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Euro-Zone’s Manufacturing And Services PMI’s Unexpectedly Declined In May
For the 24 hours to 23:00 GMT, the EUR rose 0.24% against the USD and closed at 1.1183.
On the macro front, the Euro-zone's manufacturing PMI unexpectedly contracted to a level of 47.7 in May, defying market expectations for a rise to a level of 48.1. In the previous month, the PMI had registered a level of 47.9. Moreover, the region's preliminary services PMI surprisingly slid to a level of 52.5, compared to a level of 52.8 in the prior month. Market participants had envisaged for the PMI to register a gain to a level of 53.0.
The European Central Bank (ECB), in its latest monetary policy meeting minutes, showed declining confidence in growth recovery and indicated that the Eurozone's economic growth would be weaker than expected. Meanwhile, the officials called for more support for the economy, but argued that more analysis was needed to see if the rapid loss of economic momentum is persistent or temporary. Moreover, the central bank reiterated that it would finalise the further course of action of the targeted longer-term refinancing operations (TLTROs) in the forthcoming policy meetings.
Separately, in Germany, the final gross domestic product (GDP) advanced 0.4% on a quarterly basis in 1Q19, meeting market expectations. In the previous quarter, GDP had registered an unchanged reading. The preliminary figures had also indicated a rise of 0.4%. On the other hand, the nation's Markit manufacturing PMI unexpectedly dropped to a level of 44.3 in May, defying market anticipation for a rise to a level of 44.8. The PMI had registered a reading of 44.4 in the prior month. Further, the preliminary services PMI declined to a level of 55.0 in May, compared to a level of 55.7 in the preceding month. Market had expected the services PMI to ease to a level of 55.4. Additionally, the nation's Ifo business climate index eased to a 4-year low level of 97.9 in May, more than market expectations for a fall to a level of 99.1. The index had recorded a level of 99.2 in the prior month. Also, the Ifo current assessment index unexpectedly fell to a level of 100.6 in May, defying market anticipations for an increase to a level of 103.5. In the prior month, the index had registered a revised level of 103.4. Meanwhile, the Ifo business expectations index remained unchanged at 95.3 in May.
In the US, data showed that the Markit manufacturing PMI unexpectedly drop to a 9-year low level of 50.6 in May, reflecting the effects of ongoing trade war and compared to a reading of 52.6 in the previous month. Market participants had envisaged the PMI to remain unchanged. Likewise, the nation's services PMI unexpectedly fell to a level of 50.9 in May, defying market expectations for an advance to a level of 53.5. The PMI had registered a reading of 53.0 in the previous month. Furthermore, the US new home sales plunged 6.9% on monthly basis, to a level of 673.0K in April, compared to market consensus for a reading of 675.0K. New home sales had registered a revised reading of 723.0K in the prior month. Meanwhile, the number Americans filling for unemployment benefits unexpectedly slid to a level of 211.0K in the week ended 18 May 2019, confounding market anticipations for a rise to a level of 215.0K. In the prior week, initial jobless claims had registered a level of 212.0K.
In the Asian session, at GMT0300, the pair is trading at 1.1182, with the EUR trading marginally lower against the USD from yesterday's close.
The pair is expected to find support at 1.1130, and a fall through could take it to the next support level of 1.1078. The pair is expected to find its first resistance at 1.1211, and a rise through could take it to the next resistance level of 1.1240.
Amid no major economic releases in the Euro-zone today, investors would focus on the US durable goods orders for April, slated to release later in the day.
The currency pair is trading above its 20 Hr and 50 Hr moving averages.
British Pound Trading A Tad Lower In The Morning Session
For the 24 hours to 23:00 GMT, the GBP slightly declined against the USD and closed at 1.2663, after Prime Minister Theresa May’s second Brexit referendum was rejected in the parliament.
In the Asian session, at GMT0300, the pair is trading at 1.2661, with the GBP trading slightly lower against the USD from yesterday’s close.
The pair is expected to find support at 1.2617, and a fall through could take it to the next support level of 1.2572. The pair is expected to find its first resistance at 1.2695, and a rise through could take it to the next resistance level of 1.2728.
Amid lack of economic releases in UK today, traders would focus on global macroeconomic events for further direction.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Japan’s National Consumer Price Index Advanced As Estimated In April
For the 24 hours to 23:00 GMT, the USD declined 0.68% against the JPY and closed at 109.54.
In economic news, Japan's final machine tool orders sank 33.4% on an annual basis in April, confirming the preliminary print and following a drop of 28.5% in the prior month.
In the Asian session, at GMT0300, the pair is trading at 109.60, with the USD trading 0.05% higher against the JPY from yesterday's close.
Overnight data indicated that the national consumer price index (CPI) climbed 0.9% on a yearly basis in April, in line with market expectations. In the prior month, the CPI had recorded a rise of 0.5%.
The pair is expected to find support at 109.25, and a fall through could take it to the next support level of 108.91. The pair is expected to find its first resistance at 110.15, and a rise through could take it to the next resistance level of 110.71.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Swiss Franc Reverses Its Gains In The Asian Session
For the 24 hours to 23:00 GMT, the USD declined 0.60% against the CHF and closed at 1.0031.
Data showed that Switzerland’s industrial output unexpectedly rose 4.3% on an annual basis in 1Q19, following a similar rise in the previous quarter.
In the Asian session, at GMT0300, the pair is trading at 1.0038, with the USD trading 0.07% higher against the CHF from yesterday’s close.
The pair is expected to find support at 1.0008, and a fall through could take it to the next support level of 0.9979. The pair is expected to find its first resistance at 1.0083, and a rise through could take it to the next resistance level of 1.0129.
The currency pair is trading below its 20 Hr and 50 Hr moving averages.
Loonie Trading Slightly Lower In The Morning Session
For the 24 hours to 23:00 GMT, the USD rose 0.30% against the CAD and closed at 1.3473.
In the Asian session, at GMT0300, the pair is trading at 1.3476, with the USD trading a tad higher against the CAD from yesterday’s close.
The pair is expected to find support at 1.3445, and a fall through could take it to the next support level of 1.3415. The pair is expected to find its first resistance at 1.3504, and a rise through could take it to the next resistance level of 1.3533.
In absence of key economic releases in Canada today, investor sentiment would be determined by global macroeconomic events.
The currency pair is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
Aussie Reverses Its Gains In The Asian Session
For the 24 hours to 23:00 GMT, the AUD rose 0.26% against the USD and closed at 0.6899.
LME Copper prices declined 0.4% or $7.0/MT to $1740.0/MT. Aluminium prices declined 1.0% or $60.0/MT to $5860.0/MT.
In the Asian session, at GMT0300, the pair is trading at 0.6886, with the AUD trading 0.19% lower against the USD from yesterday’s close.
The pair is expected to find support at 0.6866, and a fall through could take it to the next support level of 0.6845. The pair is expected to find its first resistance at 0.6906, and a rise through could take it to the next resistance level of 0.6925.
With no macroeconomic releases in Australia today, investors would look forward to global macroeconomic releases for further direction.
The currency pair is showing convergence with its 20 Hr and 50 Hr moving averages.
Gold: Yellow Metal Extends Gains In The Asian Session
For the 24 hours to 23:00 GMT, Gold rose 1.17% against the USD and closed at USD1288.50 per ounce, amid weakness in the greenback.
In the Asian session, at GMT0300, the pair is trading at 1288.60, with gold trading marginally higher against the USD from yesterday’s close.
The pair is expected to find support at 1276.77, and a fall through could take it to the next support level of 1264.93. The pair is expected to find its first resistance at 1296.47, and a rise through could take it to the next resistance level of 1304.33.
The yellow metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
GBP/JPY Daily Outlook
Daily Pivots: (S1) 138.25; (P) 139.00; (R1) 139.46; More...
Intraday bias in GBP/JPY remains on the downside as fall from 148.87 is in progress for 61.8% retracement of 131.51 to 148.87 at 138.14. Sustained break there will pave the way to retest 131.51 low. On the upside, break of 141.73 minor resistance is needed to indicate short term bottoming. Otherwise, outlook will remain bearish incase of recovery.
In the bigger picture, current development suggests that GBP/JPY was rejected by 149.98 key resistance. And medium term fall from 156.59 is still in progress. Break of 131.51 will target 122.36 (2016 low). On the other hand, decisive break of 149.98 should confirm that medium term fall from 156.59 (2018 high) has completed at 131.51 already. Further rally would be seen back to 156.59 resistance and above.
Silver: White Metal Trading On A Weaker Footing This Morning
For the 24 hours to 23:00 GMT, Silver rose 1.04% against the USD and closed at USD14.59 per ounce, tracking gains in gold prices.
In the Asian session, at GMT0300, the pair is trading at 14.56, with silver trading 0.21% lower against the USD from yesterday’s close.
The pair is expected to find support at 14.43, and a fall through could take it to the next support level of 14.30. The pair is expected to find its first resistance at 14.66, and a rise through could take it to the next resistance level of 14.77.
The white metal is showing convergence with its 20 Hr moving average and trading above its 50 Hr moving average.
Crude Oil: Oil Trading Higher, Ahead Of Baker Hughes Weekly Rig Count Data
For the 24 hours to 23:00 GMT, Crude Oil declined 5.25% against the USD and closed at USD58.16 per barrel, as escalating US-China trade war tensions raised concerns over a slowdown in energy demand.
In the Asian session, at GMT0300, the pair is trading at 58.51, with oil trading 0.60% higher against the USD from yesterday’s close.
The pair is expected to find support at 56.84, and a fall through could take it to the next support level of 55.18. The pair is expected to find its first resistance at 60.66, and a rise through could take it to the next resistance level of 62.82.
Crude oil is trading below its 20 Hr and 50 Hr moving averages.
