Investing.com - Financial Markets Worldwide
🥇 First rule of investing? Know when to save! Up to 55% off InvestingPro before BLACK FRIDAYCLAIM SALE

Market Brief: A Relief Rally Takes Shape

ByCity Index
AuthorMatt Simpson
Published 12/05/2019, 01:54 AM
EUR/USD
-
GBP/USD
-
USD/CAD
-
JP225
-
Daily % Candles

FX Brief:

  • Australian retail sales went nowhere in October. A big fat 0%. Nil. Exports also slumped to -5% versus +3% expected and private house approvals also fell -7%. Considering yesterday’s weak GDP, it’s not a great end to the year data-wise after RBA held a relatively optimistic view in Tuesday’s statement.

  • Japan officially launched its economic stimulus package, which is expected to boost GDP by 1.4% according to ‘sources’ from the government. If growth is to remain as elusive as CPI, which has missed target for several years now, let’s not hold our breath. Chances are BOJ will go further into negative rates net year.

  • RBNZ Governor Orr signaled that rates are on hold in February. Given the slew of better-than-expected economic data and fiscal stimulus unveiled by the government, the upside potential for NZD pairs remains favorable as we enter 2020.

    • Price Action:

  • DXY remains under pressure, although yesterday’s low found support at the monthly S1 pivot yesterday, and today’s action is finding support around the 200-day eMA. So perhaps the downside pressure are easing off, ahead of tomorrow’s NFP report. (Unless today’s OPEC meeting says otherwise).

  • EUR/USD printed a prominent bearish pinbar and closed below 1.1100 to warn of a bull-trap. Near-term bias remains bearish below 1.1100.

  • USD/CAD sits precariously on 1.3215 support ahead of today’s OPEC meeting. Judging from the bearish momentum which slammed prices down here, path of least resistance appears to be lower.

  • GBP/USD is sitting pretty at its 7-month high, after breaking out of its inverted head and shoulders pattern yesterday. Whilst the pattern projects a target around 1.3200, we’d prefer to see at least a minor pullback and target 1.3177 resistance first. Bias remains bullish above 1.3000.
    • Asian Cash Indices % Change

    Equity Brief:

  • A relief rebound has taken shaped in key Asian stock markets today after two sessions of consecutive losses. The catalyst for the rebound has been another “optimistic” trade-related headline as per reported by Bloomberg in yesterday’s European session that stated U.S and China are getting closer to a deal that would avoid additional tariffs to be implemented on 15 Dec. In addition, U.S. President has been quoted saying that trade discussions with China are going very well.

  • In the short-term, trade-related headlines will be the main driver that determines the intraday swings until more clarity can be determined on the details of the Phase One trade deal.

  • One of the best performers is from Japan’s Nikkei 255 which has recorded a gain of 0.68% so far that has been reinforced by the Japanese government’s latest fiscal stimulus plan amounting to 13 trillion yen to support stalling growth.

    • Price Action (derived from CFD indices):

  • Japan 225: Broke above the minor descending trendline from 02 Dec 2019 high and transited back into a minor churning phase within a medium-term sideways range configuration in place since 07 Nov 2019 with its range resistance at 23650. Short-term supports now rest at 23150 follow by 22980 next (yesterday’s swing low area).

  • Hong Kong 50: Minor downtrend remains intact with key short-term resistance at 26300. A broke below 25950 (yesterday’s low) reinforces a further down move to test the next near-term support at 25660/500 (28 Sep/10 Oct 2019 swing low.

  • Australia 200: Minor mean-reversion rebound in progress with key short-term support now at 6630 (former 21 Nov 2019 minor swing low) that has been broken to the upside. The next intermediate resistance stands at6740/6780 (50%/61.8% retracement of the recent decline from 29 Nov high to 03 Dec 2019 low).

  • Germany 30: Continued to churn within a medium-term sideways range configuration in place since 19 Nov 2019 with its range resistance at 13350. Near-term supports to watch will be at 13070 and 12980 (02/03 Nov 2019 swing low areas).

  • US SP 500: Yesterday’s rebound from the 3070 low of 03 Dec has stalled at the 61.8% Fibonacci retracement of the recent decline from 02 Dec high to 03 Dec 2019 low and the 3122 minor swing high area of 02 Dec, European session. A break below 3090 reinserts the bearish tone while a clearance above 3122 see a further push up to retest the all-time high area at 3155.
    • Calendar

    Original Post

    Latest comments

    Loading next article…
    Install Our App
    Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
    Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
    Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
    It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
    Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
    © 2007-2024 - Fusion Media Limited. All Rights Reserved.