Oil Rallies but Trade War Fears Remain

Updated 08:15AM 05/05/2020

In the G10 FX Market, JPY and CHF are the top gainers today, up 0.27% and 0.22% versus the dollar while AUD and NZD are the top losers, down -1.0% and -0.65% versus the dollar, respectively.

In the G10 FX Market, JPY and USD are the top gainers today while NOK and SEK are the top losers, down -1.03% and -0.64% versus the dollar, respectively.

 

The RBA left rates on hold but forecasted a bleak economy with a sharp contraction in the first six months of this year and double-digit unemployment rate. The sentiments were positive on oil rally but sino-U.S. trade war fears tempered risk sentiments.

 

In the rates market, global yields were trading mixed today. The German 10-year was trading at -0.564, up 2.2bp. The UK 10-year was trading at 0.238, down -0.8bp. The US 10-year was trading at 0.608, down -1.0bp.

 

The U.S. dollar rallied versus major currencies amid fears of a trade war resumption between U.S. and China. In our view, this could damage the already fragile system but more than that the uncertainty alone will kill any risk appetite.

 

In the Asian equities, markets were trading weaker today. The Kospi was trading at 1895.37, down -2.68%. The Hang Seng was trading at 23542.0, down -4.47%. In the European equities, indices were trading weak today. The FTSE 100 was trading at 5749.4, down -0.24%. The Euro Stoxx 50 was trading at 2830.12, down -3.34%. The DAX 30 was trading at 10531.75, down -3.04%.

 

10-year Yields Daily Chart (1-month)

 
 

Daily FX Pivots

 
 

Brent Crude Daily Chart (1-month)

 
 

(Content and Data by Tradermade)

 

Forex Chart and Technical Analysis

 

EURUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.0926 for 1.0876
Short-term view: EUR/USD resistance comes in at 1.0926 MACD and RSI have a bearish bias. Hence, we see a dip to 1.0876 enter at 1.091. Above 1.0926 to open 1.0957

 

GBPUSD Chart (Two-week)

 
 

Strategy: Support at 1.2445 for 1.2486
Short-term view: GBP/USD MACD and RSI are flat but support comes in at 1.2445 and we see a dip to 1.2486 enter at 1.2459. Below 1.2445 to open 1.2403

 

USDJPY Chart (Two-week)

 
 

Strategy: Resistance at 106.81 for 106.54
Short-term view: USD/JPY resistance comes in at 106.81 MACD and RSI have a bearish bias. Hence, we see a dip to 106.54 enter at 106.72. Above 106.81 to open 106.99

 

AUDUSD Chart (Two-week)

 
 

Strategy: Support at 0.6411 for 0.6474
Short-term view: AUDUSD support comes in at 0.6411 MACD and RSI have a bullish bias. Hence, we see a bounce to 0.6474 enter at 0.6432. Below 0.6411 to open 0.6388