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RBNZ Rate Cut & China/US Trade War

Updated 09:26AM 07/08/2019

JPY and EUR are the top G10 FX gainers today, up 0.23% and -0.04% vs the dollar while NZD and AUD are the top losers, down -1.56% and -0.47% vs the dollar. Kiwi fell sharply (almost 2%) after RBNZ delivered a 50bp rate cut. The New Zealand central bank also said that negative rates were possible. This has surprised the Forex market which has looked for safety in Japanese Yen as investors become worried over Global growth prospects. The trade wars are also likely to escalate with strong Dollar and weak Yuan likely to be an issue for the U.S. President Donald Trump. Elsewhere, Sterling remains subdued, still focused on a "no-deal" scenario. In the Asian equities space, the Nikkei 225 closed -0.33% lower at 20,516.56, Hang Seng closed 0.08% at 25997.03 and Kospi ended -0.41% at 1909.71. The European equities were trading firm with the FTSE up +0.62% at 7216.48, DAX up +1.16% at 11701.84, and CAC up +1.04% at 5289.07. In the rates market, global yields were trading weaker; the US 10-year yield was trading at 1.6802% and the Bund 10-year yield trading at -0.57%. In the energy space, the Brent (front month) is trading down (-0.1%) for the day at $58.88.

 

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Daily Pivots for Key Currency Pairs

 
 

Economic Calendar

 
 

10-year Yields Chart (6-month)

 
 

USD-Index Daily Chart (6-month)

 
 

Brent Front Month Daily Chart (6-month)

 
 

Trade Weighted Basket Hourly (two-week)

 
 

(Content and Data by Tradermade)

 

Major Currency Pairs

 

EURUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.1234 for 1.1110
Short-term view: EUR/USD resistance at 1.1234, MACD and RSI are bearish. Hence, we see a move lower to 1.1110. Above 1.1234 to open 1.1280.

 

GBPUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.2190 for 1.2112
Short-term view: GBP/USD resistance at 1.2190, momentum is still bearish and we see a dip to 1.2112, likely 1.2046. Above 1.2190 to open 1.2243.

 

USDJPY Chart (Two-week)

 
 

Strategy: Resistance at 106.65 for 105.50
Short-term view: USD/JPY has resistance around 106.65, momentum is still bearish hence, we see a move lower to 105.50 and 105.03 Above 106.65 opens 107.05

 

AUDUSD Chart (Two-week)

 
 

Strategy: Resistance at 0.6771 for 0.6650
Short-term view: AUD/USD short-term downtrend continues, we look for resistance at 0.6771 for a move lower towards 0.6650, likely 0.6568. Above 0.6771 we look for 0.6830 in the immediate short-term.