FX News Today
- 10-year Treasury yields are down -1.1 bp at 2.485% and 10-year JGB yields fell back -2.9 bp to -0.069%.
- Stock markets failed to get lasting support from China stimulus hopes and the rebound in US payrolls on Friday. Indices climbed initially after a document published on the central government website yesterday suggested Beijing would step up the policy of targeted cuts to banks’ reserve ratios in a bid to encourage lending to small and medium sized companies.
- However, while the ASX still managed to close 0.54% higher, Chinese bourses erased earlier gains and Hang Seng and Shanghai Comp are down -0.03% and -0.87% respectively, while the CSI 300 blue chip index is down -0.75%. Topix and Nikkei also struggled and lost -0.42% and -0.25%.
- Earnings reports are coming into focus and investors are positioning for lacklustre results.
- US futures are also heading south, which suggests a correction from the six month high seen last week after the employment report. President Trump pressured the Fed to do more to sustain growth, while official comments from both sides suggest progress in trade talks.
- Oil prices are higher and the front end WTI future trading at USD 63.33 per barrel, amid concerns that fighting in Libya could lead to supply outages.
Charts of the Day
Technician’s Corner
- EURUSD moved in a downwards channel on Friday and early today, and has bounced off its 200HMA at 1.1230, although trading around it in the past couple of hours. Support still remains at 1.1213, while Resistance, after the 200HMA stands at 1.1233. Indicators are showing mixed signals.
- GBPUSD gained some on the last trading hours, bouncing off the 1.3067 Resistance, although the overall trend is still down. Support remains at 1.3027. The MACD is registering positive signs as the Stochastics are showing negative.
- USDJPY made a significant downwards move as the Japanese trade balance showed a surplus, compared to expectations of a deficit. After breaking through the 111.68 Support, the pair bounced off 111.34, as indicators are showing positive signs.
- XAUUSD broke clear of the 1294.5 Resistance level, and is currently trading just above its 200HMA, at 1296. Next Resistance level is 1300.
Main Macro Events Today
- Factory Orders (USD, GMT 14:00) – February orders are expected to have declined by 0.6% m/m, compared to a 0.1% increase in January.
Support and Resistance
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Dr Nektarios Michail
Market Analyst
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