EUR/USD technical analysis: Intraday recovery tests trend-channel/50-hour…

   •  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

 

 

The Analytical Overview of the Main Currency Pairs on 2019.05.21

by JustForex

The EUR/USD currency pair

  • Prev Open: 1.11602
  • Open: 1.11650
  • % chg. over the last day: +0.05
  • Day’s range: 1.11443 – 1.11722
  • 52 wk range: 1.1111 – 1.2009

EUR/USD remains in a bullish mood. Right now EUR is consolidating around 1.11450-1.11650. The market participants keep watching the Washington/Beijing trading conflict. Threats of further actions escalated after the US sanctioned Chinese tech giant Huawei. Further descend of the quotes remain possible. You should open positions from the key levels.

At 17:00 (GMT+3:00) the US will publish the secondary real estate sales report.

EUR/USD

The price fixed below 50 MA and 200 MA which points towards the power of the sellers.

The MACD histogram is in the negative zone and below the signal line which gives a strong signal towards selling EUR/USD.



Get our Weekly Commitment of Traders Report: – See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.


Get Our Free Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter


The Stochastic Oscillator is in the neutral zone, the %K line is above the %D line which points towards a bullish mood.

  • Support levels: 1.11450, 1.11200, 1.11000
  • Resistance levels: 1.11650, 1.11850, 1.12000

If the price fixes below 1.11450, expect further descend toward 1.11200-1.11000.

Alternatively, the quotes can recover toward 1.11800-1.12000.

The GBP/USD currency pair

  • Prev Open: 1.27303
  • Open: 1.27210
  • % chg. over the last day: -0.02
  • Day’s range: 1.26853 – 1.27322
  • 52 wk range: 1.2438 – 1.3631

GBP/USD keeps showing a negative trend. The ambiguousness regarding Brexit pushed the GBP down. Theresa May earlier stated that she wants to present a brave new offer to the lawmakers in order to reach the Brexit agreement. The local support and resistance levels are 1.26800 and 1.27150. The trading instrument can descend further. You should open positions from the key levels.

At 11:30 (GMT+3:00) the Bank of England will publish the inflation report.

GBP/USD

The price fixed below 50 MA and 200 MA which points to the power of the sellers.

The MACD histogram is in the negative zone and below the signal line which indicates a signal to sell GBP/USD.

The Stochastic Oscillator is in the oversold zone, the %K line is below the %D line which gives a weak signal to sell GBP/USD.

  • Support levels: 1.26800, 1.26500
  • Resistance levels: 1.27150, 1.27550, 1.28250

If the price fixes below the 1.26800, expect further descend toward 1.26500-1.26300.

Alternatively, the quotes can recover toward the round 1.28000.

Registration

The USD/CAD currency pair

  • Prev Open: 1.34399
  • Open: 1.34246
  • % chg. over the last day: -0.14
  • Day’s range: 1.34194 – 1.34355
  • 52 wk range: 1.2727 – 1.3664

USD/CAD keeps showing an ambiguous technical picture. The trading instrument is consolidating. The local support and resistance levels are 1.34200 and 1.34450. The financial market participants are waiting for additional drivers. Keep an eye on the oil quotes and open positions from the key levels.

The Economic News Feed for 21.05.2019 is calm.

USD/CAD

The price fixed below 200 MA which points towards the power of the sellers.

The MACD histogram is in the negative zone but above the signal line which gives a weak signal to sell USD/CAD.

The Stochastic Oscillator is in the neutral zone, the %K line started to cross the %D line. There are no signals at the moment.

  • Support levels: 1.34200, 1.34000, 1.33800
  • Resistance levels: 1.34450, 1.34650, 1.34850

If the price fixes below 1.34200, expect further descend towards 1.34000-1.33800.

Alternatively, the quotes can grow towards 1.34700-1.34850.

The USD/JPY currency pair

  • Prev Open: 110.103
  • Open: 110.068
  • % chg. over the last day: -0.07
  • Day’s range: 110.010 – 110.263
  • 52 wk range: 104.97 – 114.56

USD/JPY stabilized. The technical picture is ambiguous. The local support and resistance are 110.000 and 110.300. The demand for the safe assets remains due to the US/China trading conflict. The trading instrument can descend further.

The Economic News Feed for 21.05.2019 is calm.

USD/JPY

The price fixed above 50 MA and 200 MA which points towads the power of the buyers.

The MACD histogram is in the positive zone but below the signal line which gives a weak signal towards buying USD/JPY.

The Stochastic Oscillator is in the neutral zone, the %K line is crossing the %D line. There are no signals at the moment.

  • Support levels: 110.000, 109.750, 109.500
  • Resistance levels: 110.300, 110.700

If the price fixes below the round 110.000, expect further descend towards 109.750-109.500.

Alternatively, the quotes can grow towards 110.600-110.800.

by JustForex

The Dollar Index Is Holding Key Highs

by JustForex

Demand for the greenback is still high enough. At the moment, the dollar index is consolidating near annual highs. The trade conflict between the US and China is in the focus of attention. Concerns about further escalation of the trade war have increased significantly after Washington imposed sanctions on the Chinese telecom giant Huawei. The recovery of the 10-year US government bonds yield supports the US currency.

Uncertainty concerning Brexit continues to put pressure on the British pound. British Prime Minister Theresa May said that she would present a “new bold offer” to lawmakers in a final attempt to conclude a Brexit deal. The Australian dollar fell after the publication of the RBA monetary policy meeting minutes. The head of the Central Bank said that the regulator would consider the issue of lowering interest rates at the meeting in June. Today, investors will assess important economic releases from the UK and the US.

Oil quotes show positive dynamics. At the moment, futures for the WTI crude oil are testing the mark of $63.45 per barrel.

Market Indicators

Yesterday, the bearish sentiment prevailed in the US stock market: #SPY (-0.66%), #DIA (-0.30%), #QQQ (-1.69%).



Get our Weekly Commitment of Traders Report: – See where the biggest traders (Hedge Funds and Commercial Hedgers) are positioned in the futures markets on a weekly basis.


Get Our Free Metatrader 4 Indicators – Put Our Free MetaTrader 4 Custom Indicators on your charts when you join our Weekly Newsletter


The 10-year US government bonds yield is recovering. Currently, the indicator is at the level of 2.41-2.42%.

– Bank of England inflation report hearings at 11:30 (GMT+3:00);
– Existing home sales in the US at 17:00 (GMT+3:00).

by JustForex

What To Look For In UK Inflation Data

Tomorrow we will be getting a host of data out of the UK. Some of it is likely to move the markets significantly, and some of it won’t.

We could see a bunch of volatility, with the market trying to digest a lot of moving parts all at once. Naturally, the CPI inflation data will be the one to get the headlines. But let’s try to make sense of PPI, PRI, HPI and the others.

This will be a good chance to get a gauge of the market ahead of the next barrage of data that comes out in Friday, led by Retail Sales data. Even without the looming discussions of Brexit, the pound is in for a pretty active week.

What We Are Expecting

Set your watches for the flood of data at 10:30 CET (or 04:30 EST) when we get all the UK data for the day. The ones likely to get the market’s attention are the titular CPI data, but PPI can also move the market on its own. Especially in this scenario where the expectations for each set of data are pointing in different directions.

Traditionally it’s the core numbers that are the most relied on. But, in the case of the UK, we’ll be focusing on the headline results. Of course, CPI takes precedence, because that’s what the BOE looks at when setting policy. However, PPI also influences inflation, so it’s quite relevant as well.

Inflation Outlook and Analysis

The consensus among analysts is that the UK monthly inflation rate for April was 0.3%. This is a little above the previous month’s 0.2%. A result like this would take the annualized rate to 1.8%, a step in the wrong direction from the 1.9% prior. The core rate is also expected to come in at 1.8%.

UK inflation has remained just below the BOE’s target since the beginning of the year. Even though the next move is still expected to be a hike around November, the lack of growth in the rate could put a damper on that expectation. However, there is a significant number of analysts who are projecting a higher inflation rate. They are expecting it to pop over 2.0% annualized. This would help affirm the hawkish outlook.

Underlying Price Moves

The Producer Price Index is expected to stay flat on input and tick up 0.1% on output, both on a monthly basis. On an annualized basis both input and output producer prices are well above the target inflation rate.

A matter of concern for businesses is that input prices continue to grow faster than output prices. This shows that UK producers are having difficulty passing the cost increases on to customers, which would show a certain absorption of inflation.

This would be a bad sign for the FTSE, even though through the last earnings season, most UK companies reported robust trading in the first quarter. Should businesses manage to pass increasing materials costs on to customers, we could see an increase in inflation in the near future.

The Market Moves

Generally, we can expect a 40-60 pip move immediately after CPI data. The question this time around is whether the PPI data is going to exacerbate or mute the market reaction.

If we get outperformance in both, then we could expect a good deal of strength in the pound. Even though there is a public consensus on a somewhat flat outlook in inflation, the market appears to be pricing in at least some of the more optimistic outlook.

Should the data disappoint enough, we could be looking at a delay to the expected hike by the BOE, or even the potential of a change in stance. That would be negative for the pound, though most negativity seems to have been wrung out by the constant Brexit news.




AUD Collapse Continues As Trade War Woes Outweigh Elections Relief

USD Having a Quiet Start

The US dollar has had a relatively subdued session over the European morning on Tuesday. Markets await the first key drivers of the week. Looking ahead to the US session today we have very little on the data sheet aside from a few Fed members who will be speaking. For now, the index trades higher within the 97.68–98.06 range. We are likely to see meaningful breaks made today.

Euro Under Pressure

EURUSD continues lower today. This is despite Trump’s announcement on Friday that EU auto tariffs will be delayed for six months. EUR remains pressured as concerns regarding the health of the eurozone remain the key driver. However, in its latest outlook released today, the OECD upgraded its eurozone growth forecasts for the year ahead despite warning that the US/China trade war will weigh on world growth again. EURUSD remains capped by the 1.1153 resistance level so far today.

Pound Pummelled Again

GBPUSD remains firmly pressured today extending recent losses to an 8th straight day as Brexit uncertainty and political disruption in the UK continue to weigh on sentiment. The market is very skeptical of May’s chances of delivering a Brexit deal. They are worried about the prospect of a no deal scenario materializing later in the year. GBPUSD trades 1.2690 last, testing the bearish channel low running from March highs.

Risk Sentiment Stable

Risk sentiment has been a little firmer today with SPX500 recovering off session lows to trade back up and test the 2856.30 resistance level. The main driver of risk flows continue to be the ongoing trade warn and simultaneous negotiations between the US and China. While above the 2816.15 level, focus remains on further upside.

Crude Remains Bid

Oil prices have had a subdued session so far today also though are trading higher on the day. Tensions in the Middle East have kept oil prices underpinned over recent days, despite last week’s bearish report from the EIA. Looking ahead today, the market will be watching the API inventories report for an early indication on stock levels ahead of the main EIA report tomorrow. Crude trades 63.42 last, remaining near the upper end of the 61.89–64.38 range.

Commodities Mixed

USDCAD has traded a little lower so far today. Firmer oil prices and a subdued US dollar have kept the pair weighed down. USDCAD is currently sitting on the trend line from April lows, trading 1.3426 last. While above the 1.3413 level, focus remains on further upside.

AUDUSD has been sharply lower again today. The pair had rebounded in early trading yesterday on news of Scott Morrison’s party retaining government, which is seen as growth positive. However, the key driver of AUD price action atm continues to be the ongoing trade war between the US and China. As China’s largest trading partner, the currency of Australia is highly sensitive to economic movements in China. Given the potential for severe economic damage from the new US tariffs, AUD is trading heavily. Price remains firmly below the .6982 currently with last week’s .6864 low looking vulnerable to a break this week.




Trump Delays EU Autos Tariffs But EURUSD Continues Lower

The EUR continues to trade lower this week despite Trump’s Friday announcement that tariffs on EU automobile imports to the US would be delayed by six months.

Trump recently stepped up the trade war with China by raising tariffs on $200 billion of Chinese goods from 10% to 25%. He was also planning on raising tariffs on EU and Japanese automobile imports to the US.

However, China retaliated with its own 25% tariffs on $60 billion of US goods. And it seems that the US has decided not to exacerbate worsening global trade relations once again.

Trade Wars Heating Up

Trump recently announced that he was considering similar 25% tariffs on auto imports from Japan and the EU. However, given the potential for both these economic areas to retaliate with their own tariffs, Trump has instead opted to delay the tariffs for 180 days.

Similar to last year, global markets cascaded lower in response to the fresh outbreak of tit for tat trade tariffs between the US and China. So, instead, the US will now engage in trade negotiations with both the EU and Japan to address the imbalance in automobile imports.

Trump Cites National Security Threat

When Trump announced an investigation into the automobile imports from these countries, he explained:

“Under current circumstances, this action is necessary and appropriate to remove the threatened impairment of the national security”.

The President also added:

“The United States defense industrial base depends on the American-owned automotive sector for the development of technologies that are essential to maintaining our military superiority”.

US Trade Secretary Robert Lighthizer will now have 180 days to report back to the president.

What is Driving EURUSD?

So, with the tariffs having been avoided for now, why is EURUSD still trading so heavily?

Part of the reason is that the market never seemed to fully price in the tariffs. The majority of the market focus was on the escalating trade tensions between the US and China. In fact, many banks had been expecting that such a delay would be likely.

Furthermore, the direct impact of any such tariffs, though negative, would likely be limited. This is because FX flows from the goods trade in EURUSD are diluted by financial flows.

The main issue driving EURUSD continues to be concerns surrounding the health of the eurozone economy. The manufacturing recession which has gripped the economy over the last year, as well as subdued inflation, have kept the ECB’s hands tied when it comes to policy normalization.

Implications for the ECB

The ECB has been able to formally end its QE program as of the start of the year. However, the planned Q3 rate hikes projected toward the end of last year have now been pushed out into 2020.

As of now, there are concerns that should the tariffs eventually come into play, in six months time, the eurozone economy might suffer. The tariffs would squeeze growth at a time when the ECB has barely any policy room left to manage the situation. This would leave a lower EUR as one of the only viable options for loosening financial conditions in the eurozone.

Technical Perspective

eurusd charteurusd chart

EURUSD continues to trade lower within the bearish channel which has framed price action over the last months. The sell-off has taken price down through the 1.1153 support zone as of today. This puts focus on a test of the 1.1129 level next, where we also have confluence with the bearish channel low. For now, focus remains on further downside unless we see a meaningful reversal above 1.1184.




Why Does Technical Analysis Work?

When it comes to either speculating or investing in the financial markets, there are two main approaches. The first being fundamental analysis and the other being technical analysis. Both these fields of study of the financial markets are different. Yet, they point to the same goal of buying low and selling high.

In forex, technical analysis is the go-to form of study. Technical analysis is merely the study of past prices in order to predict future price movements. Traders focus on a number of methods such as studying chart patterns or using technical indicators derived from price to understand what price will do.

In a way, technical analysis is predictive in nature. It can tell you, with some amount of confidence where price will be at, studying the past price behavior.

Technical Analysis vs. Fundamental Analysis

Traders often debate about which of these two types of analysis is better. The truth is that in order to understand the full scope of the markets that you are trading, both technical and fundamental analysis is required.

Fundamental analysis deals with understanding and studying the reasons behind the price behavior. On the other hand, technical analysis is all about understanding and studying what price will do.

Many traders view technical analysis in isolation. Sometimes, technical analysis works and at times it doesn’t. One of the main differences between fundamental and technical analysis is that the former is subjective in nature.

The interpretation can vary depending on the amount of information one has. Contrarily, technical analysis is objective. It is only when you combine the strengths of both these forms of analysis, that you get a full picture of the market.

Does Technical Analysis Work?

The answer to this depends on how one applies technical analysis. For example, you can be one trader using technical analysis on a 5-minute chart while another can use the same study but on a larger time frame.

The goal with both these different approaches in technical analysis is basically the same, which is to identify what price will do and then determine if it would be ideal to buy or sell.

Up to a certain point, technical analysis can work for traders. This is because you are after all studying the price of the security in question. The price that is reflected on the chart basically depicts the traders’ sentiment behind it.

In a sense, technical analysis is also one way of studying the market sentiment and the trader’s view of the security in question. Because patterns tend to repeat themselves, over time, technical analysis has been able to capitalize on this.

As an example, when you see a bearish engulfing pattern on a price chart that forms near a resistance level, you know that price is more likely to fall than rise. Technically, this can come across as something mysterious.

But if you scratch the surface, this bearish engulfing pattern simply reflects the bearish sentiment in the market. Now when you combine this view with the fundamentals behind the price behavior it brings more meaning.

Technical Analysis is Not All About Buying and Selling

For many traders who use automated trading strategies, technical analysis boils down to buying and selling based on the indicators they use. But while this remains a rather simplistic view of technical analysis, remember that the buy and sell signals generated are derived from price itself.

As we know, price is set by the markets which are made up of buyers and sellers. So, if you think that technical analysis is something that is mysterious it really isn’t. Technical analysis simply puts the market sentiment in perspective.

There are times when technical analysis can fail. One of the reasons behind this is the fact that the markets are adjusting to the news. Price discounts all the information that is already available. Therefore, when there is a mismatch on the market’s expectations and the fundamentals, you will notice from time to time that price can behave erratically.

In order to make technical analysis work for you, traders need to have a full understanding of the markets which includes using both fundamental and technical analysis. Remember that both these forms of study complement each other rather than giving opposing views.




Bitfinex Launches IEO Platform, Plans to Offer 80 Tokens

Bitfinex, along with its sister company Ethfinex, has announced the launch of an initial exchange offering (IEO) platform called Tokinex.

As per the announcement, the IEO platform will list the first token this Thursday followed by the second listing on June 13. The company also revealed that a total of 80 crypto companies are in line to list their tokens on the platform.

Discover Barcelona Trading Conference – A Top Tier Crypto Trading Event

Clients of both Bitfinex and Ethfinex can participate in the token sales with their existing accounts, however, the later is solely responsible to run the new platform.

 

IEO – the new trend in crypto

IEOs have gained massive popularity in the recent months after a few successful listings by Binance on its native IEO platform Binance Launchpad. As the listings already backed by an exchange, there is a guarantee of the tokens listing on a trading platform amid the sales. In addition, unlike ICOs in an open market, the IEO-listed projects go through rigorous scrutiny and due diligence by credible sources.

Other leading global exchanges including Huobi, Bittrex, and Gate.io also jumped into the sector with their own platforms.

No listing fees

To outrun the competition, Tokinex will not charge the blockchain companies any listing fees, which means, for generating revenue, it will only depend on maker-taker fees amid the listing of these tokens on the exchange.

The new IEO platform has been unveiled at a time when Bitfinex is facing serious allegations of utilizing cash reserves of its affiliated company Tether to cover up a loss of $850 million. Since the NY Attorney General accused the crypto exchange of wrongdoings, it has raised $1 billion in a private placement for its exchange token LEO to compensate the losses incurred by Crypto Capital.

Meanwhile, the Supreme Court of New York has recently ceased all cash flow from Tether to Bitfinex and asked the exchange to produce all documents related to the loan.

Gold Price Outlook: Gold Breaches Trend-Line, Yearly Low Exposed

Gold Price Outlook Talking Points:

  • Gold prices put in a bullish flare around last week’s open as stocks gapped-lower, highlighting a risk-aversion bid in Gold price that has since dissipated.
  • Price action soon pushed back to the bullish trend-line that helped to hold the low earlier in May, but with that trend-line now taken-out, the big question is whether bears can continue to push down to the May low or, perhaps even lower.
  • DailyFX Forecasts are published on a variety of currencies such as Gold, the US Dollar or the Euroand are available from the DailyFX Trading Guides page. If you’re looking to improve your trading approach, check out Traits of Successful Traders. And if you’re looking for an introductory primer to the Forex market, check out our New to FX Guide.

Do you want to see how retail traders are currently trading Gold? Check out our IG Client Sentiment Indicator.

Gold Prices Breach Bullish Trend-Line as Risk Aversion Takes a Pause

Gold prices are back on the offer after an early-month flare of strength has fallen flat. Gold prices limped into the month of May following a rough two-and-a-half month stretch. In mid-February, a large pullback showed-up that took prices from a high of 1346.75 all the way down to a support zone that runs from 1275-1280. That support helped to hold the low in the opening days of March, and the ensuing bounce saw the build of a lower-high, taken from around the 1325 level. Another return to support in early-April showed a similar theme, as a lower-high developed on the corresponding bounce, and sellers were soon in the driver seat, pushing Gold prices down to a fresh 2019 low in the opening days of May.

Gold prices soon found support on a bullish trend-line. This trend-line can be found by connecting the August-November swing lows from last year; and the projection of this line helped to arrest the declines in early-May. And as looked at a couple of weeks ago, a series of shorter-term higher-lows that built after that support inflection opened the door for a bullish response.

Gold Price Eight-Hour Chart

Gold price eight hour chart

Chart prepared by James Stanley

Gold prices ran into resistance on Monday evening last week, taken from the 1302.76 level, which is the 23.6% retracement of the August 2018 – February 2019 major move. And as risk aversion continued to pullback, as indicated by strength in US equities following last week’s gap-lower, Gold prices soon returned back down to that key support zone, hold around the 1275 level into the close of last week.

This week has thus far seen continued weakness, and sellers have now pushed Gold prices below the bullish trend-line that’s held the lows for the past nine months. This exposes a double bottom at 1266.10, which is currently functioning as the 2019 low in Gold.

Gold Price Four-Hour Chart

gold price four hour chart

Chart prepared by James Stanley

Gold Prices Carry Breakdown Potential

Below current price action is a confluent zone of interest that shows around the 1253 level. The price of 1253.56 is the 50% retracement of the same major move that offered resistance at the 23.6% level and support at the 38.2% marker during last week’s trade. But just below that, at 1252.90, is the 76.4% retracement of the 2011-2015 major move.

Gold Price Daily Chart

Gold price daily chart

Chart prepared by James Stanley

Retail Traders Betting on a Bounce – Keeping Focus on Bearish Themes

At this point, retail traders are heavily anticipating a bounce in Gold prices, and this could make the short-side theme that much more attractive. Approximately 79.5% of retail traders in the IGCS sample are holding net-long exposure, amounting to a ratio of 3.87-to-1. This further highlights bearish potential in the yellow metal as, at some point, as at least some of these traders are likely nearing capitulation with fresh lows coming into play. There are likely a number of stops sitting just below 1266.10, and if that price is taken-out, those sitting orders could further propel prices-lower.

Gold Price IG Client Sentiment

gold price ig client sentiment

Chart prepared by James Stanley

To read more:

Are you looking for longer-term analysis on the U.S. Dollar? Our DailyFX Forecasts have a section for each major currency, and we also offer a plethora of resources on Gold or USD-pairs such as EUR/USD, GBP/USD, USD/JPY, AUD/USD. Traders can also stay up with near-term positioning via our IG Client Sentiment Indicator.

Forex Trading Resources

DailyFX offers an abundance of tools, indicators and resources to help traders. For those looking for trading ideas, our IG Client Sentiment shows the positioning of retail traders with actual live trades and positions. Our trading guides bring our DailyFX Quarterly Forecasts and our Top Trading Opportunities; and our real-time news feed has intra-day interactions from the DailyFX team. And if you’re looking for real-time analysis, our DailyFX Webinars offer numerous sessions each week in which you can see how and why we’re looking at what we’re looking at.

If you’re looking for educational information, our New to FX guide is there to help new(er) traders while our Traits of Successful Traders research is built to help sharpen the skill set by focusing on risk and trade management.

— Written by James Stanley, Strategist for DailyFX.com

Contact and follow James on Twitter: @JStanleyFX

Gold Prices Tests 2019 Lows, GBPUSD Recovers on EURGBP Drop – US Market Open

MARKET DEVELOPMENT –Gold Prices Tests 2019 Lows, GBPUSD Recovers on EURGBP Drop

DailyFX Q2 2019 FX Trading Forecasts

GBP: The Pound has made a slight recovery from intra-day lows (1.2686) to reclaim the 1.27 handle as EURGBP pulls back from the 200DMA situated at 0.8792, which in turn could see the cross end its record win streak. However, the outlook remains soft for the Pound, given the continued turmoil in UK politics. Elsewhere, UK data surprised to the downside as the CBI reported that new orders had fallen to the lowest level since the October 2016 as UK manufacturers remain concerned over the ongoing Brexit uncertainty. UK inflation to be released tomorrow, although, data remains on the side-lines.

AUD: Gains in the Australian Dollar were faded after the RBA Governor explicitly stated that the central bank has an easing bias, something we have flagged for some time now (full story). Governor Lowe highlighted that lower rates would support employment and help lift inflation towards target, as a reminder, the RBA stated that a rate cut scenario would need to see inflation remain weak, while the unemployment rate would need to tick up, as such, with this being the case, a rate cut looks set to take place at the June 4th meeting. Alongside this, given the continued uncertainty regarding the trade war tensions between the US and China, the outlook remains soft for AUDJPY.

Gold: Equity markets are slightly firmer this morning after the US announced that they would provide a temporary ease on Huawei restrictions. Consequently, Gold prices have edged lower, having a made a technical break below trendline support from the 2018 low, which in turn could see a test of the 2019 low ($1266).

Gold Prices Tests 2019 Lows, GBPUSD Recovers on EURGBP Drop - US Market Open

Source: DailyFX, Thomson Reuters

DailyFX Economic Calendar: – North American Releases

Gold Prices Tests 2019 Lows, GBPUSD Recovers on EURGBP Drop - US Market Open

IG Client Sentiment

Gold Prices Tests 2019 Lows, GBPUSD Recovers on EURGBP Drop - US Market Open

How to use IG Client Sentiment to Improve Your Trading

WHAT’S DRIVING MARKETS TODAY

  1. Gold Price Sell-Off Continues, Silver Price Hits a Six-Month Low” by Nick Cawley, Market Analyst
  2. AUDUSD Risks Return to Flash Crash Lows as RBA Commits to Rate Cut” by Justin McQueen, Market Analyst
  3. EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play” by Paul Robinson, Currency Strategist
  4. Euro Price Slide Set to Continue as European Elections Draw Closer” by Martin Essex, MSTA, Analyst and Editor
  5. Using FX To Effectively Trade Global Market Themes at IG” by Tyler Yell, CMT , Forex Trading Instructor

— Written by Justin McQueen, Market Analyst

To contact Justin, email him at Justin.mcqueen@ig.com

Follow Justin on Twitter @JMcQueenFX