Market Sentiment Recovers on US Easing of Huawei Restrictions | Webinar

Market sentiment news and analysis:

  • The US has eased trade restrictions on Chinese technology company Huawei temporarily, boosting market confidence.
  • However, sentiment remains poor on fears that the US-China trade dispute could yet escalate further.

Market confidence lifted by US easing of curbs on Huawei

Trader sentiment has improved Tuesday on news that the US has granted Huawei a license to buy US goods until August 19 but confidence remains poor as the US-China trade dispute rumbles on.

In this webinar, I looked at the charts of the major currencies, stock markets and commodities, at the sentiment indicators likely to influence markets for the rest of the week and at the latest positioning data.

Resources to help you trade the forex markets:

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:

— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

US Dollar News: USD Price Analysis and Charts.

  • US dollar bullish run continues, threatening recent highs.
  • Fed speak and FOMC minutes may underpin latest up-tick.

DailyFX Q2 Forecasts and Top 2019 Trading Opportunities.

US Dollar News – Federal Reserve Speeches and FOMC Minutes up Next

The US dollar remains in favor with investors as risk sentiment sours on the US-China trade spat, global growth concerns and Brexit, to name just a few market negatives. Further, while the next move in US interest rates is very likely lower, the US dollar still commands a yield premium over a wide range of other currencies, helping to underpin its value. This is reflected on the daily chart with a continuous series of higher highs and higher lows from January 10 this year.

While boosted by risk concerns, the US dollar (DXY) will likely need a fresh stimulus to break above the April 26 high at 97.84, after which the greenback will back at highs seen in May 2017. Over the next two days, five different Federal Reserve members will be speaking, and their remarks will be needed to be monitored closely for any clues as to the strength, or not, of the US economy and the path of potential interest cuts ahead.

US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

The DailyFX Calendaris a comprehensive guide to all market moving data releases and events.

Later Wednesday, the FOMC minutes from the May 1 meeting will be released and these will be parsed for any further explanation from Chair Powell on how ‘transitory factors’ are keeping US inflation in check. If the Fed believes that inflation in the US is picking-up towards target, any interest-rate cut may be pushed further down the line until price pressures consistently sit near the 2% target.

The US dollar (DXY) chart has enjoyed a positive run later, six green candles out of the last seven disregarding Sunday’s, and trades above all three moving averages. The May 3 sell-off candle’s high at 97.61 is within reach, which would leave the previously mentioned 97.84 as the short-term target if positive momentum continues. The CCI indicator is currently showing the US dollar in overbought territory.

US Dollar (DXY) Daily Price Chart (August 2018 – May 21, 2019)

US Dollar News: USD Price Nears 2-Year High; Fed Speak, FOMC Minutes Loom

IG Client Sentiment data show how retail traders are positioned in a wide range of asset classes and how daily and weekly sentiment changes can help drive momentum.

— Written by Nick Cawley, Market Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play

The U.S. Dollar is looking stronger against pretty much everything except perhaps the Japanese Yen. The Euro is slowly rolling over towards last month’s low, while GBPUSD is on the verge of testing an important inflection point that may induce a bounce. Gold price is testing the August trend-line, a failure to hold could quickly lead to lower levels.

Technical Highlights:

  • EURUSD looking towards April lows
  • GBPUSD nearing big inflection point
  • USDJPY posting potential bear-flag
  • Gold price hanging on August t-line

Fresh Q2 Forecasts are out for major markets and currencies. Check them out on the DailyFX Trading Guides page.

EURUSD looking towards April lows

The Euro continues to weaken as most currencies are against the Dollar, with the April low around the 11110 mark as the next level of meaningful support. Just below there lies a series of underside trend-lines to be mindful of if weakness should carry the Euro down there. For months the pattern has been for a drop to a new swing-low, then an immediate bounce. I’ll continue to expect this to be the case until we see definitive signs of a change in behavior.

EURUSD Daily Chart (April lows, underside t-lines near)

EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play

Find out where our analysts see the Euro heading in the coming weeks based on both fundamental and technical factors – Q2 EUR Forecast

GBPUSD nearing big inflection point

Cable has a big spot to watch in the 12660s, where the August 15 low and January 15 spike-low arrive within only a few pips of one another. The fact the August low held meaning and that we had a 200-point reversal-day at the same level, make it a worthy spot to watch for a reaction. Furthering this notion is the fact that GBPUSD has been beaten down quite a bit lately and large swings for some time now have seen strong countertrend moves at the least.

GBPUSD Daily Chart (12860s big inflection point)

EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play

USDJPY posting potential bear-flag

USDJPY is countering its recent downdraft, but in doing so it is working on a possible bear-flag on the 4-hr chart. Price needs to drop below the lower parallel to validate it, first. For even more confirmation, a closing candle below the most recent swing-low at 10980 is preferred before looking for another swing lower.

USDJPY 4-hr Chart (potential bear-flag)

EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play

Find out where our analysts see USD heading in the coming weeks based on both fundamental and technical factors – Q2 USD Forecast

Gold price hanging on August t-line

Gold price is in a precarious spot with it back at the August trend-line. It’s to be trusted as support until broken, but trust is wearing thin. A break below will have the double-bottoms at 1266 in focus, followed by the 200-day at 1257. The thinking is this, whether we first see a bounce or not gold will likely trade lower at some point soon.

Gold Price Chart (Testing August trend-line)

EURUSD, GBPUSD, USDJPY & Gold Price Levels in Play

Find out where our analysts see gold heading in the coming weeks based on both fundamental and technical factors – Q2 Gold Forecast

Resources for Forex & CFD Traders

Whether you are a new or an experienced trader, DailyFX has several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market Analyst

You can follow Paul on Twitter at @PaulRobinsonFX

AUDUSD Risks Return to Flash Crash Lows as RBA Commits to Rate Cut

AUD Analysis and Talking Points

  • RBA Governor Lowe Commits to Easing Bias
  • Australian Dollar Technical Analysis | Return to Flash Crash Lows

DailyFX Q2 2019 Trading Forecasts for AUD

RBA Governor Lowe Commits to Easing Bias

Overnight, 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 to take place at the June 4th meeting. However, with markets near enough fully priced in for a rate cut at the upcoming meeting the focus however will be on the outlook for further easing, which expectations are for another 25bps cut to be delivered by November.

AUDUSD Risks Return to Flash Crash Lows as RBA Commits to Rate Cut

Source: RBA

Australian Dollar Technical Analysis | Return to Flash Crash Lows

The outlook for the Australian Dollar remains soft, particularly given that the RBA are gearing up for cutting interest rates, while trade war tensions between the US and China have also escalated. Consequently, there is a risk that AUDUSD could make a return towards flash crash levels. On the weekly timeframe, the the pair remains weak. Focus in on last weeks lows at 0.6865, in which a break below opens up for a test of support 0.6830. Below there sees little in the way of notable support till 0.6740.

AUDUSD PRICE CHART: Weekly Time Frame (Oct 2017 – May 2019)

AUDUSD Risks Return to Flash Crash Lows as RBA Commits to Rate Cut

AUD TRADING RESOURCES:

— Written by Justin McQueen, Market Analyst

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

Follow Justin on Twitter @JMcQueenFX

Euro Price Slide Set to Continue as European Elections Draw Closer

EUR price, news and analysis:

  • EURUSD is continuing the drift lower of the past week on concerns that the latest European Parliament elections will see a rise in populism and Euro-skepticism.
  • That’s bad news for the Euro, which could yet lose more ground against a backdrop of trade wars and Brexit.

Euro price weakness may persist

European Parliament elections take place this week, beginning Thursday and ending Sunday, with the results likely to confirm the rise of populism and Euro-skepticism. That could spell further losses for the Euro, which has already dropped to its lowest level since May 3 and has been easing for the past week.

EURUSD Price Chart, Hourly Timeframe (May 13-21, 2019)

Latest EURUSD price chart.

Chart by IG (You can click on it for a larger image)

Click on this link for a preview of the main events in the Eurozone this week

And here for the technical outlook for the Euro

For traders, one caveat is that this expected move away from the EU’s mainstream political parties may be already priced in to the EURUSD exchange rate. A second is that price volatility remains low and the elections look unlikely to boost it.

However, investors will have time to analyze the election outcome thoroughly between the results Sunday and the opening of markets Monday – particularly necessary as the results will be clouded by national concerns in each EU country, with the debate centering on Brexit in the UK, for example. Still, looking further ahead, a good showing by far-right political parties will likely raise doubts again about the stability of the EU.

There could also be a power vacuum as a move away from center-right and center-left politicians leaves whichever party wins the most seats having to rely on resurgent Green parties for a majority.

From a long-term technical perspective, the downtrend that began eight months ago remains in place and a further decline to 1.10 looks possible. Sentiment data also point to a weaker EURUSD, with 59% of retail traders long and just 41% short – a bearish signal from a contrarian viewpoint.

Euro price outlook worsens as Italian politics move into focus

Resources to help you trade the forex markets:

Whether you are a new or an experienced trader, at DailyFX we have many resources to help you:

— Written by Martin Essex, Analyst and Editor

Feel free to contact me via the comments section below, via email at martin.essex@ig.com or on Twitter @MartinSEssex

DAX 30 & CAC 40 Technical Update: Support, Patterns to Watch

DAX 30/CAC 40 Technical Highlights

  • DAX sell-off brings December trend-line into play
  • CAC 40 could be in the process of creating an H&S pattern

Check out the DailyFX Q2 Trading Forecasts to find out where our team of analysts see the Euro, DAX, and other markets are headed in the coming weeks.

DAX 30 sell-off brings December trend-line into play

The DAX taking a hit yesterday has important trend-line support in play again. The trend-line running up from December was proven to be a worthy line of support last week when the DAX posted a swift reversal-day on Wednesday.

Further weakness will quickly have the trend-line back in play, followed by the most recent swing low at 11844. The area right around there has held on several occasions since the April 3 gap. A break below would have the trend-line broken and a lower-low taking shape. This would be reason to look for a sell-off to deepen.

But as always, support is support until broken. We may very well see another strong stance by buyers should trend, horizontal support get tested here again soon. Should that be the case, then would-be longs may have another opportunity to buy the market with a solid backstop in place to use for assessing risk.

All-in-all, the next few sessions could bring further clarity as to how the DAX wants to shape up for the foreseeable future. Right now, it is pretty clear that the aforementioned levels are important, it’s just a question of how the market wants to respond to them on any further testing.

DAX 30 Daily Chart (t-line, 11844)

DAX 30 & CAC 40 Technical Update: Support, Patterns to Watch

CAC 40 could be in the process of creating an H&S pattern

The CAC 40 is presenting the possibility of a head-and-shoulders top with its most recent turn lower. It is only a scenario at this time until we see the neckline broken, but one worth tracking. A break below the neckline would likely coincide with the DAX breaking support. For now, in wait-and-see mode…

CAC 40 Daily Chart (Possible H&S pattern)

DAX 30 & CAC 40 Technical Update: Support, Patterns to Watch

Want to learn more about trading the DAX? Check out ‘How to Trade the DAX’, and join me weekly for technical updates in the Indices and Commodities webinar.

Forex & CFD Trader Resources

Whether you are a new or experienced trader, we have several resources available to help you; indicator for tracking trader sentiment, quarterly trading forecasts, analytical and educational webinars held daily, trading guides to help you improve trading performance, and one specifically for those who are new to forex.

—Written by Paul Robinson, Market AnalystYou can follow Paul on Twitter at @PaulRobinsonFX

GBPUSD Price Slumps as Brexit Turmoil, USD Strength Takes its Toll

Sterling (GBP) Price and Latest Brexit News

  • Sterling hits a four-month low against the US dollar.
  • Chart looks oversold, but client sentiment remains heavily bearish.

Q2 2019 GBP and USD Forecasts andTop Trading Opportunities

GBPUSD – Bearish Sequence Continues Unchecked

Sterling is under heavy pressure against a resurgent US dollar and is touching levels last seen in mid-January this year and the recent sell-off continues. The recent break of support levels at 1.2894 and 1.2773 has left the pair without an anchor and sellers remain firmly in control. The recent breakdown has been primed by yet more Brexit confusion and concern as UK PM May continues to put forward her Withdrawal Agreement despite it already having been voted down in the House of Commons three times.

GBPUSD Price Rattled by Heightened Brexit Fears, European Elections Near

The US dollar continues its recent ascent with the US dollar basket (DXY) at a two-week high of 97.50 and threatening to make a fresh two-year high at 97.84. A break and close above here would produced another higher high on the longer-dated chart and reinforced further upside. Wednesday’s FOMC minutes and/or Friday’s US durable goods orders may well fuel this move higher.

DailyFX Economic Calendar

GBPUSD may find some respite on the downside from the January 15 ‘spike low’ at 1.2669 yet this support looks fragile. The CCI indicator does show the pair as heavily oversold and this again may put a brake on any further sell-off in the short-term.

GBPUSD Daily Price Chart (August 2018 – May 21, 2019)

GBPUSD Price Slumps as Brexit Turmoil, USD Strength Takes its Toll

Retail traders are 81.7% net-long GBPUSD according to the latest IG Client Sentiment Data. See how recent daily and weekly positional changes affect GBPUSD and currently give us a stronger bearish contrarian trading bias.

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

What is your view on GBPUSD – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at nicholas.cawley@ig.comor via Twitter @nickcawley1.

GBPUSD Rate Breaks Bearish Sequence Despite Cautious BoE Rhetoric

British Pound Talking Points

GBP/USD remains under pressure ahead of the European Parliament elections as Prime Minister Theresa May struggles to make progress on the Brexit deal, but recent price action raises the risk for a rebound in the Pound Dollar exchange rate as it snaps the series of lower highs & low from earlier this month.

Image of daily change for major currencies

GBPUSD Rate Breaks Bearish Sequence Despite Cautious BoE Rhetoric

Image of daily change for gbpusd rate

It remains to be seen if the EU election will impact the Brexit negotiations as households select fresh representatives to the European Parliament, and the ongoing rift between U.K. lawmakers may produce headwinds for the British Pound as it puts pressure on the Bank of England (BoE) to abandon the hiking-cycle.

A recent speech by Deputy GovernorBen Broadbent suggests the BoE will remain on the sidelines as the Monetary Policy Committee (MPC) member points out that ‘business investment fell in every quarter last year and surveys suggest the underlying trend is still negative.’ In turn, the BoE may stick to the same script at the next meeting on June 20 as the committee ‘judges that there is currently a small margin of excess supply in the economy,’ and the wait-and-see approach for monetary policy may continue to drag on the British Pound as Governor Mark Carney and Co. reiterate that ‘the economic outlook will continue to depend significantly on the nature and timing of EU withdrawal.

Image of DailyFX economic calendar

However, fresh updates to the U.K. Consumer Price Index (CPI) may prop up the British Pound as both the headline and core reading for inflation are expected to pick up in April, and signs of sticky price growth may keep the BoE on track to further normalize monetary policy as ‘the Committee judges that, were the economy to develop broadly in line with its Inflation Report projections, an ongoing tightening of monetary policy over the forecast period, at a gradual pace and to a limited extent, would be appropriate to return inflation sustainably to the 2% target at a conventional horizon.’

With that said, GBP/USD may face increased volatility over the coming days, but the near-term decline in the Pound Dollar exchange rate appears to have shaken up market participation as retail sentiment remains stretched.

Image of IG client sentiment for gpbusd

The IG Client Sentiment Report shows 81.7%of traders are net-long GBP/USD compared to 73.7% at the end of April, with the ratio of traders long to short at 4.47 to 1. Keep in mind, traders have remained net-long since March 26 when GBP/USD traded near 1.3210 region even though price has moved 3.3% lower since then.

Profit-taking behavior may explain the ongoing decline in net-short interest as GBP/USD sits near the monthly-low (1.2711), but the extreme reading in net-long position suggests the retail crowd is still attempting to fade the recent decline in the pound-dollar exchange rate as its sits near the highest reading for 2019.

The persistent tilted in retail interest offers a contrarian view to crowd sentiment especially as GBP/USD snaps the bullish trend from late-2018, with the Relative Strength Index (RSI) highlighting a similar dynamic, but recent price action raises the risk for a near-term rebound as the exchange rate fails to extend the series of lower highs & lows from the previous week.

Sign up and join DailyFX Currency Strategist David Song LIVE for an opportunity to discuss potential trade setups.

GBP/USD Rate Daily Chart

Image of gbpusd daily chart

  • Keep in mind, the broader outlook for GBP/USD is no longer bullish as the exchange rate snaps the upward trend from late last year after failing to close above the Fibonacci overlap around 1.3310 (100% expansion) to 1.3370 (78.6% expansion).
  • In turn, the advance from the 2019-low (1.2373) may continue to unravel as the Relative Strength Index (RSI) highlights a similar dynamic, with the oscillator now tracking the bearish formation carried over from March.
  • The break/close below the Fibonacci overlap around 1.2760 (38.2% retracement) to 1.2800 (50% expansion) brings the 1.2610 (23.6% retracement) to 1.2640 (38.2% expansion) region on the radar, but will keep a close eye on the RSI as it struggles to push into oversold territory, with failure to hold below 30 raising the risk for a rebound in the exchange rate.

For more in-depth analysis, check out the 2Q 2019 Forecast for GBP

Additional Trading Resources

Are you looking to improve your trading approach? Review the ‘Traits of a Successful Trader’ series on how to effectively use leverage along with other best practices that any trader can follow.

Want to know what other currency pairs the DailyFX team is watching? Download and review the Top Trading Opportunities for 2019

— Written by David Song, Currency Strategist

Follow me on Twitter at @DavidJSong.

Samsung Lifts KOSPI on US Huawei Ban, FTSE 100 Outlook More Bearish

Asia Pacific Markets Wrap Talking Points

  • Equities higher in Asia, KOSPI gains as Samsung welcomes US ban of Huawei
  • ASX 200 fails to find much upside momentum despite firming RBA rate cut bets
  • FTSE 100 outlook bearish on brewing technical signals ahead of BoE speech

Find out what retail traders’ equities buy and sell decisions say about the coming price trend!

Top Asia Market Developments

Equities generally rose during Tuesday’s Asia Pacific trading session after earlier in the day, the US announced a temporary 90-day extension granted to Huawei before it gets blacklisted for national security reasons. This helped to ease tensions that have left markets in a state of anxiety given recent escalation in US-China trade war fears.

China’s Shanghai Composite performed well, rising more than 1.5% heading towards the close. Another solid performer due to the Huawei situation was South Korea’s benchmark KOSPI index (+0.9%). This was thanks to a more-than 4% surge in Samsung Electronics shares after M. S. Hwang, an analyst from the company, noted that a ban on Huawei could boost sales of their smartphones in Europe and China.

Elsewhere, the ASX 200 struggled to find upside momentum despite decidedly dovish RBA meeting minutes and commentary from Governor Philip Lowe. These two developments have greatly increased the probability that the central bank might deliver a rate cut in June. What is not much of a surprise is that AUD/USD inched closer to trimming this week’s upside gap following local federal elections.

The Remaining 24 Hours

A top-tier event risk over the remainder of the day will be an upcoming speech various Bank of England members, including Governor Mark Carney. Lately, fading confidence in a Brexit deal has extensively weakened the British Pound with the FTSE 100 down from April peaks. We shall see what policymakers have to say given how much the central bank has expressed interest in hiking that is only being clouded by EU-UK divorce talks.

FTSE 100 Technical Analysis

Looking at FTSE 100 daily chart below, we can see what appears to be the formation of a bearish head and shoulders pattern. The right shoulder could be created under 7360 if the index falls through what seems to be a key psychological barrier between 7267 and 7227. Countering this development is a bullish-contrarian signal from IG Client Sentiment readings, but this may change soon with 50% of net-positioning short.

Want to learn more about how trader positioning may drive the FTSE 100 and various other equities? Tune in each week for live sessions as I cover how sentiment can be used to identify prevailing market trends!

FTSE 100 Daily Chart

Samsung Lifts KOSPI on US Huawei Ban, FTSE 100 Outlook More Bearish

Chart Created in TradingView

FX Trading Resources

— Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

Gold Prices Probe Trend-Defining Chart Barrier, OECD Update Eyed

GOLD & CRUDE OIL TALKING POINTS:

  • Gold prices stalled at chart support after hitting two-week low
  • Crude oil prices unable to make hay of US-Iran spat, for now
  • OECD outlook update may stoke risk aversion, API data due

Gold prices paused to digest after five days of consecutive losses brought them to a two-week low. An updated OECD Economic Outlook seems likely to bring downgrades of growth and inflation bets, establishing a risk-off mood. That may boost haven demand for the US Dollar, weighing on the anti-fiat yellow metal. Traders may withhold conviction ahead of Wednesday’s FOMC minutes release however, limiting follow-through.

Meanwhile, crude oil prices found a bit of a lift as US President Donald Trump threatened Iran but the move higher struggled for follow-through, with the WTI ultimately unable to make headway beyond its near-term trading range. If sentiment unravels, weakness alongside stocks seems likely. API inventory flow data is also due. It will be sized up relative to bets on a 1.7-million-barrel drawdown.

Did we get it right with our crude oil and gold forecasts? Get them here to find out!

GOLD TECHNICAL ANALYSIS

Gold prices continue to hover at support marked by a rising trend line set from mid-August 2018. This is reinforced by the 1260.80-63.76 inflection zone, with a daily close below the latter barrier exposing the 1235.11-38.00 region next. Alternatively, a breach of resistance in the 1303.70-09.12 area eyes a minor hurdle in the 1323.40-26.30 price band, followed by February’s high at 1346.75.

Gold price chart - daily

CRUDE OIL TECHNICAL ANALYSIS

Crude oil prices remain capped below a dense bloc of overlapping resistance levels in the 63.59-67.03 area. Near-term support is at 60.39, with a daily close below that exposing the 57.24-88 area. Alternatively, a push all the way through resistance targets the $70/bbl figure thereafter.

Crude oil price chart - daily

COMMODITY TRADING RESOURCES

— Written by Ilya Spivak, Currency Strategist for DailyFX.com

To contact Ilya, use the comments section below or @IlyaSpivak on Twitter