Sample Category Title

XAUUSD (1189.76): Gold prices tested the support at 1183.30 with price action forming a near double bottom at the support. This could potentially open the upside in price action. The resistance level at 1193.00 remains the first hurdle. A breakout above this level could put gold prices on track to test the 1200 level once again. Overall, price action in gold remains flat in the medium term. The long-term range has been established between 1212 and 1183 levels. A breakout from either of these levels will most likely signal the next direction.

GBPUSD (1.3156): The GBPUSD maintained strong gains on Tuesday as price action closed with a bullish engulfing pattern after bouncing off the support region of 1.3054 - 1.3028. The GBPUSD could now be seen rising toward 1.3250 resistance which was previously tested. With the GDP and other economic reports due today, a beat on the estimates could act as a catalyst. To the downside, there is a risk that the GBPUSD could once again fall back to the support level. This could potentially weaken the support and expose the GBPUSD to test the lower support at 1.2808.

EURUSD (1.15063): The EURUSD currency pair touched a fresh two month low yesterday. Price action fell to 1.1435 before recovering off the lows. The common currency managed to close with a doji. Price action briefly touched the support level at 1.1435, but there is scope for a firmer retest to this level. To the upside, the common currency will need to break out above the resistance level of 1.1547 - 1.1525 region. A clear break above this resistance could eventually push the euro toward 1.1718. To the downside, if the support is retested and it fails to hold the declines, we anticipate the euro to fall to 1.1315.

Economic data on the day showed that Japan's economy watchers sentiment rose to 48.3. This beat estimates of 47.3 but was weaker than the previous month's 48.7.

The German trade balance data showed an increase to 18.3 billion beating estimates of 15.9 billion. The NY trading session showed Canada's housing starts increased just 189k missing estimates of 203k.

The day ahead looks somewhat busy with the European trading session kicking off with the monthly GDP data. Economists forecast that the UK's GDP advanced 0.1% on a month over month basis. This marks a somewhat slower pace of increase compared to 0.3% growth the month before.

The industrial, manufacturing and construction output report will also be coming out simultaneously.

Italy will be releasing the industrial production figures with estimates showing a rebound in activity. Industrial production fell 1.8% the month before.

The NY trading session remains quiet. Canada's building permits data is due. The U.S. producer prices report is expected to show a 0.2% increase following a 0.1% decline the month before. Core PPI is expected to rise by 0.2% as well.

Bitcoin was formed shortly after the global financial crisis of 2008. At the time, there was global anger regarding the role of regulators and central banks. When Bitcoin was unveiled as a decentralized currency with no centralized control it was a deliberate act to cut out the middleman.

The earliest adopters of the new currency were people involved in the dark web, a part of the internet often connected with illicit activities like drug dealing and accessible through browsers such as Tor. Silk Road was one of the biggest dark web websites then making more than $1 million a day when it was shut down.

As Bitcoin continued to grow, its use was also adopted in other businesses. Many companies, including Microsoft started to accept Bitcoin. This interest caused the price of Bitcoin to rise significantly and at the beginning of this year, the price reached $19000. In total, the cryptocurrencies industry at its peak was worth more than $700 billion.

Today, the ideas that pushed Bitcoin that high have been challenged. First, the security of Bitcoin – and other cryptocurrencies – is in question. Just this year, cryptocurrencies worth more than $700 million have been stolen. Yesterday, a smart contract on an Ethereum-based adult entertainment site was breached leading to a loss of more than $38,000 worth of cryptocurrencies.

In addition to this, the privacy promised by Bitcoin creators has not been there. Today, governments are able to trace some of the transactions. In addition, many companies have stopped accepting Bitcoin because of the worries of its price fluctuations.

Today, the BTC/USD pair is trading at 6500. This is lower than yesterday’s high of 6525. This month, the pair has moved sideways as traders wait for the next move. If the downward trend continues, the pair is likely to reach the important support of 6300.

The euro currency has moved above the 1.1500 level against the US dollar after US President Donald Trump once again criticized the US Federal Reserve on Tuesday. Price-action on the EURUSD pair has become increasingly bullish, a potential inverted head and shoulders pattern may also be forming. Buyers now need to close the day above the 1.1553 resistance level, while sellers need to close the day below the 1.1463 level.

The EURUSD pair is intraday bullish while trading above the 1.1490 level, key technical resistance is now found at the 1.1553 and 1.1600 levels.

If the EURUSD pair declines below the 1.1490 level, sellers may target the 1.1463 and 1.1429 levels.

The British pound has soared back above the 1.3100 level against the US dollar, after reports that a Brexit divorce deal could be reached between EU and UK negotiators by next Monday. The GBPUSD pair is strongly bullish while trading above the 1.3122 level, which represents the former weekly high. Buyers will likely aim for further gains above the 1.3200 level, while sellers now need to force price back under the 1.3100 level.

The GBPUSD pair is strongly bullish while trading above the 1.3122 level, key resistance is now found at the 1.3160 and 1.3200 levels.

If the GBPUSD pair moves below the 1.3122 level, key support is found at the 1.3100 and 1.3056 levels.

The US dollar fell across the board as treasury yields eased. The dollar index dropped by 10 basis points in the Asian session with losses spread across the board. The biggest gainer was sterling, which jumped after fresh hopes of a new Brexit deal between the United Kingdom and the European Union. The euro also jumped following Brexit news. A deal is expected to be announced as soon as Monday next week.

The Japanese yen strengthened against the US dollar in the Asian session. This was a continuation of the trend that started on Thursday last week when the pair hit a high of 114.53. This was the highest level in more than one year and was an important resistance level. Today’s gains on the yen came as the country released data that showed improved machinery orders. The sales of machinery rose by an annualized rate of 12.6%. This was higher than the 1.6% gain that traders were expecting. On a MoM basis, the machinery orders rose by 6.8%, which was higher than the minus 4% decline that traders were expecting.

The Office of National Statistics (ONS) will release GDP numbers for the UK. This will be important data because it will show the performance of the UK economy before Brexit. Traders expect the numbers to show that the economy rose by 0.1%, which will be lower than the previous growth of 0.3%. The manufacturing production is expected to move up by 0.1% which will be higher than the previous decline of minus 0.2%.

EUR/USD

The EUR/USD pair is trading at 1.1500 where it has found some support. This level is higher than the yesterday’s low of 1.1430 and could be a turning point for the pair. The double EMA indicated below shows that the strength of the downward trend could be reducing. The momentum indicator is currently at the 100 level and rising while the MACD too shows that the pair could be starting an upward trend.

USD/JPY

Last week, the USD/JPY reached the highest level since November last year as shown on the daily chart below. As expected, the pair then started a sharp decline that saw it reach an intraday low of 113.00 today. This level is also the middle band of the Bollinger Bands. This decline happened as bulls exited their trades with a good profit. There is a likelihood that the price will fall further, potentially to the 111.30 level which is also the 61.8% Fibonacci Retracement level before it continues with the upward trend.

GBP/USD

The GBP/USD pair jumped to an intraday high of 1.3163. This ended the sharp decline the pair had made in the past few days as the dollar strengthened. It is now trading at the 1.3157 level which is along the middle band of the Bollinger Band as it aims to move to the important resistance level of 1.3200. The upward trend will continue as traders wait for the UK GDP numbers and further developments in Brexit negotiations.

Rates: Focus turns to supply and US price data

Supply operations and US price data take centre stage today and tomorrow. Are investors already willing to absorb US (today and tomorrow) and Italian (tomorrow) bonds or do they remain sidelined expecting the upleg in yields to continue? US PPI and CPI data are expected to remain above the Fed’s 2% inflation target, warranting a continuation of the rate hike cycle.

Currencies: EUR/USD resists EM/Italian uncertainty, at least for now

EUR/USD set a minor short-term correction low yesterday as global risk-off and uncertainty on the Italian budget weighed. However, losses were reversed later. Markets look out whether US auctions will raise US rates further today, potentially causing new USD gains. Sterling rallies as investor see Brexit progress in the run-up to next week’s EU summit.

The Sunrise Headlines

• US equity markets were mixed yesterday, with most indices closing the trading day with (limited) losses. Nasdaq outperformed. Asian markets are mixed with Japan bouncing back after yesterday’s losses and China underperforming.
• Italy’s budget joint committee has disapproved the government’s budget proposal. It said the growth targets (1.5% in 2019) are too ambitious and optimistic. They can now ask the government to review the targets.
• US President Trump will soon present a list of measures to tackle the federal government’s big budget deficit, his chief economist said. The deficit expanded to an estimated $782bn, i.a. under influence of Trump’s $1,5 trillion tax cut.
• Hurricane Michael is set to enter Florida tonight. The category 4 storm is currently storming through the Gulf of Mexico, causing to shut more offshore oil platforms in the US. Around 40% of crude production in the area is already lost.
• Officials from both the EU and the UK said progress have been made on overcoming two of the final obstacles, Irish border and the overall Brexit deal. In addition, up to 40 Labour MPs said to be prepared to back a Chequers-like deal.
• US Treasury secretary, Steve Mnuchin, has warned China not to engage in competitive devaluations of the Chinese yuan to offer rebuttal in the trade war. The Treasury will soon release its regular report on currency issues.
• Today’s eco calendar contains US September’s PPI’s. The UK releases Industrial Production and GDP data today. BoE’s Haldane and Fed’s Evans are scheduled to speak. The US holds 3- and 10-yr Note auctions

Currencies: EUR/USD Resists EM/Italian Uncertainty, At Least For Now

EUR/USD resists global/Italian uncertainty, for now

Yesterday, uncertainty on EM and on Italy remained the main drivers for FX trading. Asian equities stayed under pressure. Ongoing political noise on the Italian budget weighed on European sentiment even as Fin Min Tria tried to de-dramatize the tensions with the EU. Global stress eased slightly in US dealings, but sentiment stayed fragile. President Trump reiterated the Fed was going too fast in raising rates. The direct impact of his comments on the dollar was modest. At that time, US yields were already off the cycle peak and the USD rally eased. EUR/USD dropped temporarily below the 1.1460 support intraday, but closed little changed at 1.1491. USD/JPY also drifted further south and finished at 112.96. Overnight, Asian equities are trading mixed to mariginally stronger. US Fin Min Mnuchin indicated that the US will take depreciation of the yuan into account in the US-China trade talks. The CNY, but also the likes of the INR and the IDR are holding near recent lows, but with no additional losses. The IMF warned on risks to global stability due to pressure on EM and a deterioration in trade relations. The fund also sees stretched asset valuations. Asian markets are in some kind of wait-and-see modus. EUR/USD hovers again in the 1.15 area. USD/JPY trades in the 113 area. Today, there are mostly second tier data in EMU and the US. US PPI is interesting, but the focus is on tomorrow’s CPI’s. We also keep a close eye at the auctions of 3 & 10Y US Treasuries. A mediocre result might reactivate the mechanisms of higher US yields, a strong dollar and global market volatility. The ‘Italian issue’ also isn‘t solved yet. Recently, we had a cautious yet positive USD bias. Losses in EUR/USD were modest given ongoing tensions on Italy. However, there was no obvious trigger for a EUR/USD rebound. We keep our cautious euro-negative/USD bias. EUR/USD might drift lower in the 1.1550/1.13 band. The USD/JPY uptrend looks blocked by the risk-off, despite higher core/US yields.

Yesterday, sterling rebounded further. Markets saw growing signs that at least a partial/temporary Brexit agreement could be reached ahead of next week’s EU summit. EUR/GBP declined further in the 0.87 big figure and finished the day at 0.8742. Today, UK trade balance and production data are expected soft, but the focus remains on Brexit. Hope on Brexit progress supports a positive GBP-momentum. In a day-to-day perspective, there is no need to row against this tide. Next question remains whether May can secure approval in the UK parliament.

EUR/USD: euro limits losses despite ongoing tensions on EM and on Italy

AUDUSD has edged higher over the previous couple of days after it hit a fresh 32-month low of 0.7040 at the start of the week. The price is ready to post a bullish correction after the aggressive selling interest and may challenge again the long-term descending trend line, which has been holding since January 26. The technical picture supports that the upside momentum is likely to continue in the short-term.

From the technical point of view, in the daily timeframe, the stochastic oscillator is strengthening its movement above the oversold zone, after it posted a bullish crossover within the blue %K line and the red %D line, while the RSI indicator is sloping to the upside below the threshold of 50.

If there are further positive pressures, a re-touch of the diagonal line to the upside is possible, but first the pair needs to surpass the 20- and 40-simple moving averages (SMAs) at 0.7185 and 0.7215 respectively in the daily timeframe. A break to the upside of the aforementioned key line would shift the bearish view to a more neutral one and bring the 0.7300 psychological level into view. More advances could open the way towards the 0.7380 barrier, taken from the high on August 21.

Alternatively, should a downside tendency take form again, immediate support will likely come from the 32-month low of 0.7040. A drop below this level would reinforce the downside risk and send prices until the 0.7000 round number, reached on January 2016, creating a lower low in the downward trend.

To summarize, the very short-term timeframe is skewed to the upside, while in the long-term, AUDUSD maintains a clear bearish outlook.