD.  This may tend to weaken the USD at some point.  This is more likely to show-up first against JPY, CHF and gold.” “We see a high risk that USD/CNY continues to rise as the Chinese economy shows signs of weakness and the trade dispute undermines economic confidence.” “The INR and AUD bounced on election results that provide specific reasons for these currencies to strengthen.  But they will not be immune from a weaker CNY and weaker Chinese economy.”

According to Carla Slim, economist at Standard Chartered, the worst may be over for the business cycle of the Turkish economy, but the path to recover

According to Carla Slim, economist at Standard Chartered, the worst may be over for the business cycle of the Turkish economy, but the path to recovery is not straightforward.Key Quotes“We believe GDP should return to growth in Q1-2019 on a quarterly basis (data to be released on 31 May), which means Turkey would have come out of ‘technical recession’ (characterised by two consecutive quarters of negative q/q growth). This view appears to be supported by industrial production, retail sales, economic confidence and PMI data, which have recently improved at the margin.” “Looking ahead, turbulent markets and uncertainty over the outlook could weigh on GDP performance beyond Q1, however.” “Persistently elevated risk perception clouds the outlook. Q1-2019 was characterised by impending signs of stabilisation following last summer’s FX crisis. A protracted period of volatility clouds Turkey’s outlook, which makes restoring confidence key in order to address risk perception.” “We see both the suspension of the weekly repo window and any upcoming cabinet re-shuffle in this vein. Against this backdrop, the Central Bank of the Republic of Turkey (CBRT) will likely be reluctant to embark on an easing cycle to avoid exacerbating existing pressures.” “We maintain our 2019 policy forecast at 22.0%, but push back the timing of our first cut to 25 July instead.”

• UK PM May will set out a new proposal for her Brexit deal at 15:00 GMT. • Traders opt to cover short positions in anticipation of a compelling offe

   •  UK PM May will set out a new proposal for her Brexit deal at 15:00 GMT.
   •  Traders opt to cover short positions in anticipation of a compelling offer.
The GBP/USD pair quickly reversed a mid-European session dip to fresh multi-month tops and rallied over 50-pips in the last hour. Having dropped to 1.2685 level - the lowest since mid-Feb., the pair witnessed an intraday turnaround and the latest leg of a sudden upsurge came after the UK government spokesman confirmed that PM Theresa May will set out a new proposal for her deal in a speech at 15:00 GMT. The spokesman further added that Cabinet discussed a new deal that is to be presented in parliament, which includes alternative arrangements, assurances on UK integrity in the event that the backstop is triggered - though there was nothing significant in terms of positive Brexit development. The price action, however, seemed to suggest some short-covering move ahead of the event risk, wherein May's offer might turn out to be compelling enough to convince the UK lawmakers to vote for her and pass the Withdrawal Agreement Bill.  Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term and positioning for any further near-term recovery amid persistent Brexit uncertainties. Technical levels to watch 

The greenback, in terms of the US Dollar Index (DXY), keeps the bid tone unchanged so far this week above the critical barrier at 98.00 the figure. US

DXY stays firm and keeps the 98.00 handle so far.Yields of the US 10-year note climb to daily highs around 2.43%.Fedspeak, housing sector data next of significance in the docket.The greenback, in terms of the US Dollar Index (DXY), keeps the bid tone unchanged so far this week above the critical barrier at 98.00 the figure.US Dollar Index focused on trade talks, dataThe upbeat mood around the index appears unabated so far, always sustained by increasing uncertainty stemming from US-China trade negotiations (or lack of them) and particularly following the Huawei-gate. In the meantime, concerns in the geopolitical space keep orbiting around US-Iran tensions and have been also lending support to the buck in past sessions. Moving forward in the US docket, Existing Home Sales for the month of April are due, while Chicago Fed C.Evans (voter, dovish) will discuss Economy and Monetary Policy and Boston Fed E.Rosengren (voter, centrist) will speak to the Economic Club of New York.What to look for around USDWith the US-China trade talks mired in the mud for the time being, investors’ attention have now shifted to the Chinese government and the likeliness of intervention in the Yuan, as the currency slowly approaches the psychological 7.00 mark without any progress in the negotiations, at least in the short-term horizon. On another direction, inflation figures remain in the centre of the debate among Fed members despite the solid labour market and healthy fundamentals, preventing the Fed from fully ruling out a rate hike later in the year. The positive outlook on the buck, however, stays unchanged and sustained by overseas weakness, its safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency.US Dollar Index relevant levelsAt the moment, the pair is gaining 0.08% at 98.01 and faces the next up barrier at 98.10 (high May 3) seconded by 98.32 (2019 high Apr.25) and finally 98.97 (78.6% Fibo of the 2017-2018 drop). On the other hand, a break below 97.70 (21-day SMA) would open the door for 97.23 (55-day SMA) and then 97.03 (low May 13).

Iraq's Oil Minister Jabar al-Luaibi crossed the wires in the last minutes saying that regional tensions continued to pose challenges to oil markets. "

Iraq's Oil Minister Jabar al-Luaibi crossed the wires in the last minutes saying that regional tensions continued to pose challenges to oil markets. "The JMMC (Joint OPEC-Non-OPEC Ministerial Monitoring Committee) must monitor markets to pave way for a new deal to stabilise markets and support prices at OPEC meet in Vienna," the minister added, as reported by Reuters.

• After yesterday's intraday pullback and a subsequent rebound from 100-hour EMA, the USD/JPY pair regained positive traction on Tuesday and climbed

   •  After yesterday's intraday pullback and a subsequent rebound from 100-hour EMA, the USD/JPY pair regained positive traction on Tuesday and climbed to two-week tops in the last hour.   •  A sustained move beyond 110.25 horizontal resistance was seen as a key trigger for intraday bullish traders amid improving risk sentiment and behind the latest leg of a sudden pickup.Bullish technical indicators on hourly charts remained supportive of the intraday positive move. However, oscillators on the daily chart are yet to catch up with the ongoing recovery and might turn out to be the only factor keeping a lid on any runaway rally.  Hence, any subsequent up-move seems more likely to confront some stiff resistance near the 110.80-85 area, which if cleared decisively would set the stage for a further appreciating move towards the very important 200-day SMA, currently near the 111.45 region. On the flip side, the 110.25 level, closely followed by the key 110.00 psychological mark - also coinciding with 100-hour EMA, remain immediate support to defend, below which the pair might turn vulnerable to head back towards challenging the 109.00 handle.USD/JPY 1-hourly chart 

British Prime Minister Theresa May's spokesman recently announced that the PM will be setting out the details of the new Brexit offer in a speech toda

British Prime Minister Theresa May's spokesman recently announced that the PM will be setting out the details of the new Brexit offer in a speech today at 1500 GMT.Key quotes (via Reuters)Cabinet discussed new deal on Brexit to be presented in parliament. New deal includes alternative arrangements, workers rights, environmental protections and assurances on integrity of UK in event of backstop. PM told ministers the WAB is the vehicle to get UK out of the EU and it is vital to find way to get it over the line. Cabinet meeting was characterised by shared determination to pass the WAB. There has been discussion about parliament having a role in determining future relationship with EU. We haven’t set out a timetable for indicative votes so far. Asked about whether a second referendum was raised in cabinet, says they discussed a whole range of issues. No deal remains a plausible outcome and work is ongoing. To get a new deal through parliament it is clear that it will have to contain significant new aspects.

Greg Gibbs, analyst at Amplifying Global FX Capital, suggests that the market should be bracing for retaliatory action by the Chinese government again

Greg Gibbs, analyst at Amplifying Global FX Capital, suggests that the market should be bracing for retaliatory action by the Chinese government against US companies selling products and services in China. Key Quotes“A number of major US companies such as Apple and Caterpillar are experiencing weaker share prices on fears that China will use its persuasion or direct regulatory power to damage sales by these companies in China (and elsewhere).” “The Huawei action suggests that it will be harder for the US and China to resume constructive talks on a trade deal.  This suggests that punitive tariffs will remain in place, and indeed may be increased further; the US administration has said it plans to extend 25% tariffs from 200bn of Chinese goods to all Chinese imports of around $500bn per year.” “There are currently no plans to continue the trade negotiations.  The delay in setting a timetable suggests there is a stalemate.” “The US administration appears to be digging in on its battle with China and may be looking for support from its allies, or at least wary of alienating them further at this time.” “There is a long and wide tail risk associated with the Huawei ban, and we need to be wary of a significant fallout to global risk assets.”

Atlanta Fed President Raphael Bostic crossed the wires in the last minutes arguing that the inflation in the U.S. was not "so far away" from the Feder

Atlanta Fed President Raphael Bostic crossed the wires in the last minutes arguing that the inflation in the U.S. was not "so far away" from the Federal Reserve's target to unanchor expectations.Key quotes (via Reuters)Financial stability a risk that is "always on the list" but not risen to crisis levels yet. Lack of wage pressure suggests natural rate of unemployment may be lower than previously thought.

The opposition Labour Party's spokesman McDonnell said that he didn't think Labour lawmakers would back British Prime Minister Theresa May's Brexit of

The opposition Labour Party's spokesman McDonnell said that he didn't think Labour lawmakers would back British Prime Minister Theresa May's Brexit offer. "Regardless of what the PM offers on Brexit, there is an overriding problem with the longer term stability of the Conservative Party," the spokesman added and stated that he didn't see the Labour Party abstaining in the vote.  While markets are waiting for the PM to deliver a statement on the new Brexit deal, the GBP/USD pair is trading at its lowest level since early January a little below the 1.27 mark.

• Gold finally broke down of its consolidative trading range - forming a bearish continuation rectangle chart pattern and tumbled to fresh two-week l

   •  Gold finally broke down of its consolidative trading range - forming a bearish continuation rectangle chart pattern and tumbled to fresh two-week lows.   •  A sustained break through the pattern support near the $1274 horizontal zone was seen as a key trigger behind the latest leg of a sudden drop in the last hour.The occurrence of death-cross on hourly charts - wherein 50-period SMA crosses below 200-period SMA, add credence to the bearish set-up. However, technical indicators on the 4-hourly chart remained in the oversold territory and might turn out to be the only factors holding traders from placing aggressive bearish bets. Meanwhile, oscillators on the daily chart maintained their bearish bias and are still far from being in the oversold zone, clearly suggesting that any attempted bounce might still be seen as a selling opportunity near the $1278-79 region for an eventual slide back towards monthly swing lows support near the $1266 region.Gold 1-hourly chart 

According to Paul Brand, ITV's poılitical correspondent, British Prime Minister Theresa May will be delivering a statement to lawmakers to the new Bre

According to Paul Brand, ITV's poılitical correspondent, British Prime Minister Theresa May will be delivering a statement to lawmakers to the new Brexit offer. Meanwhile, finance minister Philip Hammond recently crossed the wires reiterating that a no-deal Brexit could have unpredictable and significant effect on the UK economy.

The European currency remains unable to sustain any bullish attempt for the time being, leaving EUR/USD vulnerable to further downside. EUR/USD fragil

EUR/USD fades the earlier spike to the 1.1170/75 band.DXY moves further north of the 98.00 mark.Fedspeak, trade, data on focus later in the day.The European currency remains unable to sustain any bullish attempt for the time being, leaving EUR/USD vulnerable to further downside.EUR/USD fragile on trade fears, USD-buyingSpot has resumed the broad leg lower sparked after last week’s rejection from tops beyond 1.1260, eroding yesterday’s gains and re-shifting the focus to a potential challenge of YTD lows in the 1.1100 neighbourhood. As usual, US-China trade jitters remain the almost exclusive driver behind the pair’s price action along with souring sentiment on the geopolitical front, where Iran and the US are playing key roles. Earlier in the session, ECB’s Vice President Luis De Guindos warned that the ongoing slowdown in Euroland could motivate banks to increase their capital buffers. He also noted that the current momentum in Euroland risks tail events. Nothing worth mentioning data wise in the euro bloc, whereas Existing Home Sales for the month of April and speeches by FOMC’s Evans and Rosengren are due across the ocean.What to look for around EURRecent data releases in Euroland and Germany have poured cold water over the idea that some healing process could be under way in the region, re-shifting the focus to the ongoing slowdown and its probable duration and extension. In the meantime, the current ‘neutral/dovish’ stance from the ECB is expected to persist for the remainder of the year and probable through H1 2020. The broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with the now stalled US-China negotiations and potential US tariffs on EU products. On the political front, Italy has re-emerged as a source of uncertainty and volatility, while investors’ focus has now shifted to the EU parliamentary elections next week.EUR/USD levels to watchAt the moment, the pair is losing 0.17% at 1.1146 and faces the next support at 1.1135 (low May 3) seconded by 1.1109 (2019 low Apr.26) and finally 1.0839 (monthly low May 2017). On the other hand, a break above 1.1239 (55-day SMA) would target 1.1264 (high May 1) en route to 1.1302 (100-day SMA).

The AUD/USD pair came under strong bearish pressure during the Asian trading hours and retraced yesterday's modest rebound. After dropping below the 0

RBA's Lowe says that they have an "easing bias."US Dollar Index rises above 98 on Tuesday.U.S:-China trade-dispute remains elevated.The AUD/USD pair came under strong bearish pressure during the Asian trading hours and retraced yesterday's modest rebound. After dropping below the 0.69 mark, the pair has gone into a consolidation phase and was last down 0.51% on a daily basis at 0.6874. Earlier today, the Reserve Bank of Australia (RBA) in the minutes of its May meeting noted that a rate cut would be appropriate if no further improvements were witnessed in the labour market to trigger the initial selloff. Furthermore, following the RBA's publication, Governor Lowe said that they had an "easing bias" and announced that the board will consider the case for a rate cut in June to drag the pair even lower. Commenting on the RBA headlines, "June is fully priced for a cut, and unlike the surprise pause in May, it seems that a June cut is more likely. A second cut is also priced - and was embedded in the SoMP forecasts - it is just down to timing. So we look for a June cut and leave August as the next timing for now, for a terminal rate of 1%,” TD Securities analysts said. In addition to the RBA's dovish shift, the lack of developments pointing to a possible solution to the U.S.-China trade conflict continue to weigh on antipodeans.  Later in the session, markets will be paying close attention to speeches by FOMC members Rosengren and Evans. The only data from the U.S. will be the existing home sales, which is likely to be ignored by the market participants. On the other hand, Westpac Leading Index will be featured in the U.S. economic docket on Wednesday.Technical levels to watch for 

• Easing US-China trade tensions dampen safe-haven demand and helped regain traction. • A modest pickup in the USD remained supportive; subdued US bo

   •  Easing US-China trade tensions dampen safe-haven demand and helped regain traction.
   •  A modest pickup in the USD remained supportive; subdued US bond yields capping gains.

 
The USD/CHF pair regained positive traction on Tuesday and recovered the previous session's modest downtick, albeit struggle to make it through the 1.0120 supply zone. The US-China trade tensions eased a bit after the US Commerce Department temporarily allowed Chinese telecommunications giant Huawei to continue to purchase the US made goods until Aug. 19. The reprieve lifted global risk sentiment - evident from a goodish bounce in equities, and undermined demand for perceived safe-haven currencies - including the Swiss Franc.  The intraday momentum - marking the fifth day of positive move in the previous six, was further supported by some renewed US Dollar buying interest, which got a minor boost after the Fed Chair Jerome Powell argued against cutting interest rates in the near-term and said that it was premature to make a judgment about the impact of trade-tariff issues on the monetary policy. However, a subdued action around the US Treasury bond yields failed to impress the USD bulls and now seemed to be the only factor keeping a lid on any strong follow-through up-move amid absent relevant fundamental triggers. Later during the early North-American session, the release of US existing home sales data will now be looked upon for some short-term trading impetus. The key focus, however, will remain on Wednesday's release of minutes from the latest FOMC monetary policy meeting, which might play an important role in influencing the near-term USD price action and eventually provide some fresh directional impetus for the spot.Technical levels to watch 

EUR/JPY continues to trade within a broad consolidative theme around the 123.00 handle, although a surpass of this important hurdle still remains elus

EUR/JPY exchanges gains with losses in sub-123.00 levels.US-China trade, geopolitics keep driving markets’ mood.A test of the 122.00 neighbourhood remains a palpable chance.EUR/JPY continues to trade within a broad consolidative theme around the 123.00 handle, although a surpass of this important hurdle still remains elusive.EUR/JPY focused on trade, risk trendsThe absence of relevant headlines in the protracted US-China trade dispute leaves developments from the US-Huawei effervescence as one of the main drivers among market participants in past hours. In fact, Chinese tech giant Huawei is the centre of the storm nowadays after the White House blacklisted the company and later prohibited American firms to trade software and components with the Asian company. Nothing from the euro calendar today, while ECB’s VP L.De Guindos said at an event in London that the ongoing slowdown in the region could prompt some banks to increase their capital buffers. He also added that the mentioned deceleration favours the occurrence of tail events.What to look for around JPYThe main driver behind the price action around the Japanese Yen is expected to come from the risk appetite trends and their effects on the safe haven flows. In this regard, the US-China trade concerns plus rising geopolitical fears from US-Iran friction and the potential slowdown in the global economy are seen sustaining the higher demand for JPY. On the soft side for JPY, although largely priced in byt investors, the Bank of Japan remains strongly committed to its QQE programme.EUR/JPY relevant levelsAt the moment the cross is gaining 0.01% at 122.90 and faces initial resistance at 123.61 (high May 10) followed by 123.79 (21-day SMA) and finally 125.23 (monthly high May 1). On the other hand, a breach of 122.08 (low May 15) would aim for 120.54 (monthly low Jan.17 2017) and then 118.82 (2019 low Jan.3 ‘flash crash’).

Carsten Brzeski, chief economist at ING, suggests that Germany is heading towards another make-it-or-break-it election on 26 May and the fate of the G

Carsten Brzeski, chief economist at ING, suggests that Germany is heading towards another make-it-or-break-it election on 26 May and the fate of the German coalition depends on it.Key Quotes“Bremen is the smallest state in Germany and one of the poorest, with the highest unemployment rate. A port city with a long and proud history, in which the Social Democrats, the SPD, have ruled in various coalitions almost continuously. And now, the red fortress is about to fall for the first time since World War II. Why should anyone outside of Bremen care? Because if the SPD suffers another severe defeat, it could have consequences in Berlin.” “In Bremen, the mayor election is a neck-and-neck race between the SPD and the CDU, with the very latest opinion polls seeing a lead for the CDU. If Bremen changes its political colour, there is a high risk that the SPD will withdraw from the federal government.” “Losing Bremen would be more symbolic than losing in the European elections. But add to this the frequent speculation in the German media about Chancellor Angela Merkel stepping down before the 2021 elections to pave the way for a successor, and the ingredients for a stormy political summer in Germany are all in place.” “When watching election results on Sunday, don't just focus on the European elections, keep a close eye on Bremen, too. The noise that these state elections produce could make their famous town musicians proud.”

• The GBP/JPY cross struggled to register any meaningful recovery and remained well within the striking distance of three-month lows set on Friday. •

   •  The GBP/JPY cross struggled to register any meaningful recovery and remained well within the striking distance of three-month lows set on Friday.   •  Any attempted intraday rebounds have been facing stiff resistance near a short-term descending trend-line, which coincides with 100-hour SMA.   •  The mentioned confluence region might now act as an important pivotal point and a key trigger for intraday traders/any meaningful recovery.Technical indicators on hourly charts have been recovering but maintained their bearish bias, while remained in the oversold territory on the daily chart and support prospects for some short-covering bounce. A sustained move beyond the 140.80-70 support break-point, now turned resistance, will reinforce the expectations and lift the cross further beyond the 141.00 handle towards testing its next major hurdle near the 141.30 region. On the flip side, weakness below the 139.70-65 region would pave way for an extension of the near-term bearish trajectory further towards challenging the 139.00 round figure mark en-route 138.75 horizontal support.GBP/JPY 1-hourly chart 

With the commodity-sensitive loonie gathering strength on the back of rising crude oil prices, the USD/CAD pair closed the first day of the week...

Crude oil prices push higher following Jeddah meeting.US Dollar Index climbs to multi-week highs above 98.Coming up: Existing home sales from the U.S. and speeches by FOMC members.With the commodity-sensitive loonie gathering strength on the back of rising crude oil prices, the USD/CAD pair closed the first day of the week with a modest 20-pip loss and continued to push lower on Tuesday toward the 1.34 handle. As of writing, the pair was down 0.08% on a daily basis at 1.3420. Although OPEC+ at the Jeddah meeting said it decided to opt out not to make any decisions on crude oil output ahead of the June meeting, Saudi Arabia's Energy Minister Khalid al-Falih noted that they were willing to drive down oil inventories. After closing the previous day $0.5 higher, the barrel of West Texas Intermediate climbed higher today and was last up 0.8% on the day at $63.70. Meanwhile, following yesterday's consolidation phase below the 98 mark, the US Dollar Index gained traction on Tuesday and advanced to its highest level in three weeks as the selling pressure surrounding the major European allowed the greenback to find demand.  Ahead of the existing home sales data, the US Dollar Index is up 0.15% on a daily basis at 98.07. Also in the American session, Boston Fed President Rosengren and Chicago Fed President Evans will be delivering speeches. There won't be any macroeconomic data releases from Canada.Technical levels to watch for 

Bill Diviney, senior economist at ABN AMRO, points out that Japan’s Q1 GDP surprised to the upside at 2.1% qoq annualised, well above consensus (-0.2%

Bill Diviney, senior economist at ABN AMRO, points out that Japan’s Q1 GDP surprised to the upside at 2.1% qoq annualised, well above consensus (-0.2%) and their (0.5%) expectations, as well as trend growth (c.1%), but the details paint a far less rosy picture of the economy.Key Quotes“Both private consumption and business fixed investment fell on the quarter, each subtracting 0.2pp from annualised growth. At the same time, the main positive contributions came from net exports (+1.5pp) and inventories (+0.6pp). However, exports actually plunged -9.4% on the quarter, and the only reason for the positive trade contribution is that imports fell at a much faster pace, by -17.2%.” “Similar to other regions, the strength in Q1 looks unsustainable – The story of unusual net export and/or inventory build contributions is consistent with what we have seen in some other advanced economies, notably the US and the UK, and suggests the current strength in global growth is unsustainable.”

The sell off i the British Pound is lending extra wings to EUR/GBP to the boundaries of the key barrier at 0.800 the figure. EUR/GBP probes the 200-da

EUR/GBP pushes higher and approaches the key 0.8800 milestone.Speculations escalate on another potential vote on May’s deal.Pressures on the rise over PM May to announce her exit from Number 10.The sell off i the British Pound is lending extra wings to EUR/GBP to the boundaries of the key barrier at 0.800 the figure.EUR/GBP probes the 200-day SMAThe European cross is extending its march north on Tuesday, advancing uninterruptedly since monthly lows in the 0.8490, already gaining around 3.6% and always tracking the increasing and unabated selling pressure in the Sterling. Rising Brexit jitters coupled with uncertainty in the UK government and the likeliness that PM Theresa May could step down in the not-too-distant future has been removing shine from the British Pound and fuelling the deep leg lower. Back to Brexit, several key MPs like A.Leadsom and J.Rees-Mogg have already anticipated they will not back PM May’s Brexit plan at the eventual vote at the House of Commons early in June.What to look for around GBPFollowing the cross-party fiasco, investors are now looking to another potential vote of PM May’s Brexit plan early next month, despite not few MPs have been already campaigning against it. In addition, bets on the probable successor of Theresa May at Downing St. remain on the rise and also collaborates with the rising volatility in GBP. On another direction and centred on the UK economy, recent publications from the industrial sector somewhat confirmed the rebound seen in the previous months, although the bounce in activity was exclusively driven by companies stockpiling in case of a ‘hard Brexit’ scenario rather than in response to a more ‘genuine’ recovery in the sector. Further out, the current steady stance from the Bank of England appears justified by below-target inflation figures, mixed results from key economic fundamentals and somewhat slowing momentum in wage inflation pressures, all adding to speculations of a ‘no-hike’ this year despite some calls signalling a potential hike in November.EUR/GBP key levelsThe cross is gaining 0.09% at 0.8783 and a break above 0.8790 (200-day SMA) would expose 0.8821 (high Feb.5) and finally 0.8840 (monthly high Feb.14). On the downside, initial contention aligns at 0.8722 (high Mar.2) seconded by 0.8684 (100-day SMA) and then 0.8611 (55-day SMA).

• The JPY’s relative safe-haven demand recedes on easing US-China trade tensions. • A modest pickup in the USD demand remained supportive of a mildly

   •  The JPY’s relative safe-haven demand recedes on easing US-China trade tensions.
   •  A modest pickup in the USD demand remained supportive of a mildly positive tone.
   •  Softer US Treasury bond yields seemed to keep a lid on any meaningful up-move.
The USD/JPY pair held on to its mildly positive tone through the mid-European session on Wednesday, albeit seemed struggling to extend the momentum.  After some good two-way price moves at the start of a new trading week, the pair managed to regain some traction and was supported by fading safe-haven demand amid easing US-China trade tensions. Traders cheered a reprieve in the US-China trade tensions after the US Commerce Department temporarily allowed Chinese telecommunications giant Huawei to continue to purchase the US made goods until Aug. 19. The optimism was evident from a goodish bounce in equity markets and undermined the Japanese Yen's safe-haven status, which coupled with a modest pickup in the US Dollar demand remained supportive of the uptick. The greenback got a minor lift after the Fed Chair Jerome Powell argued against cutting interest rates in the near term, albeit a subdued action around the US Treasury bond yields kept a lid on any runaway rally. Hence, the focus will remain on Wednesday's important release of the minutes from the latest FOMC monetary policy meeting, which might eventually help determine the pair's next leg of a directional move. In the meantime, today's US economic docket - featuring the release of existing home sales data, will be looked upon to grab some short-term trading opportunities later during the early North-American session.Technical levels to watch 

United Kingdom CBI Industrial Trends Survey - Orders (MoM) below forecasts (-5) in May: Actual (-10)

In view of Karen Jones, analyst at Commerzbank, gold has once again sold off its nine month uptrend line at 1273, and this is starting to look exposed

In view of Karen Jones, analyst at Commerzbank, gold has once again sold off its nine month uptrend line at 1273, and this is starting to look exposed.Key Quotes“Failure here will allow for slippage to the 200 day ma and October high at 1258.92/1243.55 and this will need to hold to retain our bullish outlook. Should it hold here than gold will remain well placed to challenge the resistance at 1324.76/1326.51, the January and March highs.” “Only a close below the 1243.55 October high would call into question our bullish bias by neutralising the chart and suggesting further weakness to 1231.20, the 61.8% retracement and 1200, the 78.6% retracement.” “Above 1326.51 would allow for a retest of the February high at 1347.11. Directly above here lies the 1358.70 major resistance. This is extremely tough resistance for the market and we would allow for this major zone to again hold.”

Portugal Current Account Balance: €-1.591B (March) vs previous €-1.408B

The European Central Bank (ECB) Vice President Luis de Guindos told a conference in London, the Europeans banks must build extra capital buffers to mi

The European Central Bank (ECB) Vice President Luis de Guindos told a conference in London, the Europeans banks must build extra capital buffers to mitigate the risk of unexpected shocks amid a slowdown in Eurozone growth. Key Quotes: “The slower growth momentum we are seeing increases the risk of tail events, in other words, shocks that are unlikely to occur, but would have a significant impact on the financial system and the economy if they did.”  “The continued build-up of buffers could therefore be justified, especially in those countries where the long upturn may have led to an underestimation of credit risk or where private indebtedness is particularly high or rising.”

• Investors seemed convinced that May’s Brexit deal will not pass through the UK parliament. • Speculations over May’s replacement with a pro-Brexit

   •  Investors seemed convinced that May’s Brexit deal will not pass through the UK parliament.
   •  Speculations over May’s replacement with a pro-Brexit PM add to concerns about a no-deal.
   •  The USD climbs to multi-week tops and further collaborates to the ongoing bearish trajectory.
The GBP/USD pair finally broke down of its consolidative trading range and slipped below the 1.2700 handle, or fresh three-month lows in the last hour. The UK political headwinds continued denting sentiment surrounding the British Pound and ensured that bearish traders maintained their dominant position on Wednesday. The pair added to its recent heavy losses and has now retreated nearly 500-pips from the 1.3175-80 region touched earlier in May.  The latest leg of a downtick since the early European trading session lacked any obvious catalyst but came after the UK opposition Labour party MP Emily Thornberry reiterated that her party will vote against the UK PM Theresa May Withdrawal Agreement Bill in June. The comments reinforced market expectations that May's Brexit deal stands no chance to get parliament's approval for the fourth time and increase chances of her early exit. This coupled with speculations over her replacement with a pro-Brexit PM eventually raises the risk of a no-deal Brexit and might continue fueling the GBP weakness.  On the other hand, the US Dollar climbed to fresh three-week tops and further collaborated to the pair's heavily offered tone. The greenback remained supported by the fact that the Fed Chair Jerome Powell indirectly argued against cutting interest rates by saying that it was premature to make a judgment about the impact trade-tariff issues could have on monetary policy. With the second-tier release of existing home sales data from the US, Tuesday’s economic docket lacks any major market-moving economic releases and hence, the incoming Brexit-related news/developments might continue to act as an exclusive driver of the pair’s momentum.Technical levels to watch 

Karen Jones, analyst at Commerzbank, explains that the USD/JPY pair remains under pressure following its recent key week reversal from the 112.46 2015

Karen Jones, analyst at Commerzbank, explains that the USD/JPY pair remains under pressure following its recent key week reversal from the 112.46 2015-2019 downtrend but is seen to continue to near-term recover.Key Quotes“It has bounced from 109.02 near term and currently the rebound looks set to halt circa 110.71. Failure at 109.02 would push the late January low at 108.49 and the 50% retracement at 108.25 to the fore.” “Further down sits the 107.27 61.8% Fibonacci retracement. Minor resistance comes in at the 110.84 April 10 low.” “Above the 112.46 downtrend lies the 114.55 October 2018 high.”  

The Paris-based Organization for Economic Co-operation and Development (OECD), in its latest economic outlook on the global economy released this Tues

The Paris-based Organization for Economic Co-operation and Development (OECD), in its latest economic outlook on the global economy released this Tuesday, lowered 2019 global economic growth forecast to 3.2% from 3.3% in March.Key highlights:   •  2020 global economic growth seen at 3.4% (unchanged).
   •  Global growth is to remain sub-par due to trade tensions.    •  2019 US economic growth seen at 2.8% (0.2% higher).
   •  2020 US economic growth seen at 2.3% (0.1% higher).    •  2019 China economic growth seen at 6.2%.
   •  2020 China economic growth seen at 6.2%.     •  2019 Euro-zone economic growth seen at 1.2% (0.2% higher).
   •  2020 Euro-zone economic growth seen at 1.4% (0.2% higher).    •  2019 Japan economic growth seen at 0.7% (0.1% lower).
   •  2020 Japan economic growth seen at 0.6% (0.1% lower).    •  2019 UK economic growth seen at 1.2% (0.4% higher).
   •  2020 UK economic growth seen at 1.0% (0.1% higher).

The Turkish Lira is prolonging the choppy trade so far this week and is now lifting USD/TRY to the boundaries of the 6.10 mark, where sellers remain c

USD/TRY extends the sideline theme around the 6.00 handle.The CBRT resumed its One-Week Repo auctions today.Geopolitics, domestic politics keep weighing on TRY.The Turkish Lira is prolonging the choppy trade so far this week and is now lifting USD/TRY to the boundaries of the 6.10 mark, where sellers remain clustered.USD/TRY bid after CBRT announcementTRY is facing renewed downside pressure on Tuesday following a solid demand for the greenback, geopolitical jitters and the recently announced decision by the CBRT to resume its repo rate auctions. In fact, the Turkish central bank (CBRT) announced earlier in the European morning that it will resume its auctions of the One-Week Repo Rate at 24.0%, lowering the rates by 150 bps. It is worth recalling that the central bank suspended its auctions a couple of weeks ago in an attempt to prevent a sharp depreciation of the Lira and amidst increasing financial effervescence, forcing banks to obtain funds at the overnight rate at 25.5%. In addition, TRY remains vigilant on escalating tensions between US and Iran while the run up to the new municipal elections in Istanbul on June 23 stays in centre stage on the domestic front.What to look for around TRYVolatility around the Turkish Lira has subsided somewhat as of late, although the broader sentiment around the EM FX space should continue to influence on the currency as well as tensions on the US-China trade front. In addition, friction between the AKP and its main opposition party ahead of the municipal elections in Istanbul is also emerging as another source for Lira volatility. Further out, potential US sanctions following the purchase of the Russian missile defence system keeps lingering over the country as well as sanctions over Iranian crude oil exports. Adding insult to injury, the independence and credibility of the CBRT should remain under the microscope against the omnipresent conflict between the Erdogan’s administration and bank’s authorities.USD/TRY key levelsAt the moment the pair is gaining 0.64% at 6.0621 and faces the next hurdle at 6.1311 (high May 13) seconded by 6.2457 (2019 high May 9) and then 6.8353 (high Aug. 30 2018). On the other hand, a breach of 5.9472 (low May 10) would aim for 5.7094 (low Apr.17) and finally 5.6579 (200-day SMA).

The renewed upside in WTI (futures on Comex) lost legs in Europe once again near 63.60 levels, as the risk sentiment soured amid escalating US-China t

Escalating US-China trade war tensions overshadow growing US-Iran rift. Oil will remain at the mercy of risk sentiment ahead of API crude stockpiles data. The renewed upside in WTI (futures on Comex) lost legs in Europe once again near 63.60 levels, as the risk sentiment soured amid escalating US-China trade tensions, despite the temporary reprieve offered by the US government to the Chinese Huawei Technologies. The demand for higher-yielding assets such as oil dampened as Asia started to feel the pinch of the intensifying US-Sino trade conflict, with Singapore, Thailand and South Korea having reported weaker fundamentals lately. At the time of writing, the black gold is seen printing daily lows near 63.20 levels and looks to test the 63.00 support area. Moreover, the latest report that the OECD has cuts its 2019 global economic growth forecast also collaborated to the downside in oil prices.  Earlier today in Asia, the renewed threats delivered by the US President Trump on Iran, helped the barrel of WTI pop up the 63.50 barrier. But sellers continued to lurk above the last amid trade anxiety, as the focus now shifts towards the American Petroleum Institute (API) weekly crude stockpiles data due to be published later today at 2130 GMT. In the meantime, the prices will continue to remain at the mercy of the risk trends.WTI Technical Levels  

Danske Bank analysts point out that for the markets, it is noteworthy that the Chinese central bank once again injected cash into the system overnight

Danske Bank analysts point out that for the markets, it is noteworthy that the Chinese central bank once again injected cash into the system overnight.Key Quotes“The central bank offered 80b yuan of seven-day funding, the biggest single-day injection in more than a month. It has fuelled hopes that the Chinese will stimulate the economy further and Chinese stocks are close to 2% higher this morning and both European and US equity futures are pointing higher.” “A 90-day waiver granted for certain US broadband companies using Huawei equipment might have also helped sentiment. Google will also be able to provide key Android mobile updates for 90 days.”  

Bill Evans, analyst at Westpac, suggests that they are announcing an adjustment to the Australia’s rate profile forecast to bring forward the first cu

Bill Evans, analyst at Westpac, suggests that they are announcing an adjustment to the Australia’s rate profile forecast to bring forward the first cut to the June RBA’s Board meeting with the second cut to follow in August.Key Quotes“We then expect the cash rate to remain on hold through 2020.” “This change in forecast reflects the lift in the unemployment rate for April from 5.1% to 5.2% and the confirmation from the Governor that the Board would be closely following developments in the labour  market with the primary focus on the unemployment rate.” “The Governor’s thinking has evolved over the year to accept that, as we have observed in other countries, upside inflation risks are consistent with a lower unemployment rate than had previously been assessed. For Australia the Bank had believed that the key unemployment rate was 5% - he now accepts that he can drive the economy harder with an associated lower unemployment rate without risking any inflation overshoot.” “With the June rate cut virtually locked in the issue is why we expect a follow up move in August.” “We also expect that the March quarter GDP report (released June 5) will confirm the Bank’s recent downbeat assessment of the consumer (consumer spending growth in 2019 revised down from 2.5% in February to 2.0% in May) and note that the May Minutes see downside risks to the consumption forecasts.”

Turkey's Central Bank (CBRT) announced on Tuesday that it will restart 1-week Repo auctions after having suspended it for almost two weeks. The Turkis

Turkey's Central Bank (CBRT) announced on Tuesday that it will restart 1-week Repo auctions after having suspended it for almost two weeks. The Turkish Lira came under fresh selling pressure, driving the USD/TRY pair to 6.0842 levels, the highest levels in two days.

Greece Current Account (YoY) down to €-1.503B in March from previous €-0.99B

Karen Jones, analyst at Commerzbank, suggests that GBP/USD pair remains on the defensive and attention is on the August, October and mid-January lows

Karen Jones, analyst at Commerzbank, suggests that GBP/USD pair remains on the defensive and attention is on the August, October and mid-January lows at 1.2696/62.Key Quotes“We note the oversold daily RSI and the TD perfected set up on the daily – both of which suggest the 78.6% retracement at 1.2644 will hold. Minor resistance comes in at the 1.2865 April low.” “Immediate downside pressure will be maintained while no rise above the 200 day moving average at 1.2956 is seen. Next up is the May 10 high at 1.3048. Only if this level were to be exceeded, would we look for the 1.3185/97 April and current May highs as well as the 61.8% Fibonacci retracement to be retested. This currently looks unlikely.”

Analysts at Standard Chartered note that Singapore’s economy expanded 1.2% y/y, lower than the advance print of 1.3%, as the downward revision in serv

Analysts at Standard Chartered note that Singapore’s economy expanded 1.2% y/y, lower than the advance print of 1.3%, as the downward revision in services (to 1.5% y/y from 2.1%) outweighed the upward revision to the manufacturing and construction advance prints.Key Quotes“More importantly, the Ministry of Trade and Industry (MTI) narrowed the 2019 GDP growth forecast range to 1.5-2.5% from 1.5-3.5% previously, to account for weak Q1 growth. The forecast range for 2019 non-oil domestic exports (NODX) was also lowered to -2-0% from 0-2%.” “The narrowing of the official GDP forecast to 1.5-2.5% was in line with earlier projections by the government. The Monetary Authority of Singapore (MAS) had noted in April that growth may come in slightly below the mid-point of the 1.5-3.5% forecast range (although one can argue the median forecast of 2% GDP growth now is more than a slight downgrade).” “Regardless, the MAS’s monetary policy settings are now likely neutral given the growth and inflation outlook, rather than still slightly accommodative, in our view.”

Akio Toyoda, Chairman of the Japan Automobile Manufacturers Association, said that the Japanese automobile makers lobby were extremely disappointed by

Akio Toyoda, Chairman of the Japan Automobile Manufacturers Association, said that the Japanese automobile makers lobby were extremely disappointed by the US President Trump’s comment. Trump said that imported vehicles were a threat to the US national security. Toyoda noted: “We are dismayed to hear a message suggesting that our long-time contributions of investment and employment in the United States are not welcomed.” This comes ahead of the US-Japan trade talks due later today. Japan’s Motegi: Japan-US to hold working level trade talks today

EUR/USD daily chart EUR/USD Overview Today last price 1.1154 Today Daily Change 28 Today Daily Change % -0.13 Today daily open 1.1168 Trends Daily SMA

EUR/USD has resumed the downside on Tuesday following yesterday’s mild and unfruitful recovery attempt.The continuation of the down move is expected to challenge yearly lows in the proximity of 1.1100 the figure. While below the multi-month resistance line at 1.1283, the negative stance in the pair is seen unchanged.Occasional bullish attempts should meet initial hurdle in the 1.1185/90 band, where coincide the 21-day and 10-day SMAs.EUR/USD daily chart  

• Easing US-China trade tensions dampen safe-haven demand and exert fresh pressure. • Rising US bond yields underpin the USD and further collaborate

   •  Easing US-China trade tensions dampen safe-haven demand and exert fresh pressure.
   •  Rising US bond yields underpin the USD and further collaborate to the intraday slide.
Gold came under some renewed selling pressure on Tuesday and slipped back closer to two-week tops, around the $1274 region in the last hour. A slight improvement in the global risk-appetite, amid easing US-China trade tensions turned out to be one of the key factors weighing on the precious metal's perceived safe-haven demand. Traders cheered a reprieve in the US-China trade tensions after the US Commerce Department temporarily allowed Chinese telecommunications giant Huawei to continue to purchase the US made goods until Aug. 19. This coupled with a modest US Dollar uptick exerted some additional pressure on the dollar-denominated commodity. The greenback bulls took cues from higher US Treasury bond yields, which climbed to over one-week tops in reaction to the Fed Chair Jerome Powell's comments that it was premature to make a judgment about the impact of trade-tariffs on monetary policy and dampened rate cut hopes. Hence, the key focus will remain on Wednesday's important release of minutes of the latest FOMC monetary policy meeting, which might now play an important role in determining the next leg of a directional move for the non-yielding yellow metal. Moving ahead, today's US economic docket - featuring the release of existing home sales, will influence the USD price dynamics, which coupled with the broader market risk sentiment might further collaborate towards producing some short-term trading opportunities. Technical levels to watch 

DXY daily chart Dollar Index Spot Overview Today last price 98.08 Today Daily Change 20 Today Daily Change % 0.13 Today daily open 97.95 Trends Daily

The index manages to leave behind yesterday’s pullback and has now reclaimed the key 98.00 handle and above, resuming the underlying bullish move.Next on the upside appear 2019 peaks beyond 98.30. A breakout of this area on a convincing fashion should open the door for a test of the Fibo retracement at levels just below 99.00 the figure.The broader constructive ooutlook is expected to prevail above key 200-day SMA at 96.37 and the +3-month support line at 96.46. This area of support is reinforced by a Fibo retracement of the 2017-2018 drop at 96.36.DXY daily chart  

EUR/JPY daily chart EUR/JPY Overview Today last price 122.75 Today Daily Change 42 Today Daily Change % -0.12 Today daily open 122.9 Trends Daily SMA2

The cross is prolonging the consolidative mood below 123.00 the figure amidst a fragile sentiment in the risk-associated space.The next target on the upside emerges at the 123.60 region (May 10 high) ahead of the 21-day SMA at 123.78. .In the meantime, a visit to recent lows in the 122.00 neighbourhood remains well on the cards in the short-term horizon while below the critical multi-month resistance line, today at 125.83.EUR/JPY daily chart  

Reuters reports the latest comments by the Chinese Foreign Ministry, with the key headlines found below. “Should base the trade deal on equality and m

Reuters reports the latest comments by the Chinese Foreign Ministry, with the key headlines found below. “Should base the trade deal on equality and mutual benefit.” Asked about trade dispute with the US, the Ministry said “foreign investors are still enthusiastic about China.” “Will continue to provide an even better investment environment for foreign companies.”

The UK opposition Labour party MP Emily Thornberry, as reported by ITV's political correspondent - Paul Brand, was noted saying that her party will vo

The UK opposition Labour party MP Emily Thornberry, as reported by ITV's political correspondent - Paul Brand, was noted saying that her party will vote against the Withdrawal Agreement Bill in June because as far as she can see there is very little difference between the bill and PM's original deal. Meanwhile, the bearish pressure surrounding the British Pound now seems to have picked up the pace, with the GBP/USD pair finally breaking below the 1.2700 round figure mark and hitting fresh multi-month lows.
 

Lan Shen, economist at Standard Chartered, points out that their latest SMEI survey indicates a further softening in China’s SMEs’ performance in May

Lan Shen, economist at Standard Chartered, points out that their latest SMEI survey indicates a further softening in China’s SMEs’ performance in May following ‘green shoots’ in Q1 this year.Key Quotes“The headline SMEI (Bloomberg: SCCNSMEI <index>) – based on our monthly survey of more than 500 SMEs nationwide in China – eased to 54.7 in May from 56.8 in April and 57.1 in March.” “The growth momentum indicator (new orders less finished-goods inventories) moderated for a second straight month in May.” “The ‘current performance’ and ‘expectations’ sub-indices retreated synchronously in May, for the first time since the start of the year, reflecting headwinds to growth momentum. Both domestic and external demand weakened, weighing on production activity. Prices remained largely contained, constraining profitability.” “SMEs’ credit conditions remained largely stable in May, though they did not improve further. Structural policy tools are likely to continue to support financing for SMEs. Expectations of Chinese yuan (CNY) weakening against the USD rose again in May on trade concerns, but were under control compared to Q3-2018, when the US announced the first batch of tariffs.” “We expect USD-CNY to stay under 7.0 in the near term, with China’s central bank helping to stabilise market expectations.”

The UK Cabinet Minister, Andrea Leadsom was out on the wires in the last hour saying that the UK must be able to negotiate free trade deals after Brex

The UK Cabinet Minister, Andrea Leadsom was out on the wires in the last hour saying that the UK must be able to negotiate free trade deals after Brexit and leave the EU with no deal if needed. Continues to support the UK PM Theresa May's Brexit deal. I am actively considering running for PM but will make the announcement when May steps down, Leadsom added further.
 

• RBA’s Lowe hints to a possible rate cut at June policy meeting. • Rising US bond yields underpin USD and add to the selling bias. The AUD/USD pair

   •  RBA’s Lowe hints to a possible rate cut at June policy meeting.
   •  Rising US bond yields underpin USD and add to the selling bias.
The AUD/USD pair extended its sharp intraday slide and has now dropped back closer to 4-1/2 month lows, set last Friday. The early optimism at the start of a new trading week, led by a surprisingly positive outcome from the Australian election faded rather quickly on the back of news that China is considering suspending business with suppliers who agreed to halt supplying Huawei. The pair failed to capitalize on the weekly bullish gap opening, albeit managed to end the day with modest gains and managed to regain some positive traction during the Asian session on Tuesday. The uptick, however, fizzled out following the release of dovish sounding RBA monetary policy meeting minutes. The selling pressure aggravated further after the RBA Governor Philip Lowe - speaking at the Economic Society of Australia Business Lunch in Brisbane this Tuesday, sounded dovish over the labour market/growth data and said that the central bank will consider the case for lower interest rates at its June policy meeting. The pair weakened back below the 0.6900 handle and was further pressurized by a modest US Dollar uptick, which remained supported by higher US Treasury bond yields. In fact, the yield on the benchmark 10-year US government bond climbed to over one-week tops after the Fed Chair Jerome Powell said that it was premature to make a judgment about the impact trade and tariff issues could have on monetary policy and dampened rate cut hopes. It would now be interesting to see if the pair is able to find any buying interest at lower levels or the ongoing slide marks the resumption of the prior/well-established bearish trend amid the recent escalation in the US-China trade tensions and relatively thin US economic docket - featuring the only release of existing home sales data, later during the early North-America session.Technical levels to watch 

According to analysts at TD Securities, the RBA Minutes/Governor speech surprised no-one with a dovish tilt via two triggers for a rate cut (1) spare

According to analysts at TD Securities, the RBA Minutes/Governor speech surprised no-one with a dovish tilt via two triggers for a rate cut (1) spare capacity in the labour market; and (2) sluggish consumer spending.Key Quotes“While we don't think last week's labour market report was as dire as some claimed, and we see consumers spending the upcoming tax cuts under a Coalition government, the RBA all-but admitted that they should have cut on 7 May.” “June is fully priced for a cut, and unlike the surprise pause in May, it seems that a June cut is more likely. A second cut is also priced - and was embedded in the SoMP forecasts - it is just down to timing. So we look for a June cut and leave August as the next timing for now, for a terminal rate of 1%.”  

Turkey Consumer Confidence: 55.3 (May) vs previous 63.5

Robert Rennie, analyst at Westpac, suggests that Westpac is now forecasting a rate cut from RBA in June and August, versus August and November. Key Qu

Robert Rennie, analyst at Westpac, suggests that Westpac is now forecasting a rate cut from RBA in June and August, versus August and November.Key Quotes“Given the clear guidance in the RBA minutes from the May meeting released today that "in the scenario where there was no further improvement in the labour market in the period ahead ... a decrease in the cash rate would likely be appropriate" and then in today's Lowe speech that "at our meeting in two weeks' time, we will consider the case for lower interest rates", its arguably the case that the FX market would be surprised if the RBA does not deliver a rate cut on June 4.” “Our fair value framework continues to be helpful in trying to understand what this means for the A$, especially given the backdrop of sharply rising iron ore prices and recovering iron ore export volumes. Even with the highest level for iron ore back to May 2014, the midpoint of our fair value model has dropped by 2.75% in the last 5 weeks (0.7220 down to 0.7018) as markets have moved from circa 25% priced to circa 90% priced for a cut in June.” “Given the backdrop of the recent moves by Trump to 'clear the decks' on trade/ tension with Europe and Japan but at the same time 'double down' on pressure on China, we remain of the view that the A$ should continue to be capped by the midpoint of our fair value model. This strategy has served us well so far this year - with the A$ not closing above the mid-point since early December. This then argues that the A$ should remain capped on strength towards 0.70 and we remain focussed on further weakness down to our long held 0.68 target.”  

The sentiment around the European currency remains subdued in the second half of the month, with EUR/USD now reversing Monday’s uptick and refocusing

EUR/USD moves lower and returns to the mid-1.1100s.The greenback appears bid early in Europe.ECB’s De Guindos is due to speak later in the session.The sentiment around the European currency remains subdued in the second half of the month, with EUR/USD now reversing Monday’s uptick and refocusing on the 1.1150 region.EUR/USD looks to trade, ECBSpot is navigating the lower end of the recent range following last week’s sharp sell off, while some decent contention appears to have emerged near 1.1150 for the time being. In the meantime, the US-China trade dispute continues to drive the mood around the global markets despite the lack of fresh headlines as of late. In this regard, news around Chinese blue chip Huawei has grabbed all the attention in past hours. In addition, spot remains vigilant on the renewed geopolitical effervescence around US and Iran, which should keep the demand for safer assets well and sound. Later in the session, ECB’s VP L.De Guindos will speak at ‘The International Financial Services Forum 2019’ in London in an otherwise empty docket in Euroland, Across the pond, April’s Existing Home Sales and speeches by FOMC’s Evans and Rosengren should keep the focus on the buck.What to look for around EURRecent data releases in Euroland and Germany have poured cold water over the idea that some healing process could be under way in the region, re-shifting the focus to the ongoing slowdown and its probable duration and extension. In the meantime, the current ‘neutral/dovish’ stance from the ECB is expected to persist for the remainder of the year and probable through H1 2020. The broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with the now stalled US-China negotiations and potential US tariffs on EU products. On the political front, Italy has re-emerged as a source of uncertainty and volatility, while investors’ focus has now shifted to the EU parliamentary elections next week.EUR/USD levels to watchAt the moment, the pair is losing 0.12% at 1.1152 and faces the next support at 1.1135 (low May 3) seconded by 1.1109 (2019 low Apr.26) and finally 1.0839 (monthly low May 2017). On the other hand, a break above 1.1239 (55-day SMA) would target 1.1264 (high May 1) en route to 1.1302 (100-day SMA).

Amena Bakr, a Senior Correspondent at Energyintel and Ex-Reuters Energy Correspondent, notes the tentative dates being considered for the OPEC meeting

Amena Bakr, a Senior Correspondent at Energyintel and Ex-Reuters Energy Correspondent, notes the tentative dates being considered for the OPEC meeting in Vienna. Amena says that the meeting could be held either on July 1-2 or June 22-23.

In view of Karen Jones, analyst at Commerzbank, EUR/USD pair has recently failed at the 55 day moving average at 1.1241 and remains on the defensive.

In view of Karen Jones, analyst at Commerzbank, EUR/USD pair has recently failed at the 55 day moving average at 1.1241 and remains on the defensive.Key Quotes“While we remain unable to rule out a test of the 1.1110 April low, we look for this to hold. We note the 13 count on the 60 minute chart but suspect that we need to regain 1.1200 in order to alleviate immediate downside pressure.” “Be advised that as long as 1.1110 holds, though, the pattern being traced out is a potential large bullish reversal pattern. Overhead lie the 55- and 100-day moving averages at 1.1241 and 1.1304 as well as the September-to-May resistance line at 1.1321. Further up meanders the 200 day moving average at 1.1391.” “Support at 1.1110 is regarded as the break down point to the 2018-2019 support line at 1.1096 and the 1.0814 78.6% Fibonacci retracement.”

Advanced figures for JPY futures markets noted open interest rose by 908 contracts at the beginning of the week, at the same time reversing 7 consecut

Advanced figures for JPY futures markets noted open interest rose by 908 contracts at the beginning of the week, at the same time reversing 7 consecutive daily drops, according to CME Group. On the other hand, volume extended the erratic performance and shrunk by around 37.2K contracts.USD/JPY rallies could be limitedThe ongoing recovery in USD/JPY has reached the critical handle at 110.00 the figure. A small build in open interest could lend some momentum to the safe haven currency and spark a correction lower in spot.

Denmark Consumer Confidence up to 5.9 in May from previous 3.7

While sustained trading below 61.8% Fibonacci retracement of March month upside portrays GBP/USD weakness, repeated refrain to slip under 1.2700 round

Sustained trading below 61.8% Fibo favors bears.Oversold RSI and 1.2700 questions further downside.While sustained trading below 61.8% Fibonacci retracement of March month upside portrays GBP/USD weakness, repeated refrain to slip under 1.2700 round-figure question sellers as the quote flashes 1.2720 figure ahead of the London open on Tuesday. Oversold levels of 14-day relative strength index (RSI) could also be considered as an additional challenge to the bears. As a result, chances of the pair’s pullback towards February month low near 1.2770 and then to 61.8% Fibonacci retracement level adjacent to the 1.2800 round-figure seem brighter. Given the buyer's ability to cross 1.2800 resistance, April month low near 1.2865, 50% Fibonacci retracement near 1.2915 and 200-day simple moving average (SMA) around 1.2960 could become their favorites. If at all bears manage to conquer 1.2700 round-figure, January 15 bottom around 1.2670, and 1.2600 can mark their presence on the chart. Additionally, pair’s extended downturn beneath 1.2600 can avail intermediate halt at January 02 low of 1.2580 ahead of revisiting January month low near 1.2440.GBP/USD daily chartTrend: Pullback expected  

The official results announced by the Indonesia’s General Elections Commission in Jakarta early on Tuesday, showed that Indonesian incumbent Presiden

The official results announced by the Indonesia’s General Elections Commission in Jakarta early on Tuesday, showed that Indonesian incumbent President Joko Widodo won last month’s bitterly contested election by a double-digit margin.Key Details (via Bloomberg):Widodo, known as Jokowi, won 55.5% of the national vote, compared to his challenger Prabowo Subianto’s 44.5% Jokowi’s margin of victory at 11 percentage points was almost double the lead he secured in 2014 against the same opponent The tally also confirmed unofficial quick count results from about a dozen independent pollsters. Prabowo, as Subianto is commonly known, has alleged irregularities in the conduct of the election and vowed to reject the official results.  Since the official election outcome was already priced-in by the markets, the Indonesian Rupiah keeps the offered tone intact, with USD/IDR now printing fresh four-month tops at 14,475.

Open interest in GBP futures markets from CME Group saw investors adding around 7K contracts to their open interest positions on Monday, clinching the

Open interest in GBP futures markets from CME Group saw investors adding around 7K contracts to their open interest positions on Monday, clinching the sixth build in a row. On the other hand, volume decreased by around 15.3K contracts.GBP/USD focused on 1.2670Cable continues its march south unabated so far this week and still targets the 1.2670 region amidst the persistent uptrend in open interest. Choppy activity in volume, however, could slow the pace of the expected downside.

According to Richard Franulovich, head of FX strategy at Westpac, there has been notable divergence in the AUD’s two core drivers lately; yield spread

According to Richard Franulovich, head of FX strategy at Westpac, there has been notable divergence in the AUD’s two core drivers lately; yield spreads have been trending decisively against the currency while commodity prices have been trending in its favour.Key Quotes“Australia is not alone. A similar divergence between commodity prices and interest rate differentials is also apparent in New Zealand and Canada.” “Both NZD and CAD, like AUD, have defied their terms of trade for many months. On commodity prices alone AUD, CAD and NZD are all notably undervalued.” “Supply-side factors have been important drivers of the rise in Australia, NZ and Canada’s terms of trade, i.e. Vale disruptions in the case of iron ore and OPEC supply restraint in the case of oil. It may be the case that markets are looking through the supply driven gains in AUD, CAD and NZD’s terms of trade. The other factor is that global growth risks remain elevated thanks to trade frictions, despite elevated commodity prices.” “Against that AUD, NZD and CAD do not offer any yield pick up over the US. The 10yr spread for AUD, NZD and CAD versus the US have converged recently around the -60bp to -75bp range. As a group the three currencies have never offered such a lack of yield relative to the US, with the average spread across all the three currencies the most negative on record.”

Danske Bank analysts suggest that in light of another day of only tier-2 data releases, political headlines - be it the US-China trade spat or Brexit

Danske Bank analysts suggest that in light of another day of only tier-2 data releases, political headlines - be it the US-China trade spat or Brexit - will remain in focus today.Key Quotes“In the UK, PM Theresa May will convene a cabinet meeting today to consider how to respond to the collapse of the cross-party talks with Labour.” “In the Euro area, consumer confidence data for May is on the agenda. Domestic demand, especially private consumption, was an important growth driver in Q1 as consumer sentiment recovered some ground after the H2 18 weakness. We will look for any signs that this trend might go into reverse amid the latest trade war escalation.” “Central bankers will also be on the wires today, with ECB Vice President De Guindos speaking in London and the Fed's Evans and Rosengren discussing the economy and monetary policy.” “Overnight to Wednesday, Japanese export figures for April are due out and will shed some light on where the Japanese export sector is heading after the surprisingly strong Q1 GDP figures released yesterday.”  

In light of CME Group’s flash data for EUR futures markets, open interest rose for the third session in a row on Monday, this time by nearly 3.1K cont

In light of CME Group’s flash data for EUR futures markets, open interest rose for the third session in a row on Monday, this time by nearly 3.1K contracts. Volume, instead, shrunk by almost 35.8K contracts, reversing the previous build.EUR/USD still looks to 1.1100Positive price action in EUR/USD at the beginning of the week was accompanied by rising open interest, allowing for a continuation of the recovery, at least in the near term. However, the moderate drop in volume could keep occasional bullish attempts capped.

FX option expiries for May 21 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1100 680m - USD/JPY: USD amounts 10

FX option expiries for May 21 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1100 680m  - USD/JPY: USD amounts 109.50 450m 110.00 375m - USD/CAD: USD amounts 1.3300 510m 1.3450 1.2bn

Analysts at ANZ note that the Australia’s ANZ-Roy Morgan Consumer Confidence reversed the previous week’s loss as all the sub-indices were positive. K

Analysts at ANZ note that the Australia’s ANZ-Roy Morgan Consumer Confidence reversed the previous week’s loss as all the sub-indices were positive.Key Quotes“The survey coincided with the election, so much of the gain likely reflects the impact of the surprise win by the Coalition.” “Current financial conditions rose by 0.5%, while future financial conditions were up 1.2%.” “Economic conditions, which were responsible for much of the previous week’s fall, were also in positive territory. Current economic conditions were up 3.8%, compared to a fall of 8.1% previously, while future economic conditions were up 0.9%.” “The ‘time to buy a household item’ also rose significantly; it was up 4.1% to its highest level since the end of March. The four-week moving average for inflation expectations was down by 0.1 ppt to 4.1%.”

Shares on Asian bourses remained mostly directionless on Tuesday amid mixed moves by global politics and central banks like the RBA and the Fed.

Mixed signals from politics question bearish indication from the RBA.Markets could remain less volatile due to the thin economic calendar.Shares on Asian bourses remained mostly directionless amid mixed moves by global politics and central banks like the RBA and the Fed. While news of the US giving temporary relief to China’s Huawei and the US President Donald Trump’s readiness to talk to Iran could have played an upside tune, dovish bias over incoming economics by the Reserve Bank of Australia’s (RBA) Governor Stephen Lowe and no strong monetary policy signal from the Federal Reserve Chairman Jerome Powell muted the sentiment while heading into to European session. However, MSCI’s index of Asia Pacific stocks ex-Japan managed to remain up from Friday’s four-month low whereas Japan’s Nikkei was losing nearly 0.12% by the press time. Australia’s ASX200 was almost unchanged as the US-China trade tension tamed market happiness based on the RBA minutes and the Governor’s speech indicating June rate cut. On the other hand, New Zealand’s NZX 50 was close to -0.15% as doubts over the economics of its largest trading partner, Australia, joined weaker than expected credit card spending at home. Moving on, India’s BSE Sensex seems to cheer exit polls that support the claim of the present BJP government’s re-election while China’s Hang Seng also is in positive to +0.22% based on the latest news from the US. The Wall Street marked losses due to yesterday’s pessimism concerning the US-China trade relations and likely chances of the US-Iran war. Among them, Nasdaq declined more due to its emphasis on technology shares that are under scan after latest Huawei saga. Risk tone remained mostly unchanged as the global barometer of market sentiment 10-year treasury yields from the US remained to cling to 2.42% during the Asian session. The economic calendar has lesser details to entertain momentum traders but global politics and comments from the FOMC members could offer intermediate trade opportunities going forward.

The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, is reversing Monday’s pullback and has retaken the 98.00 n

DXY pushes higher and reclaims the 98.00 handle.Yields of the US 10-year note climb to highs near 2.43%.Existing Home Sales, Fedspeak next of relevance in the docket.The US Dollar Index (DXY), which tracks the greenback vs. a bundle of its main competitors, is reversing Monday’s pullback and has retaken the 98.00 neighbourhood.US Dollar Index looks to trade, FedspeakersThe index has managed to leave behind a negative start of the week and is now refocusing on the topside, with the 98.00 handle back on the radar. In the meantime, the buck is trading within a cautious range amidst lack of fresh headlines around the US-China trade front, while the current centre of the debate seems to by gyrating around the Chinese telecom giant Huawei after the White House blacklisted it. In the US data sphere, Existing Home Sales for the month of April is due later in the NA session, while Chicago Fed C.Evans (voter, dovish) will discuss Economy and Monetary Policy and Boston Fed E.Rosengren (voter, centrist) will speak to the Economic Club of New York. Yesterday, Chief J.Powell said it is still early to gauge the impact of tariffs on the economy and the Fed’s monetary policy. He added that the Fed will consider an inflation range rather than a 2% goal.What to look for around USDWith the US-China trade talks mired in the mud for the time being, investors’ attention have now shifted to the Chinese government and the likeliness of intervention in the Yuan, as the currency slowly approaches the psychological 7.00 mark without any progress in the negotiations, at least in the short-term horizon. On another direction, inflation figures remain in the centre of the debate among Fed members despite the solid labour market and healthy fundamentals, preventing the Fed from fully ruling out a rate hike later in the year. The positive outlook on the buck, however, stays unchanged and sustained by overseas weakness, its safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency.US Dollar Index relevant levelsAt the moment, the pair is gaining 0.09% at 98.01 and faces the next up barrier at 98.10 (high May 3) seconded by 98.32 (2019 high Apr.25) and finally 98.97 (78.6% Fibo of the 2017-2018 drop). On the other hand, a break below 97.70 (21-day SMA) would open the door for 97.23 (55-day SMA) and then 97.03 (low May 13).

The mood across the fx board in Asia this Tuesday remained cautiously optimistic, with the US equity futures advancing amid easing concerns over the U

The mood across the fx board in Asia this Tuesday remained cautiously optimistic, with the US equity futures advancing amid easing concerns over the US-China trade dispute. Markets breathed a sigh of relief after the US announced to scale back some restrictions on China’s Huawei Technologies. Therefore, the Yen traded on the back foot, sending the USD/JPY pair back towards the two-week tops of 110.32. But further upside lacked momentum amid mixed Asian equities and rising US-Iran geopolitical tensions. In contrast, the Antipodeans failed to benefit from the improved risk tones, as the Reserve Bank of Australia’s (RBA) outright dovish shift dampened the sentiment. The AUD/USD pair stalled its surprise election outcome induced rally and fell sharply below the 0.69 handle after both the RBA May meeting minutes and Governor Lowe hinted at a June rate cut amid concerns over the Australian labor market. The Kiwi also snapped gains and returned to the red zone just ahead of the 0.6500 level. Meanwhile, the Loonie traded flat near 1.3430 levels, unfazed by the renewed uptick in oil prices following the US President Trump’s fresh threats on Iran. Among other commodities, gold futures on Comex traded depressed near 1275, despite the Fed Chair Powell’s comments on the increased bank debt levels. Amongst the European currencies, the EUR/USD pair traded weaker near 1.1150 levels while the Cable remained capped in a tight range below 1.2750 barrier, as markets ignored the latest Brexit optimism.   Main Topics in AsiaUS-China trade updatesU.S. Commerce Department scales back restrictions on Huawei – Reuters Huawei’s Founder: US’s temporary reprieve does not mean much for HuaweiOther Key HeadlinesTrump: Iran has been very hostile - WTI pops to $63.39 Asian high Iran’s President Rouhani: “I favor talks and diplomacy but under current conditions I do not accept it.” Powell speech: Comparison of current business debt levels to subprime mortgage crisis “not fully convincing” Powell Speech: Outlook of trade talks is unknown, premature to judge Japan’s Aso: GDP at 2.1% and two quarters of growth is not bad Gold trades quiet in Asia even though Fed’s Powell warns on corporate debt Australia's re-elected Govt to miss tax break deadline, RBA June rate cut done deal? BOJ’s Kuroda: BOJ is buying bonds to achieve price target RBA minutes: Rate cut would be appropriate if no further improvement in labor market, Aussie turns lower RBA’s Lowe: To consider a rate cut at June meeting, Aussie gives up 0.6900 Key Focus Ahead Heading into Europe, the calendar remains a thin-showing, with the UK CBI industrial orders survey, due at 1000 GMT, only of relevance. Therefore, attention turns towards the US existing home sales due at 1400 GMT. At the same time, the Eurozone consumer confidence numbers will be reported. New Zealand’s GDT price index is also due on the cards around 1400 GMT. Later at 2130 GMT, the API weekly crude stocks data will be published that will offer some fresh impetus to oil prices. Besides the macro data, the speeches by the FOMC members Evans and Rosengren will hog some limelight. Also, developments surrounding the UK political scenario and US-China trade dispute will also continue to influence the fx trades. EUR/USD: Snaps five-day losing streak, 5-day MA capping upside The FX desks may offer US Dollar, helping EUR/USD rise to 1.12 if the risk appetite continues to improve in Europe. That said, Eurozone issues could play a spoilsport.  GBP/USD refrains from further declines amid UK’s political optimism Given the latest swift in British politics and lack of data from the UK, investors are more likely to follow qualitative factors concerning Brexit, US-China and US-Iran topics in order to determine near-term trade sentiment. Japan’s Motegi: Japan-US to hold working level trade talks today Japanese Economy Minister Motegi is on the wires now, via Reuters, noting that Japan and the US will hold working-level trade talks today. USD/INR forecast: A majority for BJP-led NDA would be positive for Rupee, but upside limited The USD/INR pair will likely see big losses on Thursday only to bottom out in the next week or two if the BJP-led NDA gets a clear majority as expected. It is worth noting that the BJP victory is being priced in since the end of February.  Anti-EU populism rise not priced in the EUR, European election could hit Euro The European Union is holding its Parliamentary election next Sunday May 26th and the impact of this political event seems to be underpriced by currency markets.  

Analysts at ANZ point out that the New Zealand economy has been losing steam for a while now and think that this process has a little further to run.

Analysts at ANZ point out that the New Zealand economy has been losing steam for a while now and think that this process has a little further to run.Key Quotes“There are enough positive growth drivers out there to put a floor under the slowdown by year end, and support a gradual acceleration in growth thereafter. One of these bright spots is the additional monetary stimulus provided by the RBNZ when it cut the OCR in May.” “While lower interest rates (and the recent depreciation of the NZD) will support growth, we think a little more stimulus will be required to see inflation lift sustainably to the RBNZ’s target mid-point.” “We’ve pencilled in another 25bp cut for November with a follow up move in February. However, the global data has turned a bit patchy of late. A materialisation of global risks into tangible consequences (eg for commodity prices) would see us bring forward our expectation for the timing of the next OCR cut.”

Gradual recovery from 109.00 seems struggling to clear immediate resistance area as USD/JPY trades near 110.20 ahead of Europe open on Tuesday. Low of

Buyers rejected at immediate resistance-zone ahead of a trend-line barrier to the north.The steady increase from 109.00 portrays strength in upside momentum.Gradual recovery from 109.00 seems struggling to clear immediate resistance area as USD/JPY trades near 110.20 ahead of Europe open on Tuesday. Low of May 06 and highs marked afterward portray 110.30/35 as strong upside resistance for the pair near 38.2% Fibonacci retracement of its April to May downturn. Should prices manage to clear 110.35 barriers, a run-up to descending trend-line stretched since April 24, at 110.55 can’t be denied. Also, pair’s successful trade beyond 110.55 enables it to question 50% Fibonacci retracement level near 110.75 and 111.00 round-figure. On the flipside, an upward sloping support-line from May 15 can limit the quote’s immediate declines near 109.80. If sellers dominate past-109.80, 109.50 and 109.00 could come back to the charts.USD/JPY 4-Hour chartTrend: Pullback expected  

Analysts at TD Securities note that the Atlanta Fed President Raphael Bostic indicated he sees no need to adjust the policy rate and that chances for

Analysts at TD Securities note that the Atlanta Fed President Raphael Bostic indicated he sees no need to adjust the policy rate and that chances for an interest rate hike or cut are equally likely.Key Quotes“His comments go hand-in-hand with Vice Chair Richard Clarida, who stated the US economy is operating at or close to the Fed's dual mandate objectives.” “These comments would suggest Fed officials are likely to maintain its policy stance unchanged for now, in contrary to market expectations of at least one rate hike this year. That said, St. Louis Fed President James Bullard noted that one of the conditions to lower rates, in his view, would be in a scenario where core inflation remains persistently below the Fed's 2% target. Core inflation is currently at 1.55% y/y but we expect it to tick above 1.6% in the April report.”

ANZ analysts note that the Thailand’s GDP expanded by 2.8% y/y in Q1, the weakest performance in four years. Key Quotes “The decline in exports was a

ANZ analysts note that the Thailand’s GDP expanded by 2.8% y/y in Q1, the weakest performance in four years.Key Quotes“The decline in exports was a key drag, but private consumption and investment growth also slowed. Looking ahead, the economy faces multiple pressure points, ranging from weak external demand to domestic political uncertainty.” “For full year 2019, our growth forecast is 3.2%, lower than the national economic planning agency’s revised projection of 3.3-3.5%. We expect the Bank of Thailand (BoT) to keep its policy rate on hold through 2019 and 2020, with the balance of risks tilted towards a cut.”

Bill Evans, analyst at Westpac, notes that the minutes of the May RBA Board meeting confirm that the Board holds a clear easing bias. Key Quotes “This

Bill Evans, analyst at Westpac, notes that the minutes of the May RBA Board meeting confirm that the Board holds a clear easing bias.Key Quotes“This is spelt out when the technical assumption that the cash rate followed the path implied by market pricing is used in the forecast.” “As the minutes note “financial market pricing implied that the cash rate was expected to be lowered by 25bps within the next three months and again by the end of 2019”.” “The Board notes that “without an easing in monetary policy over the next six months, growth and inflation outcomes would be expected to be less favourable than the central scenario”.” “On February 21, Westpac forecast that the RBA would cut the cash rate in two 25bps tranches in August and November. These forecasts have not changed since then. Subsequently, markets and most forecasters have moved largely towards the Westpac view of two cuts. Indeed, we are pleased that markets now fully pricing in 50bps of cuts by November.”  

Netherlands, The Consumer Confidence Adj unchanged at -3 in May

Netherlands, The Consumer Spending Volume increased to 1.1% in March from previous 0.9%

With the recent change in political environments at the UK, the GBP/USD pair is taking the bids near 1.2730 while heading into the London open on Tuesday.

Not only UK PM May but senior British personalities also trying hard to turn down no deal Brexit.Qualitative catalysts to remain in the spotlight due to a lack of economic data/events.With the recent change in political environments at the UK, the GBP/USD pair is taking the bids near 1.2730 while heading into the London open on Tuesday. The Cable weakened off-late as the British PM Theresa May could neither gain any solution from the cross-party Brexit talks nor please lawmakers with the promise to present a “new, bold offer” with “an improved package of measures”. As per the BBC report, leaked documents suggesting no major changes in the PM May’s Brexit proposal that will be up for voting in the UK Parliament during the week starting from June 03. However, the sentiment changed after some of the top-tier British personalities like Finance Minister Philip Hammond, Foreign Secretary Jeremy Hunt and the Bank of England’s (BOE) Deputy Governor for monetary policy Ben Broadbent warned lawmakers of negative consequences of no-deal Brexit. The UK PM May is also on her best efforts to gather support from Tory members while her Irish friends stand firm during the tough time. Given the latest swift in British politics and lack of data from the UK, investors are more likely to follow qualitative factors concerning Brexit, US-China and US-Iran topics in order to determine near-term trade sentiment.Technical AnalysisRepeated failures to slip beneath 1.2710 can trigger the quote’s upside momentum targeting February month low near 1.2770 and then the 1.2800 round-figure. Should there be a downside under 1.2710, sellers may wait for a sustained dip below 1.2700 to aim for January 15 bottom around 1.2670 and 1.2600 numbers to the south.

EUR/USD rose 0.10% on Monday, putting an end to the slow five-day losing streak on the back of broad-based USD selling. The greenback lost ground in t

EUR/USD scored marginal gains on Monday, ending the five-day losing streak. The 5-day MA capped gains in Asia. The currency pair may pick up a bid if the risk appetite improves, as suggested by the uptick in the S&P 500 futures.  EUR/USD rose 0.10% on Monday, putting an end to the slow five-day losing streak on the back of broad-based USD selling.  The greenback lost ground in the North American session yesterday after the Chicago Fed National Activity index came in at -0.45 for April, missing consensus estimates.  The gains in the EUR/USD, however, were marginal as the US stocks declined on the deepening US-China trade tensions. Also, the yield on the 10-year treasury yield gained three basis points despite the weak data, keeping the EUR/USD gains under check. Fed’s Powell sounded cautious on the corporate debt and its potential negative effects on the economy, in the overnight trade, but failed to move the needle in the FX markets. The currency pair is currently trading at 1.1163, having faced rejection at the descending (bearish) 5-day moving average (MA) of 1.1172 in Asia. The Eurozone data docket is light today. As a result, the currency pair is at the mercy of the broader market sentiment, which is showing some signs of recovery with Chinese stocks gaining ground on US’ decision to temporarily ease restrictions imposed on China’s Huawei. The S&P 500 futures are also up 0.4% at press time.  The FX desks may offer US Dollar, helping EUR/USD rise to 1.12 if the risk appetite continues to improve in Europe. That said, Eurozone issues could play a spoil sport. Recent data releases in Eurozone and Germany have poured cold water over the idea that some headline process could be under way, as stated by FXStreet’s Pablo Piovano.  Further, Italy’s fiscal issues have made a comeback in the last few days. EUR/USD will likely face selling pressures despite a potential risk-on in equities if the Italy-German yield differential widens. The spread between the Italy and German 10-year government bond yields was 333 basis points on Monday, having hit a high of 344 basis points last week. Pivot points 

More comments flowing in from the RBA Governor Lowe, as he now responds to the Lowe Q&A following his speech. “We do have an easing bias.” “Will take

More comments flowing in from the RBA Governor Lowe, as he now responds to the Lowe Q&A following his speech. “We do have an easing bias.” “Will take some time to get inflation above 2%.” “Govt policies important for growth.”

With the failure to cross 1.0600 round-figure joining dovish comments from the RBA Governor Stephen Lowe, AUD/NZD drops towards 1.0520/15 support-zone.

RBA’s Lowe cited downside risk to incoming data while highlighting probabilities for June rate cut.1.0520/15 might hold the declines confined, as it has been since early-April.With the failure to cross 1.0600 round-figure joining dovish comments from the Reserve Bank of Australia’s (RBA) Governor Stephen Lowe, AUD/NZD drops to 1.0565 ahead of the European open on Tuesday. The quote now signals brighter chances to revisit the 1.0520/15 horizontal area comprising early-April high and mid-May lows, a break of which can extend its downturn towards 1.0500 and 1.0470 rest-points. During the pair’s decline under 1.0470, 61.8% Fibonacci retracement of its March to April upside, at 1.0450, seems crucial for sellers as it holds the gate for further south-run to 1.0400 and 1.0370 supports. Alternatively, an upside clearance of 1.0600 may propel the pair to confront 23.3% Fibonacci retracement level near 1.0630 whereas 1.0670 might question buyers afterward. Given the pair’s extended rise beyond 1.0670, 1.0700 and April month high around 1.0735 could be bull’s favorites.AUD/NZD 4-Hour chartTrend: Mild downturn expected  

The AUD/USD pair dropped to the day’s low near 0.6890 after Governor of the Reserve Bank of Australia (RBA) favored rate cut during early Tuesday.

The RBA Governor considered cutting interest rates at June policy meeting.Risk events and trade news could offer near-term direction.The AUD/USD pair dropped to the day’s low near 0.6890 after Governor of the Reserve Bank of Australia (RBA) favored rate cut in his speech at the Economic Society of Australia Business Lunch, in Brisbane during early Tuesday. Mr. Lowe also conveyed bearish bias for the labor market and growth data. The pair recently witnessed pullback as minutes of the RBA’s May 07 minutes failed to include a statement that mentions near-term neutral policy bias by the central bank. The minute statement also emphasized employment data to be a signal for the next policy moves. The latest labor market data from Australia has been negative and indicates a rate-cut from the Aussie central bank even if it avoided the same in its latest minutes. The Aussie has often being considered as a risk barometer of the market and earlier gained after the US announced some relief to the trading partners of China’s Huawei. Risk sentiment was further brightened by the US President’s readiness to talk with Iran; though, with threats to the Middle East nation. The 10-year yield of the US government bond, another indicator of the market’s risk tone, has so far been positive around 2.42% since early Tuesday. Looking forward, the US monthly existing home sales data for April and developments surrounding the US-China trade deal might offer fresh directives to traders. As per the latest forecasts, the US housing market figure could rise to 5.33 million from 5.21 million prior.Technical AnalysisFailure to clear 8-week old trend-line resistance, at 0.6940, continue signaling brighter chances for the pair’s run down to 0.6880 and 0.6860 whereas January 2016 low surrounding 0.6830 could please sellers then after. In a case of sustained break beyond 0.6940, the quote can extend recovery towards 0.7000, 0.7030 and 0.7055 numbers to the north.

RBA Gov Lowe: To consider a rate cut at June meeting, Aussie gives up 0.6900

  The latest comments are crossing the wires from the Reserve Bank of Australia (RBA) Governor Philip Lowe, as he speaks on the topic “The Economic Outlook and Monetary Policy” at ESA QLD 2019 business lunch.Key Headlines:To consider a rate cut at June meeting, Aussie gives up 0.6900. Lower rates would support employment, help lift inflation toward target. Need further improvement in labour market, jobless rate to fall under 5%. Economy can support unemployment rate under 5% without inflation concerns. Says recent data make it less likely labour market will surprise on upside. Our forecasts for growth, jobs would have been softer without assumption of rate cuts. Also scope for fiscal policy, structural reform to boost employment. Looking for tax relief to help lift household income growth. Sees only limited inflation pressures across much of the economy.

Singapore Gross Domestic Product (QoQ) above forecasts (2.3%) in 1Q: Actual (3.8%)

With a week-long descending trend-line challenging its near-term upside bias, the USD/IDR pair trades near 14,460 during early Tuesday.

A month-old ascending channel portrays the pair’s strength.Immediate downward sloping trend-line questions the upside momentum.With a week-long descending trend-line challenging its near-term upside bias, the USD/IDR pair trades near 14,460 during early Tuesday. The pair has been following an upward sloping trend-channel formation since late-April but its latest trading pattern gives rise to an immediate resistance-line on H4. As a result, 14,520 can act as immediate resistance for the pair ahead of 14,580 and the channel’s upper-line of 14,640. Should there be increased upside past-14,640, the quote can extend its north-run towards 14,665 and 14,720. Meanwhile, a downside break of channel-support, at 14,410 now, can trigger fresh declines in the direction to 61.8% Fibonacci retracement of late-April upside, at 14,300. Given the bears’ refrain from respecting 14,300 rest-point, 14,180 and 14,100 can offer intermediate stops to the downturn targeting 14,000 mark.USD/IDR 4-Hour chartTrend: Pullback expected  

New Zealand’s Finance Minister Grant Robertson reportedly said that “it’s time to cheer up the economy.” Nothing further is reported so far. The NZ tr

New Zealand’s Finance Minister Grant Robertson reportedly said that “it’s time to cheer up the economy.” Nothing further is reported so far. The NZ traders eagerly await the fortnightly GDT dairy auction results due later today around 1400 GMT. The Kiwi trade modestly flat near 0.6535 levels, lacking direction amid dovish RBA minutes and US-China trade optimism.

The Wall Street Journal (WSJ) carries a report, citing that Google has halted its plan to shut out Huawei’s access to the apps. A source familiar with

The Wall Street Journal (WSJ) carries a report, citing that Google has halted its plan to shut out Huawei’s access to the apps. A source familiar with the matter told Reuters on Sunday that Alphabet Inc’s Google has suspended business with Huawei that requires the transfer of hardware, software and technical services except those publicly available via open source licensing. Meanwhile, earlier on the day, the US Commerce Department announced that is creating a 90-day temporary general license till August 19 to scale back the restrictions for Huawei and 68 entities, Reuters reported.

The minutes of the Reserve Bank of Australia’s May 7 monetary policy meeting released soon before press time said a rate cut would be appropriate if t

AUD/USD hits session low of 0.6905 after RBA minuets. The dovish set of RBA minutes confirms the central bank is closing on rate cuts, as expected by markets.The minutes of the Reserve Bank of Australia’s May 7 monetary policy meeting released soon before press time said a rate cut would be appropriate if the labor market shows no further improvement, sending the AUD/USD pair down by 20 pips to a session low of 0.6905.  The minutes also dropped the line that the board saw “no strong case” for the near-near-term policy move, while adding that the outlook would be less favorable without an easing in policy over the next six months.  Further, the minutes stated that risks to the household consumption growth and global economy are tilted to the downside. All-in-all, the dovish set of minutes released today confirm the central bank is closing on rate cuts and will likely deliver at least two in the next seven months.  The markets, however, have already priced in the move. As a result, the AUD may defend the 0.69 handle for now, although worsening of risk sentiment due to deepening Us-China trade tiff could send the pair well below the psychological support during the day ahead. As of writing, the pair is trading at 0.6910.Pivot points 

The AUD/JPY pair dropped to revisit 76.00 mark after minutes of the Reserve Bank of Australia’s (RBA) latest monetary policy meeting on early Tuesday.

RBA minutes emphasize labor market numbers to determine the next policy move.Statements like "No strong case" for a near-term change in policy were ignored by the sellers.The AUD/JPY pair dropped to revisit 76.00 mark after minutes of the Reserve Bank of Australia’s (RBA) latest monetary policy meeting highlighted the importance of labor market data to determine its next moves on early Tuesday. In addition to emphasizing employment data for further moves, which are soft off-late, another dovish sign could be received from the minutes’ drop of statements like "No strong case" for a near-term change in policy. The pair have been positive off-late as not only Australia’s general election results pleased buyers but temporary relief to China’s Huawei by the US Commerce Department also played its role. The risk tone reacted positively to the aforementioned events, in addition to the US President Donald Trump’s readiness to talk to Iran, during early Tuesday. The global barometer of risk sentiment, the US 10-year treasury yield, gains more than one basis points to 2.426% by the press time. It should also be noted that the latest comments from Japanese policymakers did little to disturb the pair buyers. Looking forward, lack of economic data/events could keep investors stick to political news headlines for fresh impulse. Among them, the US-China and the US-Iran stories could get higher attention.Technical AnalysisA sustained break of three-week-old descending trend-line, around 76.35/40 now, becomes necessary for the quote to aim for May 10 highs near 77.30 and then target 78.00 round-figure during further upside. Alternatively, 75.70, 75.30 and 75.00 can confine the pair’s near-term declines ahead of shifting sellers’ attention to July 2016 bottom near 74.60.

The Reserve Bank of Australia (RBA) published the minutes of its May 7 2019 monetary policy meeting on Tuesday, with the key headlines found below. “R

The Reserve Bank of Australia (RBA) published the minutes of its May 7 2019 monetary policy meeting on Tuesday, with the key headlines found below.   “Rate cut would be appropriate if no further improvement in labor market.” Australia central bank board agreed further drop in jobless rate would be consistent with inflation target. Important to pay close attention to labour market over period ahead. Minutes drop line that board saw "no strong case" for a near-term move in policy. Board noted economic forecasts were based on market assumption of lower rates. Outlook would thus be less favourable without an easing in policy over next 6 months. Board recognized lower rates would have less of an impact than in the past. But lower rates would still put downward pressure on a$, reduce mortgage repayments. The AUD at lower end of range of last couple of years, falling yields offset firm commodity prices. Some leading indicators of labor demand had eased, outlook more mixed. Forecasts saw spare capacity in the labor market for next couple of years. Q1 inflation noticeably lower than expected, housing having disinflationary effect. Risks to household consumption growth "tilted to the downside". GDP growth to be supported by higher exports, new mining investment projects. Risks to the global economy remained tilted to the downside. Significant global uncertainty over outlook for china, trade tensions.

The US Commerce Department on Monday gave a temporary 90-day license to China’s tech giant Huawei that will allow operations to continue for existing

The US Commerce Department on Monday gave a temporary 90-day license to China’s tech giant Huawei that will allow operations to continue for existing Huawei mobile phone users and rural broadband networks.  Huawei founder Ren Ahengfei, however, is not impressed with the temporary reprieve, according to China State Media reports.  Ahengfie has reportedly said that the 90-day temporary license does not mean much and that Huawei has made preparations regarding the latest US actions. Key quotesUS government is underestimating Huawei's capabilities  We have faced US restrictions since a year earlier The issue is with the US government, not with US firms 

Japanese Chief Cabinet Secretary Suga was reported by Reuters, as saying that there are ample measures taken to address the tax hike concerns. He adde

Japanese Chief Cabinet Secretary Suga was reported by Reuters, as saying that there are ample measures taken to address the tax hike concerns. He added that the Japanese government will raise consumption tax unless there is a Lehman-scale event. On Monday, Suga said that there are no problems with economic fundamentals.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.8990 vs Monday's fix of 6.8988.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.8990 vs Monday's fix of 6.8988.

With the latest warnings concerning the no-deal Brexit likely being a positive signal for the UK PM May’s proposal, GBP/USD trades near 1.2730.

British lawmakers come forward to avoid another humiliation for the PM May.The economic platter weighs light and shifts market attention over to politics.With the latest warnings concerning the no-deal Brexit likely being a positive signal for the UK PM May’s proposal, GBP/USD trades near 1.2730 during early Tuesday. Notable headline British lawmakers like Finance Minister Philip Hammond, Foreign Secretary Jeremy Hunt and Deputy Governor for monetary policy at the Bank of England (BOE) Ben Broadbent have recently been on wires opposing no-deal Brexit. The UK Prime Minister Theresa May is also gathering support from Tory loyalists for her Brexit proposal that will be up for voting in the UK parliament from the week starting on June 03. While political plays could keep offering intermediate moves to the Cable, lack of major data/events might hinder the quote’s momentum.Technical AnalysisA break of 1.2710 becomes necessary for the sellers to aim for 15 low near 1.2670 and the 1.2600 supports whereas February month low near 1.2770 may confine immediate upside ahead of fuelling the prices to 1.2800 and April lows near 1.2865/70.

The Bank of Japan (BOJ) Governor Kuroda is on the wires now, via Reuters, making his scheduled appearance in the Japanese parliament in Tokyo. Key Hea

The Bank of Japan (BOJ) Governor Kuroda is on the wires now, via Reuters, making his scheduled appearance in the Japanese parliament in Tokyo. Key Headlines: BOJ is buying bonds to achieve price target. Not buying bonds to finance government debt. BOJ held 29tln yen of ETFs as of Sept 2018, which is 77.5% of Japan’s ETF market. ETF buying not aimed at boosting stock prices. BOJ buying may restrain big fluctuations in stock market.

A full-blown US-China trade war will push the world economy toward recession and see the Federal Reserve cut interest rates back to zero within a year

A full-blown US-China trade war will push the world economy toward recession and see the Federal Reserve cut interest rates back to zero within a year, analysts at Morgan Stanley said on Monday, according to Reuters. Key pointsIf talks stall, no deal is agreed upon and the U.S. imposes 25% tariffs on the remaining circa $300 billion of imports from China, we see the global economy heading towards recession. In response, the Fed would cut interest rates and China would scale up its fiscal stimulus to 3.5% of GDP (equivalent to around $500 billion) and its broad credit growth target to 14-15% a year. Our base case is that the escalation is temporary, but we would readily admit that the uncertainty is high with regard to how trade talks could evolve. The impact on global growth is non-linear – the risks are firmly skewed to the downside and the window for resolution is narrowing.  

The NZD/USD pair is mildly bid this Tuesday morning in Asia and appears to be creating an inverse head-and-shoulders bullish reversal pattern with the

NZD/USD is creating a bullish reversal pattern on the hourly chart. A move above 0.6547 is needed to confirm a breakout.The NZD/USD pair is mildly bid this Tuesday morning in Asia and appears to be creating an inverse head-and-shoulders bullish reversal pattern with the neckline resistance at 0.6547.  An hourly close above that level would confirm a breakout and open the doors to 0.6580 (target as per the measured move method).  However, a rejection at the neckline resistance followed by a move below 0.6529 would shift risk in favor of a drop to levels below 0.65.  Hourly chartTrend: Bullish above 0.6547Pivot points 

Even if recent positives portray an upbeat scenario for the AUD/USD pair, a downward sloping trend-line since April 18 question buyers ahead of RBA minutes.

Improving fundamentals and RSI increase favor buyers.Near-term trend-line resistance questions upside ahead of RBA minutes.Even if recent positives portray an upbeat scenario for the AUD/USD pair, a downward sloping trend-line since April 18 is still unbroken as the quote seesaws near 0.6925 ahead of the RBA minutes on early Tuesday. Should the pair manage to clear 0.6940 resistance-line, it can rise further towards 0.6965 and 0.7000 numbers to the north while 50% Fibonacci retracement of its April – May decline, near 0.7035, could question buyers afterward. In a case where prices cross 0.7035 upside hurdle, 0.7060, 0.7080 and 0.7100 might entertain the bulls. It should also be noted that the 14-bar relative strength index (RSI) gradually rises and indicates further recovery. If the quote fails to hold the latest strength, 0.6900 could be considered as immediate support ahead of watching over the current month low at 0.6862. Moreover, the pair’s extended downturn under 0.6862 can recall January bottom of 0.6830 on the chart.AUD/USD 4-Hour chartTrend: Pullback expected  

Iran’s President Rouhani was on the wires last minutes, via Reuters, responding to the US President Trump’s latest threat calls on Iran. Rouhani said:

Iran’s President Rouhani was on the wires last minutes, via Reuters, responding to the US President Trump’s latest threat calls on Iran. Rouhani said: “I favor talks and diplomacy but under current conditions I do not accept it.” Earlier today, Trump said that Iran has been very hostile and added that the nation would be making a very big mistake if they did anything. Meanwhile, WTI continues to hover around the session tops near 63.50 levels, having popped from just ahead of the 63 handle following the comments by Trump.

In an interview with Sky News earlier today, the Australian re-elected Prime Minister Scott Morrison said that the parliament may be unable to convene

In an interview with Sky News earlier today, the Australian re-elected Prime Minister Scott Morrison said that the parliament may be unable to convene in time, implying that Australia’s re-elected conservative government may not meet a June deadline for tax breaks that policymakers had been counting on to give the slowing economy a much-needed boost. The delay in tax rebate, maybe for months or even a full year, would add to the case for at least one cut in the current 1.5% cash rate, possibly as early as next month. Key Quotes (via Reuters): “We obviously have to wait for the writs to be returned and there’s a formal process for that.”  “At the moment, that’s not looking until very late into the back end of June.” “So, that really does make very narrow that opportunity to do it before 30 June.” “I think that’s very unlikely, with the advice I’ve received.” Morrison’s Liberal-National coalition had promised tax rebates to around 10 million middle- and low-income earners from July 1 worth up to A$1,080 per person.

Gold is seeing little action in Asia, having formed a doji candle on Monday – a sign of indecision in the market place. The yellow metal is currently

Gold is lacking a clear direction in Asia. The metal created a doji candle on Monday. Fed’s Powell warned on corporate debt, but failed to move the needle on Gold.  Gold is seeing little action in Asia, having formed a doji candle on Monday – a sign of indecision in the market place.  The yellow metal is currently flatlined at $1,276 despite cautious comments from Federal Reserve President Jerome Powell.  Financial regulators must take seriously potential dangers that rising levels of business debt pose to the US economy, Powell said on Monday, while adding that some comparisons to last decade’s subprime mortgage bubble overstate the risks. Powell also said that it is premature to make a judgement on trade and tariffs impact on the monetary policy path. So far, Powell’s take on corporate debt has failed to put a bid under gold. The risk-off tone in the US stocks also did little to help boost haven demand for the yellow metal. The S&P 500 index fell 0.6% as Huawei ban triggered a sell-off in chip stocks.  Looking forward, the metal may remain on the defense. After all, the metal’s inability to post gains on Powell’s comments and risk-off tone in stocks indicates the sentiment is quite bearish.  That being said, the case for corrective move higher would strengthen if the price finds acceptance above $1,279 – the high of the doji candle created on Monday. That could happen if the US dollar – gold’s biggest nemesis – takes a beating. As of writing, the Dollar Index is reporting mild gains at 98.00. Pivot points 

With the Japanese traders responding to the recent shift in the US outlook towards China’s Huawei and a bit soft tone for Iran, USD/JPY is on the bids.

Change in the US outlook towards China’s Huawei and Iran deterred previous pessimism.A light economic calendar continues giving importance to global politics for fresh impulse.With the Japanese traders responding to the recent shift in the US outlook towards China’s Huawei and a bit soft tone for Iran, USD/JPY is on the bids near 110.10 as Tokyo opens for trading on Tuesday. The US Commerce Department announced a 90-day window to those doing business with China’s Huawei to have lesser hardships for domestic business. This seems to be a welcome sign for the US-China trade spat after the Trump administration previously banned the Chinese giant from its homeland. A bit less harsh threats from the US President Donald Trump to Iran could also be considered as reasons for the improvement in risk sentiment. On the other hand, the US Federal Reserve Chairman Jerome Powell didn’t give much information for future monetary policy nor for trade tension while emphasizing threats from business debt if it increases much. Meanwhile, Japanese Finance Minister Taro Aso was also on wires, via Reuters, praising Japan’s fundamentals while conveying worries for capital expenditure at home and China’s slowdown. Given the recent change in market risk-sentiment, global risk barometer, 10-year treasury yield from the US, remained mostly unchanged at yesterday’s positive closing near 2.41%. Looking forward, the US existing home sales become the only economic data on the cards, which in turn highlights the importance of qualitative catalysts to determine near-term market sentiment. The housing market gauge may grow to 5.33 million from 5.21 million (MoM) in April.Technical AnalysisLatest highs near 110.30 and 100-day simple moving average (SMA) around 110.50 seem adjacent upside caps for the quote’s rise, a break of which can escalate the recovery towards 50-day SMA level of 111.10. On the flipside, 109.70 and 109.00 can limit the pair’s downside ahead of highlighting January-end low near 108.50.

Japanese Economy Minister Motegi is on the wires now, via Reuters, noting that Japan and the US will hold working-level trade talks today. No further

Japanese Economy Minister Motegi is on the wires now, via Reuters, noting that Japan and the US will hold working-level trade talks today. No further details are provided on the same.            On Monday, Reuters quoted sources, as saying that the US Trade Representative (USTR) Robert Lighthizer will travel to Japan to meet the Economy Minister Motegi for further trade talks on May, 24th.

Singapore Gross Domestic Product (YoY) came in at 1.2% below forecasts (1.5%) in 1Q

Reuters reports the latest comments delivered by the Japanese Finance Minister Taro Aso on Monday’s GDP data release. Key Points: “GDP at 2.1% and two

Reuters reports the latest comments delivered by the Japanese Finance Minister Taro Aso on Monday’s GDP data release.Key Points:“GDP at 2.1% and two-quarters of growth is not bad.” “Some capex appear postponed especially by manufacturers.” “Japan’s fundamentals continue to be firm.” “Corp earnings at high level, labor market remains strong.” “Slowdown in China’s economy caused decline in Japan’s exports.” “Japanese manufacturers may be delaying capital expenditure.”

The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its May 07 monetary policy meeting at 1:30 GMT on Tuesday.

The Reserve Bank of Australia (RBA) is up for releasing a minute statement of its May 07 monetary policy meeting at 11:30 am Syd/9:30 am Sing/HK and 01:30 GMT on Tuesday. The central bank surprised markets by not announcing an expected rate cut while upwardly revising economic growth and inflation forecasts during the meet. However, a statement on monetary policy has already dimmed the charm of today’s RBA minutes by conveying that the upward revision to economic projections was only for near-term. In any case, traders will still observe details of the minute statement in order to determine chances of a rate cut from the Australian central bank. Ahead of the release, TD Securities said: The RBA Board meeting for 7 May was a surprise for the doves as not only did they not cut but voiced trend growth of 2.75%, unemployment eventually reaching 4.75%, and core inflation reaching 2%. Then we found out a few days later that these were medium-term forecasts that relied on two rate cuts being delivered as priced by the OIS curve. Minutes are usually redundant after the release of the SoMP, but these may be worth a skim ahead of a RBA Governor Lowe speech less than an hour later at a lunch for the Economic Society of Australia.How could the minutes affect AUD/USD?While latest optimism surrounding the Australian economy, mainly due to election results, could dim impact of negative signals from the minutes, the US-China tension and absence of upbeat data from Australia continue to favor a rate cut from the central bank.  As a result, the Aussie can revisit the latest lows near 0.6860 on dovish signals while opening the door for January bottom surrounding 0.6830 during further declines. Alternatively, bullish signals might help the pair to cross five-week-old trend-line, at 0.6940, and aim for 0.7000.Key NotesAUD/USD: Buyers remain in charge around 0.6910, all eyes on RBA minutes AUD/USD technical analysis: Aussie bulls protect 0.6900 ahead of RBA AUD/USD Analysis: bears still dominating Aussie crossesAbout the RBA minutesThe minutes of the Reserve Bank of Australia meetings are published two weeks after the interest rate decision. The minutes give a full account of the policy discussion, including differences of view. They also record the votes of the individual members of the Committee. Generally speaking, if the RBA is hawkish about the inflationary outlook for the economy, then the markets see a higher possibility of a rate increase, and that is positive for the AUD.

Additional headlines are crossing the wires from the Fed Chair Powell, as he now responds to the Q and A session. “There will be a high bar to fundame

Additional headlines are crossing the wires from the Fed Chair Powell, as he now responds to the Q and A session. “There will be a high bar to fundamental changes to inflation framework. “ “Current policy framework has served the public well.” “Using an inflation range one option to be reviewed.” “US inflation dynamics very different than in recent decades, with globalization, technology playing a role.” “Outlook of trade talks is unknown, premature to judge.” “Don’t see any threat to dollar as reserve currency.”

With the on-going geopolitical tension between the US and Iran continues to entertain energy buyers, WTI is taking the rounds near $63.40 during early Tuesday.

Geopolitical tension between the US and Iran joins recent relief to China’s Huawei.Private inventory data will be observed for fresh impulse.With the on-going geopolitical tension between the US and Iran continues to entertain energy buyers, WTI is taking the rounds near $63.40 during early Tuesday. News reports concerning the “rudimentary rocket” fire near the US embassy in Iraq and the US President Donald Trump’s threat to Iran reversed the previous decline of the black gold on Monday. Adding to the strength was global oil producers’ accord to extend output cut agreement for the rest of the year. President Trump was again on wires a few hours back and reiterated his warnings to Iran if it does anything wrong. However, Mr. President remained ready to talk to the Middle East nation when it is ready, which in-turn signaled a bit mild tone from the earlier fury. On the other hand, the US recently scaled some of its restrictions on China’s Huawei to safeguard customers from the homeland. This could be considered as an extra point for optimists to watch. Looking forward, a weekly release of the US oil stock by the private industry survey, namely the American Petroleum Institute (API) will be in the spotlight for now. The inventory level registered 8.6 million barrels as prior and will be up to release numbers for the week ended on May 17 at 21:30 GMT.Technical AnalysisPrices need to clear $64.00 immediate resistance in order to aim for $64.70/80 areas including early April highs, a break of which can escalate the upside to $65.70 and $66.60 resistances. Meanwhile, $62.50 acts as nearby support, a break of which can drag the quote to 50-day simple moving average (SMA) near $61.90 and then to $60.70 rest-points.

Sky News quotes some sources, as saying Britain’s second-largest steel producer, British Steel, is on the verge of collapse amid growing signs that an

Sky News quotes some sources, as saying Britain’s second-largest steel producer, British Steel, is on the verge of collapse amid growing signs that an emergency government loan would fail to materialize unless a deal is reached on Tuesday. The likely collapse will put a total of close to 25,000 jobs at risk.    Key Details:“British Steel, its lenders and Whitehall are preparing for insolvency to take place within 48 hours, with EY expected to be formally appointed as administrators on Wednesday unless a deal is struck by Tuesday afternoon. Sources cautioned that after days of brinkmanship between the different stakeholders, a compromise could yet be struck, although they conceded that such an outcome looked increasingly unlikely. One said that British Steel's lenders and directors had resolved to place the company into administration on Wednesday if a final deadline for a deal on Tuesday afternoon was not met.”

Further comments are out from the Fed Chair Powell, as he continues to speak on the business debt levels. So far he hasn’t touched upon the topic of m

Further comments are out from the Fed Chair Powell, as he continues to speak on the business debt levels. So far he hasn’t touched upon the topic of monetary policy. Comparison of current business debt levels to subprime mortgage crisis “not fully convincing”. “Stronger financial system, lack of asset bubbles among differences.” “If business sector healthy overall, with debt servicing costs low relative to income.”

Despite bounce off in late last week, the AUD/JPY pair still remains under three-week-long trend-line resistance as it trades near 76.00 during early Tuesday.

Three-week-old resistance-time continues to restrict the pair’s upside.Latest lows can offer strong downside support ahead of highlighting January's bottom.Despite bounce off during late last week, the AUD/JPY pair still remains under three-week-long trend-line resistance as it trades near 76.00 during the early Asian session on Tuesday. As a result, buyers need to confront 76.35/40 area comprising resistance-line in order to justify their strength in targeting May 10 highs near 77.30. Should there be additional upside past-77.30, the quote can aim for 78.00 while 78.10/15 horizontal-area comprising late-April lows might question bulls then after. On the downside, 75.70 and 75.30 seem nearby supports to watch ahead of observing 75.00 as a support. In a case where prices continue trading southwards past-75.00, July 2016 bottom near 74.60 and June low of 72.40 can please bears.AUD/JPY 4-Hour ChartTrend: Pullback expected  

The Federal Reserve (Fed) Chair Powell is on the wires now, via Reuters, making his scheduled speech titled "Assessing Risks to our Financial System"

The Federal Reserve (Fed) Chair Powell is on the wires now, via Reuters, making his scheduled speech titled "Assessing Risks to our Financial System" at the Financial Markets Conference, in Florida.Main Headlines:Business debt at historic levels should cause businesses and investors to "pause and reflect". Warns that while growth in business debt appears to have moderated, another fast rise could increase vulnerability "appreciably". It is "good news" that large banks hold only $90b of the $700b collateralized loan obligation market, but fed would "benefit" from more information on who holds the rest. The level of business debt would not lead to "broad harm" if economic conditions deteriorate, though individual borrowers could face "severe strain". Sees overall moderate risks to financial system of high levels of business borrowing, considers debt growth product of long economic expansion. Fed takes seriously risks of "opaque" financing as source of fast growth of business debt.

Forex today remained jittery during the early Asian session on Tuesday as Huawei held the spotlight and the US President Donald Trump commented on Iran.

The US shifts soften its stance against China’s Huawei and also remains ready to talk to Iran.Lesser economics on hand highlights political events as likely major market drivers.Forex today remained jittery during the early Asian session on Tuesday as Huawei held the spotlight and the US President Donald Trump commented on Iran. Traders now await minutes of the Reserve Bank of Australia’s (RBA) latest minutes followed by the Governor’s speech at a different platform. Having witnessed a ban from the US, China’s Huawei can now do business with the US companies though for a short period of 90-days with a license. Read: U.S. Commerce Department scales back restrictions on Huawei – Reuters The US President Trump also crossed the wires while speaking on Iran. Mr. Trump said Iran has been very hostile but he is ready to talk with them when they’re ready. However, they would be met with great force if doing anything for which signs are absent until now. Read Trump: Iran has been very hostile - WTI pops to $63.39 Asian high While positive signals for Huawei pleased commodity-linked currencies like Dollars of Australia, New Zealand and Canada during early-day, crude oil benefited from the US President Trump’s comments. Previously, the Wall Street closed mostly in negative as Monday’s spat between the US and China led the former’s tech giants dragged into the trouble and mark losses of technology shares. DJI30 lost 84 points (-0.33%) and S&P500 trimmed 20 points while Nasdaq dropped 114 points (-1.46%). Read: Wall Street in the red as trade war hits US big names Moving on, minutes of the RBA’s latest minutes and speech from Governor Lowe will be in the immediate focus of the market players. While RBA minutes may have little importance due to quarterly rate statement released after the meeting when the central bank refrain from a rate cut, RBA’s Lowe could offer meaningful insights on the bank’s future moves while speaking at the Economic Society of Australia Business Lunch, in Brisbane. The economic calendar is light for Tuesday with the US existing home sales being the only release after RBA minutes to entertain market players. However, that doesn’t stop markets from being volatile if political plays surrounding trade, geopolitical and Brexit offer any surprises and/or crucial information.

U.S. President Trump has been crossing the wires, stoking the flames of hostilities towards Iran, saying that the nation would be making a very big mi

U.S. President Trump has been crossing the wires, stoking the flames of hostilities towards Iran, saying that the nation would be making a very big mistake if they did anything.Would be met with ‘great force’.Would have talks with Iran ‘when they’re ready.We’ll see what happens with Iran.Ira has been very hostile.Indeed, the oil market has been in focus since the weekend and Asian opening bounce of 1% following members of the Organization of the Petroleum Exporting Countries, meeting with some nonmember allies signalling an extension to production cuts through the end of 2019. Such rhetoric over Iran is likely to keep the black gold under the spotlight and we have seen a pop in WTI  to $63.39bbls so far in Asia today.  However, it's worth noting that Hedge funds have continued to liquidate some of their bullish position in oil according to the latest COT report while concerns about the economy and the outlook for consumption 'rumps' the ME risks...in the opinion to managed funds that is; For speculators are staying with the bid.    

Having recovered on the election results during Monday, the AUD/USD pair holds the strength to trade near 0.6910 at the initial Asian session on Tuesday.

The Aussie holds election result driven gains ahead of RBA minutes and Governor Lowe’s speech.The US-China spat can keep entertaining traders amid lack of major data/events.Having recovered on the election results during Monday, the AUD/USD pair holds the strength to trade near 0.6910 at the initial Asian session on Tuesday. The minute's statement of the latest Reserve Bank of Australia (RBA) meeting is in the spotlight for now. Not only surprise victory of the present PM Scott Morrison but tax cut announcement just after few hours of his selection also pleased the Aussie buyers recently. On a trade front, the US and China continue to jostle for better terms by turning down each other. The US earlier banned China’s Huawei from doing business with their firms but the US Commerce Department recently came out with the temporary 90-day license to offer a bit of relief. Risk tone was a bit light off-late as the US 10-year treasury yields grew more than 2 basis points to 2.42% by the press time. While the quarterly rate statement has already dimmed importance of today’s minute statement from the RBA, investors might seek further details on why the Australian central bank refrain from rate cuts and hiked economic forecasts instead. Additionally, the RBA Governor Stephen Lowe is also up for speaking at the Economic Society of Australia Business Lunch, in Brisbane. His comments will also be observed to validate a minute statement. Given the absence of major catalysts after RBA, markets are likely to emphasize more on the news reports concerning the US-China story in order to determine near-term trade sentiment.Technical AnalysisA downward sloping trend-line since April 18 can limit the quote’s immediate upside at 0.6940 whereas 0.7000, 0.7030 and 0.7055 may entertain buyers afterward. Alternatively, 0.6880 and 0.6860 seem nearby supports to follow during the pair’s pullback a break of which can recall January 2016 low surrounding 0.6830 on the chart.

With little news so far, NZD/USD is taking the rounds near 0.6530 at the start of Asian trading on Tuesday.

Absence of directives pushes the Kiwi to follow Aussie moves.The US-China developments and credit card spending will gain immediate focus.NZD/USD is taking the rounds near 0.6530 at the start of Asian trading on Tuesday. Even after refraining to decline further, the Kiwi pair didn’t move much on Monday as the absence of data/events gave little guidance to traders. Buyers came into play at the beginning of the week as surprise election result at its largest customer, Australia, helped the New Zealand Dollar (NZD). However, the gains were capped due to the on-going trade tension amid the US and China. Recently, the US Commerce Department announced a 90-day temporary license to China’s Huawei to do business with the US firms after it was banned a few days back. China might respond positively to the latest change in the US mood; though, nothing has been announced till now. While US-China stories will be there to observe, April month credit card spending data from New Zealand will also be the key to watch. The release is expected to rise to 5.9% from 5.1%. There prevails little or no major data/events from the US side which might curb the quote’s moves during the day.Technical AnalysisWhile 0.6500 and October 2018 low near 0.6425 limit pair’s downside, an eight-week-old descending trend-line at 0.6555 seems nearby resistance, a break of which can escalate the latest recovery towards 0.6580 and 0.6615 numbers to the north.

Earlier Tuesday, Reuters came out with advance extracts to the UK finance minister Philip Hammond’s speech to the business leaders and politicians.

Earlier Tuesday, Reuters came out with advance extracts to the UK finance minister Philip Hammond’s speech to the business leaders and politicians up for later part of the day. The news report says British FinMin will on Tuesday warn that those pushing for Britain to leave the European Union without a deal would be doing deliberate damage to the British economy. The news report further said that Hammond will say that:  There are some “on the populist right” who claim that only leaving without a deal is a “truly legitimate Brexit”. The 2016 Leave campaign was clear that we would leave with a deal. So to advocate for ‘no deal’ is to hijack the result of the referendum, and in doing so, knowingly to inflict damage on our economy and our living standards. Because all the preparation in the world will not avoid the consequences of no deal.

Having barred the Chinese telecom giant from doing business with the US firms, 90-day temporary general license was given to the Huawei by the US, Reuters says.

Having barred the Chinese telecom giant from doing business with the US firms, the US Commerce Department says it is creating a 90-day temporary general license till August 19 for Huawei and 68 entities, Reuters news report said on early Tuesday. The license, which was posted for public inspection, scale back the restrictions imposed by the U.S. government last week on Huawei Technologies Co Ltd’s buying U.S. goods in order to help existing customers, the report further mentioned. It was also said in the news report that the present announcement allows Huawei to provide service and support, including software updates or patches to existing Huawei handsets.

EUR/USD daily chart EUR/USD is trading in a bear trend below its main simple moving averages (SMAs). EUR/USD 4-hour chart EUR/USD is trading below its

EUR/USD daily chartEUR/USD is trading in a bear trend below its main simple moving averages (SMAs). 
EUR/USD 4-hour chartEUR/USD is trading below its main SMAs suggesting a bearish bias in the near term. EUR/USD 30-minute chartEUR/USD tried to reach 1.1180 resistance but the volatility was very low this Monday. The currency pair continues to be weak below that resistance. A break below 1.1150 can lead to 1.1140 and 1.1106 (2019 low). Resistances are at 1.1180, 1.1200 and 1.1220 level.  

South Korea Producer Price Index Growth (MoM) came in at 0.3%, above expectations (0.2%) in April

South Korea Producer Price Index Growth (YoY) registered at 0.6% above expectations (0.5%) in April

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