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USDJPY falls victim to safe-haven demand The USDJPY pair dropped dramatically on Monday after a plunge late last week, witnesses amid a widespread dollar selling following mixed labor market data from the US. The prices extended losses to late-March lows around 110.30 earlier in the day and has settled marginally below 112.00 since then. The latest plunge in the pair was due to a fresh wave of safe-haven demand after Trump threatened tariff hike on China imports. Signs of escalation in the US-China trade war sent global markets lower and fueled demand for the Japanese yen as a result. Until recently, investors hoped that the US and China were getting closer to the deal, so the fresh Trump’s tweet on Sunday came as a surprise and disappointment for markets. In this context, despite some local recovery, USDJPY will likely remain under pressure in the short term as traders continue to closely monitor developments on the trade front. Further signs of escalation may send the pair even lower, with the next support in case of a break below 111.30 comes at 111.00.
by HelenRush
EURUSD unfazed by strong inflation data Extending the post-FOMC retracement from nearly two-week highs, EURUSD struggles to regain the upside momentum for a third day in a row on Friday. The pair failed to confirm a break above 1.12 and retreated to the 1.1150 area which is under threat now. Interestingly, the euro remains under pressure despite better-than-expected European inflation data. According to the preliminary estimates, the euro zone headline CPI rose by 1.7 y/y in April as compares to 1.4% in the previous month while the so-called core CPI edged higher to 1.2% from 0.8% in March. The common currency failed to take advantage from the report as the dollar demand remains elevated ahead of the key US jobs report due later today. Strong figures could send the greenback even higher and thus increase the selling pressure on EURUSD in the short term. The immediate support after a break below the 1.1150 area comes at 1.1110. On the upside, the euro needs to regain the 1.12 handle to see a better short-term technical picture.
by HelenRush
Brent: the broader bullish trend remains intact Crude oil prices managed to strike a third day of gains yesterday but failed to keep the upside momentum and turned lower today as traders are digesting the latest report from the US. According to the EIA data, US crude stockpiles last week jumped by nearly 10 million barrels to 470.6 million barrels, to their highest since September 2017. Meanwhile, production hit a record high of 12.3 million barrels per day. The numbers are fueling fears that stockpiles will continue to rise in the coming weeks as the US refineries are preparing for the traditional maintenance period. On the other hand, further decline in exports from Iran and Venezuela as well as the rising prospects of extending production cuts by OPEC+ in June will likely cap the selling pressure in the market. Brent slipped below the $72 handle but still holds above the $71 support. A break below this level could worsen the short-term technical outlook in the market while the broader bullish trend remains intact.
OANDA:BCOUSD
by HelenRush
Gold fails to gain on dollar weakness Despite a widespread dollar weakness gold prices are struggling to regain a sustainable bullish impetus on Wednesday after a modest recovery yesterday. The bullion failed to break above the $1,286 intermediate resistance that is standing on the way to $1,290 and has settled above $1,280 during the latest trading. It looks like the dollar relationship has fallen apart, at least in the short term, as the precious metal fails to derive support from a sell-off in the greenback. In part, gold is trading lower against the backdrop of firming equities, with trading conditions are thin today as many markets are closed for a public holiday. Investors shrugged off the latest weak Chinese business surveys and turned into a bullish mode after Trump agreed with Democratic leaders to spend $2 trillion on infrastructure. The additional pressure on safe-haven metal comes from the latest round of US-China trade talks, with US Treasury Secretary Steven Mnuchin described the negotiations as productive and said the two countries will continue their talks in Washington next week. Hopes for resolving the trade dispute will likely further support riskier assets and cap the bullish attempts in gold prices. In the short-term, however, the yellow metal could turn positive if the Fed’s dovish tone puts the greenback under additional selling pressure.
TVC:GOLD
by HelenRush
Oil lacks momentum Crude oil prices are making further recovery attempts on Tuesday, after a steep decline late last week. Brent has regained the $71 figure and now targets the $72 barrier but it looks like the market lacks the upside momentum despite the prevailing bullish bias. The mixed dynamics in crude prices is due to emerging concerns over OPEC production increase which coupled with rising output from the United States would offset most of the shortfall expected from US sanctions on Iran. Saudi oil minister Khalid Al-Falih said today that his country won't exceed its OPEC+ deal output limit and also signaled that OPEC+ deal to the end of the year extension is possible. It sounds somehow reassuring but the big question remains Russia’s position on the deal, which makes traders nervious as well. Against this backdrop, the upside potential for Brent will likely remain capped by the mentioned concerns, while in general, the fundamentals continue to point to a tightening market amid the supply cuts from Iran, Venezuela and Libya.
OANDA:BCOUSD
by HelenRush
Gold surge helped by US GDP The rebound in gold prices accelerated on Friday as Treasury yields and the dollar fell on US GDP data. The precious metal saw the largest daily gain in nearly two months and registered a mid-April high above $1,288 after three days of gains. The headline GDP number was really good, with the US economy unexpectedly grew 3.2% versus 2.3% expected. But the details of the report were not so rosy as much of the spectacular rise was due to inventories and trade, while private consumption cooled for a third consecutive quarter. As traders assessed the details of the report, the greenback came under a widespread pressure, which played into the bullion’s hands. However, the yellow metal turned negative on Monday as dollar steadied and stocks recovered. In the days to come, gold could go lower if risk-on sentiment is encouraged by further progress in the US-China trade talks, and the Federal Reserve confirm its commitment to the dovish stance during the upcoming to-day meeting that concludes on Wednesday. Technically, the bullion needs to hold above the $1,270 area in order to avoid a more aggressive selling pressure in the short term.
TVC:GOLD
by HelenRush
USDJPY has a bullish chance After a false technical break above the 1.12 handle, the dollar came under pressure against the Japanese yen on Thursday and registered decent intraday losses. Today, the pair is making some recovery attempts but the impetus looks unconvincing and too timid, at least so far. Some selling pressure on the yen came from the economic front. According to the preliminary data, industrial production in Japan was down 0.9 percent in March, the fastest pace in five years. On a yearly basis, industrial production sank 4.6 percent following the 1.1 percent drop in the previous month. The figures suggest that the country’s economy may post a mild contraction in the first quarter. USDJPY has recovered above the 200-DMA around 111.50 but struggles to get back above the 112.00 level. Further on, the dollar direction will depend on the US Q1 GDP data due later today. Should the numbers surprise to the upside, the greenback will resume the widespread rally. In this scenario, the pair may climb above 112.00 and challenge the 112.20 region.
by HelenRush
Oil market still focused on Iran After a short-term pause and failed corrective attempts on Wednesday, Brent crude resumed the rally today, with prices refreshed early-November highs at $74.55. The market continues to derive support from the “Iranian factor” after the United States said early this week it would end all exemptions for sanctions against the Middle Eastern country. The EIA report yesterday was bearish, with US crude oil production has risen to a record of 12.2 million bpd again, while crude oil stockpiles hit an October 2017 high of 460.63 million barrels. However, the negative market reaction was rather subdued and short-lived, which confirms that traders are still focused on the Iranian sanctions and their potential consequences on the supply side. In the short term, Brent will likely stay elevated and could even extend the rally as concerns over supply glut persist, especially after Saudi Arabia signaled it won’t ramp up crude oil production any time soon despite the end of sanction waivers for all Iranian oil customers.
OANDA:BCOUSD
by HelenRush
EURUSD mired in dismal data EURUSD slipped decently yesterday and challenged the 1.12 support for the first time in three weeks. It was mainly on rising dollar amid waning concerns over the state of the US economy after stronger-than-expected home sales data. On Wednesday, the common currency remains under pressure and continues to challenge the 1.12 area. Fresh euro zone data added to the negative sentiment around the pair. After yesterday’s dismal consumer confidence report, German IFO came in below expectations in all of its components for April, confirming the ongoing slowdown in the region’s largest economy. Business climate index decreased to 99.2 from 99.6, the current assessment dropped to 103.2 from 103.8 while business expectations declined to 95.2 from 95.6. In other news, the ECB said in its monthly economic bulletin that the immediate impact of US car tariffs would be small. This highlights that the monetary authorities aren’t too concerned by the prospects of tariffs, at least for now. The comments brought some relief to the single currency but the overall bearish pressure still persists, and the current dynamics shows the 1.12 handle remains at risk.
by HelenRush
Gold needs to hold above $1,270 Gold prices extend losses for a third week in a row. Last week, the precious metal failed to hold above the 100-DMA after a break below the $1,300 handle and remains under the selling pressure since then. As a result, the prices are oscillating around 2019 lows, threatening the $1,270 figure. The metal failed to derive support from the news that the US will end Iran sanctions waivers, while oil prices spiked to fresh November highs on Tuesday. The dollar demand is also muted though it doesn’t help the bullion either. Risk sentiment looks mixed at the moment, with investors are slowly resuming activity after the Easter holiday. So there are no any significant incentives for gold from this front as well. In general, the undermined appeal of the non-interest-bearing gold will keep the prices under pressure in the near term. The upside correction may take place now if risk aversion arrives at the global financial markets. In the current environment, the yellow metal needs to hold above the $1,270 area in order to avoid a more aggressive decline.
TVC:GOLD
by HelenRush
The US sends oil prices higher After four week of gains in a row, crude oil prices spiked on Monday, with Brent registered fresh November highs at $73.65. Since the early rally, prices have settled around the $73 handle and remain elevated as traders are digesting news from the US. The latest surge was fueled by reports that the US is set to end sanction waivers on the eight countries which import crude oil from Iran within the sanctions reimposed in November, after Trump unilaterally pulled out of a 2015 nuclear accord between Iran and six world powers. Further drop in Iranian exports would continue to squeeze supply in a market which is already tightened due to the U.S. sanctions on Iran and Venezuela, unrests in Libya and Nigeria, as well as OPEC+ efforts. Should Washington officially confirm the latest reports on Iran, Brent could jump even higher, on expectations of even tighter global supply, while some unexpected twists in the statement may send the futures lower amid profit-taking.
OANDA:BCOUSD
by HelenRush
USDJPY stuck in a range on quiet trading USDJPY flat on Friday and little changed on the weekly charts as trading activity is muted on Good Friday/Easter holiday. The pair made some bullish attempts above the 112.00 handle earlier this week but failed to show a sustained momentum amid the unstable risk sentiment. The yen ignored better-than expected Japanese CPI figures. March national consumer price index matched expectations of 0.5% increase versus 0.2% earlier, while national CPI ex-fresh food rose to 0.8% from 0.7%. The Japanese currency was also indifferent to the Bank of Japan’s routine bond market operation. From a technical perspective, the pair needs to hold above the 111.75 intermediate support in order to regain the 112.00 level afterwards. In a wider picture, the downside risks for the greenback are limited as long as the prices are holding above the 200-DMA around 111.50. On the upside, the 2019 high, registered earlier this week, comes at 112.16. USDJPY could challenge this area should risk rally resume, which is unlikely in the short term due to holiday trading.
by HelenRush
EURUSD shows its sensitivity After earlier bullish attempts, the EURUSD pair turned sharply lower on Thursday. The prices failed to break above the 1.13 once again and plunged to nearly one-week lows around 1.1260. The aggressive sell-off was due to fresh data from Germany that disappointed traders. Germany April flash manufacturing PMI came in at 44.5 versus 45.0 expected and 44.1 prior. Services PMI was at 55.6 versus 55.0 expected and 55.4 in March. Meanwhile, the composite PMI came in at 52.1 versus 51.7 expected and 51.4 prior. In fact, the report was not so bad, and market reaction looks overdone as the manufacturing reading haven’t disappointed and improved to that of March. The upside potential for the pair looks limited at this stage as risk sentiment seems to be deteriorating now. Interestingly, investors generally ignored the reports from Chinese officials who said that there has been new progress in negotiating text of trade deal with US. This is in part due to the fact progress towards a deal but is already largely priced in by markets. In the short term, the 1.13 handle remains in focus and still acts as a resistance area. Only a firm break above this barrier will open the way for more sustained gains towards 1.1325 and higher.
by HelenRush
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EURUSD clings to 1.13 EURUSD failed to hold above 1.13 yesterday and finished in the negative territory amid a widespread rally in the greenback despite weak US industrial production data. However, the pair resumed the upside move on Wednesday as dollar turned bearish due to a better risk sentiment in the global financial markets. Investors are cheering stronger-than-expected Chinese data. The world’s second-largest economy expanded by 6.4 percent in the first quarter, faster than the 6.3 percent forecast by economists. The result helped to ease concerns over the global economy and pushed higher riskier assets including the common currency. Interestingly, against this backdrop, the euro ignored the reports that the German government is on course to cut its growth forecasts for 2019 to only 0.5%. It looks like traders are ready for such a move which has been priced in already. In the short term, EURUSD needs to confirm a break above the 1.13 barrier and challenge the 1.1330 intermediate resistance in order to extend the rally. Otherwise, another wave of profit-taking could emerge if risk sentiment deteriorates.
by HelenRush
Gold struggles amid a progress in trade talks Gold is bleeding for a fourth day in a row, with the prices dipped below the 100-DMA again and registered a daily low around $1,283 so far. The bullion was rejected from highs above $1,310 last week and has been trending lower since then. Global financial markets look undecided on risk appetite but US-China trade optimism reduces the safe-haven appeal of the precious metal after US Treasury Secretary Steven Mnuchin said that talks were progressing well and the two countries might be “close to the final round” of their trade negotiations. Also, Japan and the U.S. started the first round of trade negotiations in Washington yesterday, which adds to the bullish pressure on global stocks. Against this backdrop, the bullion struggles to benefit from a weaker dollar. Technically, gold needs to stay above the $1,280 figure in order to avoid a more aggressive sell-off. Only above the $1,300 barrier, the short-term technical outlook will improve somehow.
TVC:GOLD
by HelenRush
Oil market monitors geopolitics and risk trends Crude oil prices are losing ground on Monday, coming off from the five-month highs registered last week below $72 amid the ongoing unrest in Libya. The supply cuts from OPEC, US sanctions against Iran and Venezuela, as well as the fighting in Libya are fueling expectations of tightened global supplies these days. Against this backdrop, the market looks strong and ready for another rally should the situation in Libya deteriorates in the near term. Another bullish factor for Brent is further progress in the US-China trade relations. On Sunday, the US Treasury Secretary Steven Mnuchin said that a US-China trade agreement would go “way beyond” previous efforts to open China’s markets to U.S. companies. He also expressed hopes that the two sides were “close to the final round” of negotiations. Technically, Brent looks overbought at this stage as the prices faced another psychological resistance around the $72 barrier. On the other hand, a daily close above the $71 handle will cap the downside pressure, while further dynamics in prices will depend on geopolitics and risk sentiment across the global markets.
OANDA:BCOUSD
by HelenRush
Yen loses further momentum The USDJPY pair jumped above the 200-DMA yesterday and extended gains to the levels marginally below 112.00 on Friday. The pair rallies for a second day in a row, rebounding after three days of losses as buyers reemerged at bearish attempts around 111.00. The greenback saw a limited downside pressure from the dovish FOMC minutes as traders were ready for such an outcome. Then, a rebound in US yields coupled with strong economic data supported the dollar across the board. The US data showed a larger-than-expected increase in PPI last month, while the initial jobless claims were at the lowest since 1969. In the short-term, the pair could proceed with bullish attempts but the impetus will likely be limited as investors may turn cautious ahead of US banks earning reports due later today. Weak corporate results could hurt risk sentiment and send the safe-haven Japanese currency higher. In this scenario, USDJPY will retreat from the current highs and may get back below the 200-DMA at 111.50.
by HelenRush
Gold rally has stalled After a three-day rally, gold prices turned negative on Thursday as risk-on sentiment has improved on positive developments globally. The bullion jumped to the $1,310 area yesterday but failed to preserve the bullish momentum and retreated, testing the key $1,300 handle again. On Wednesday, the U.S. Treasury Secretary Steven Mnuchin said the US and China have agreed on a mechanism to police any trade agreement they reach. Which fueled investor optimism over trade. Also, investors are cheering news from the UK. In particular, the EU leaders and the U.K. agreed to a flexible extension of the Brexit deadline until Oct. 31. Besides, the dollar feels somehow uncomfortable these days, and the bullion derives additional support from this factor. Technically, gold needs to keep above the $1,300 psychological handle in order to avoid a more aggressive profit-taking in the short term. Once below the $1,280 region, the selling pressure will increase. On the upside, the $1,310 level remains in focus.
TVC:GOLD
by HelenRush
Brent clings to the $71 barrier After a limited correction on Tuesday, crude oil prices are trying to resume the rally today, with Brent struggles to firmly get back above the $71 figure a jump to fresh five-month highs around $71.30 yesterday. The IMF cut its forecast yesterday to the lowest since the financial crisis, which stoke fears that global growth is slowing and curbed demand for riskier assets including oil. Besides, the API report showed that the US crude oil inventories increased 4 million barrels last week, which put the prices under some pressure as well. On the other hand, the bullish catalysts remain intact for the market. And as long as the general picture remains positive, Brent will likely remain in the upper end of the current range. But should the risk sentiment continue to deteriorate in the short term, some corrective moves may come into play again. In the near term, the $71 level is the key region for traders.
OANDA:BCOUSD
by HelenRush
EURUSD upside limited so far EURUSD extends its recovery since Monday, with the pair seems to struggle around the 1.1280 region that is standing on the way to the 1.13 handle. The euro derives support from a widespread dollar weakness, while the threat of US tariffs on the EU limits the upside impetus. Interestingly, Istat just announced no change to Italy’s 2019 GDP growth which stood at 0.9%. 2017 GDP growth was revised up to 1.7% from 1.6% previously, while no changes were made to 2017, 2018 deficit-to-GDP ratios. It is somehow positive for the single currency but the problem is that the Italian economy that slipped into a technical recession late last year has yet to see a real recovery from the crisis. In the short-term, the pair will likely remain in the familiar range, with the price action may get muted ahead of the major events – the ECB meeting and FOMC meeting minutes, both due on Wednesday. So in the coming days, EURUSD could challenge the 1.13 barrier should the Fed disappoint and the European central bank shows no explicit dovishness.
by HelenRush
Libyan crisis drives the yen higher Global financial markets started the new trading week on the defensive as trade-related optimism was overweighed by geopolitical concerns. In particular, Libyan militias battling for control of the country’s capital, Tripoli, launched air strikes against one another on Sunday. The US Secretary of State Mike Pompeo said that the US required the Libyan National Army loyal to Gen. Khalifa Haftar to stop its offensive on Tripoli. Against this backdrop, risk sentiment has deteriorated, which fueled the safe-haven yen demand. USDJPY, which rose to the 111.80 region late last week, turned lower on Monday and got back below the 200-DMA around 111.50. The pair so far registered a low of 111.34 and so far stays relatively firmly above the 111.00 handle. Amid rising geopolitical tensions, the yen could gain further in the short term should the escalation continue. On the other hand, however, fresh positive news from the US and China could lift investor sentiment again. So, the downside potential for the USDJPY pair looks limited in a bigger picture.
by HelenRush
Gold struggles for direction At the start of the week, gold prices tried to recover above the $1,300 handle but failed and since then the bullion has been directionless, oscillating around the $1,290 level. Yesterday, the precious metal briefly touched a one-month low below $1,281 amid dollar recovery but finished the day in the positive territory. Today, the prices are under pressure again. The sentiment towards gold looks mixed amid the factors that are pulling investors in opposite directions. In particular, the US-China trade talks are moving towards a deal, with the US President Donald Trump said on Thursday the two sides could announce a deal within four weeks. This fuels market optimism and adds to risk-on sentiment across the global financial markets. On the other hand, Brexit uncertainty and evidence of global slowdown continue to cap bulls and thus limit the downside potential in gold prices. In the short term, the bullion will likely continue to trade around the $1,290 figure unless the upcoming US NFP employment data disappoint and send the riskier assets lower, fueling demand for safe-haven metal.
TVC:GOLD
by HelenRush
Brent retreats from fresh tops After reaching fresh five-month highs around the $70 psychological mark, Brent retreated slightly yesterday, with the bearish pressure is intensifying on Thursday as the prices are flirting with $69 after data showed a larger-than-expected jump in U.S. crude inventories. According to the EIA report, inventories rose 7.2 million barrels to 449.5 million barrels in the week ended March 29, while production increased to 12.2 million barrels per day, which is a new record high. In general, market reaction to the report was rather muted but anyway played against the bulls along with technical factors as the psychological level has deterred buyers.  In a wider picture, the market is still supported by OPEC efforts, US sanctions against Iran (and potentially tighter sanctions) and Venezuela, and expectations of a steady demand in the coming months. A break below $69, should the current bearish correction will continue, will open the way towards the $68.80 intermediate support.
OANDA:BCOUSD
by HelenRush