Sample Category Title

The Aussie dollar extends advance on Tuesday, driven by weaker US dollar on fresh risk sentiment also supported by stronger that expected Australian data, released overnight. Monday's eventual close above 55SMA (0.7117) which limited the action in past five days was bullish signal that added to improved near-term outlook. Fresh bulls cracked pivots at 0.7145/49 (100SMA/50% of 0.7295/0.7003) and pressures daily cloud top (0.7156), with daily close above these levels needed to generate further bullish signals for extension of recovery from 0.7000 zone. Caution on weaker momentum and overbought slow stochastic on daily chart, which may slow bulls, but repeated close above 55SMA would keep bullish bias and focus shifted higher.

Res: 0.7149, 0.7156, 0.7168, 0.7183
Sup: 0.7131, 0.7119, 0.7101, 0.7091

Yesterday, the European Single Currency jumped to the 1.1260 level, breaking the resistance level of the weekly R1. On Wednesday morning, the rate was trading between the monthly PP and the weekly R1 at the 1.1270 level.

Most likely, the currency exchange rate will break the resistance level of the monthly pivot point at the 1.1281 mark to surge towards the weekly R2 at the 1.1289 mark. Besides, the simple moving averages will try to catch on the rate during the trading session.

However, the rate could be bounced off the resistance level to decline to the 1.1260 level.

Yesterday, the currency exchange rate broke the resistance level of the 55-hour simple moving average to end the trading day below the weekly pivot point at 1.3050. During Tuesday's morning hours, the rate was supported by the 55-hour SMA to be located at the 1.3103 mark.

In regards to the near-term future, most likely, the British Pound will break the resistance level of the monthly pivot point at the 1.3127 mark to end the day near the 36.10% Fibo at the 1.3162 mark.

On the other hand, the rate might trade sideways to stay between the monthly pivot point at 1.3127 and the weekly pivot point at 1.3074

Yesterday, the currency exchange rate was resisted by the 100-hour simple moving average to end the day at 111.20. On Tuesday morning, the rate was located at the 111.31 mark.

Most likely, the rate will trade sideways to stay below the weekly pivot point at the 111.46 mark. Besides, the 200-hour simple moving average should support the rate during the day.

On the other hand, the rate could bounce off the weekly pivot point at the 111.46 mark to decline to the 111.00 level.

Yesterday, the yellow metal broke the resistance level of the 200-hour simple moving average to end the day at the 1,296.00 level. On Tuesday morning, gold was located above the monthly pivot point at the 1,301.85 mark.

It is expected, that the yellow metal will keep surging to end the day at the 1,304.00 level.

Besides, the simple moving averages will try to catch on the rate during the week.

EURUSD is still in a three-wave recovery as part of a corrective wave iv), that can look for resistance and a bearish turn around the Fibonacci ratio of 38.2 or 50.0, and near the upper corrective channel line. Also former swing high at 1.128 can react as resistance for the pair. That being said, if we expect strong USD (EURUSD goes lower), then this would also have an impact on GOLD prices, where we see price already dropping from the 1303 swing high, where a bigger A-B-C correction may have ended its recovery. In such case, be aware of a bearish reversal, in minimum three legs on metals.

EURUSD, 1h

GOLD, 30Min

Airbus spokesman Rainer Ohler criticized the US has "no legal basis" take action against EU on its subsidies. "Necessary measures" has been take to comply with "relatively minor elements" following the May 2018 WTO report. Additionally, Ohler said the USD 11B amount the US claimed was :"largely exaggerated" and should be "defined by the WTO", not the US.

https://twitter.com/roblagnac/status/1115529916261502976

https://twitter.com/roblagnac/status/1115529395681341440

Separately, French Finance Minister Bruno Le Maire said "When I see the situation global growth is in, I don't think we can afford to have a trade conflict even if only on the specific issues of the aircraft industry in the United States and Europe."

The pair extends pullback from 111.82 high on Tuesday, following bearish signal from Monday’s marginal close below 200SMA and formation of reversal pattern on daily chart.

Repeated close below 200SMA is needed to confirm near-term stance, however, corrective action should find footstep at 111 zone (Fibo 38.2% of 109.71/111.82 / 20/100SMA’s) to keep bulls intact as strong bullish momentum and rising massive daily cloud continue to underpin.

Only violation of daily cloud top 110.75 would sideline bulls for deeper correction.

Res: 111.49, 111.58, 111.82, 112.13
Sup: 111.22, 111.00, 110.75, 110.51

EUR/USD

Current level - 1.1266

Finally, the pair broke through 1.1250 resistance and the bias is positive, for a rise towards 1.1330. Crucial on the downside is 1.1210 low.

USD/JPY

Current level - 111.31

The corrective rebound to 111.50 failed and the bias is bearish, for a break through 111.15, towards 110.50.

GBP/USD

Current level - 1.3078

Despite the slow pace, the bias remains positive, for a climb towards 1.3200 area. Crucial on the downside is 1.2960.

ECB negative rates in focus

In light of news that a major French Bank will layoff 1,600 employees, the topic of ECB negative interest rates effect on banks’ balance sheets has become hot again. Discussion on negative rates will be the focal point of this week’s ECB meeting. In March, the ECB's dovish communication and members worry over the negative impact of low yields hit banking sector stocks hard. While it’s hard to pinpoint why these layoffs are necessary, reduced banks’ interest margins and profitable due to low rates are clearly not helping. Possible solutions to reduce the impact including ECB reserves tiers are finding a divided committee. Moreover, it is unlikely that a solution will be provided at this week’s ECB policy meeting. In March's press conference Draghi stated, “possible measures that can preserve the favorable implications of negative rates for the economy, while mitigating the side effects.” Our focus will be on President Draghi’s view on tiered reserves, which would be a mixed, slight positive bias for euro area financial markets. On the one hand, tiered reserves would indicate higher profitably for banks but on the other, suggest negative rates for longer. Following the March meeting, were the ECB’s introduced TLTRO III and the announcement of modifications in forward guidance, we do not anticipate any new policy measures. The ECB provided a dovish bias via a reduction in economic and inflation forecasts indicating that the possibility of a further dovish surprise is unlikely. Rate markets have already begun pricing in an ECB interest rate cut. Additional feeling downside risk has increase will quicken the flattening of the EGB yield curve and weaken EUR further. EURUSD recovery was weak and would need a break above 1.1289 to extend the bullish tone.

Sterling likely to bounce

After rejecting PM May’s Withdrawal Agreement and failing to agree on any alternative, UK MPs are again counting on May’s persuasive power to obtain another extension agreement. Yet the outcome might be very different from what May’s extension period considered, as both houses of Parliament ratified a legislation that provides lawmakers the chance to impose legally binding changes into May’s divorce date.

Indeed, as May’s government is willing to postpone the date by 30 June 2019, it is becoming clearer that UK Parliament is willing to impose a longer period, thus prompting another debate among MPs that is taking place today. The recent talks initiated between the Conservative and Labor party brought nothing but gridlocks since no resolutions included a scenario where the UK would remain within the EU customs union, a major requirement for Jeremy Corbyn’s Labor party while being the exact opposite of Tory’s Brexiteers.

It is therefore very likely that the British pound gets a boost for the time being. Either scenario consisting of a short-term or a longer-term extension period would provide GBP bulls with good reasons to support the currency. However major risks remain since European leaders are again solicited for an emergency summit in Brussels on Wednesday and while a certain disinterest in Brexit emerges ahead of incoming EU election, the European Parliament is expecting to see a plan attached with the extension.

Currently trading at 1.3103, GBP/USD is heading along 1.3150 short-term