UK Parliament Suspended, Further Escalation of US/China Trade War
Created 08/29/2019 at 09:28AM
FX Strategy 29 Aug 19
CAD and AUD are the top G10 FX gainers today, up 0.21% and 0.1% vs the dollar while NOK and GBP are the top losers, down -0.17% and -0.15% vs the dollar.
Japenese Yen traded lower as risk appetite improved. However, there are still concerns over further escalation of trade wars; U.S PM Donald Trump has made an extra 5% levy on $ 300 billion of Chinese imports official.
Sterling remained in focus after UK PM Boris Johnson suspended parliament and raised the odds on a "no-deal" Brexit.
In the Asian equities space, the Nikkei 225 closed down 0.09% at 20,460.93, Hang Seng closed 0.34% at 25703.5 and Kospi ended -0.4% at 1933.41. The European equities were trading firm with the FTSE up +0.84% at 7174.82, DAX up +0.9% at 11806.44, and CAC up +1.09% at 5427.55. In the rates market, global yields were trading firmer; the US 10-year yield was trading at 1.5063% and the Bund 10-year yield trading at -0.687%. In the energy space, the Brent (front month) is trading down (-0.23%) for the day at $60.35.
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Strategy: Support at 1.1062 for 1.1167 Short-term view: EUR/USD support at 1.1062, MACD and RSI are giving mixed signals Hence, we see a move to 1.1167, possibly 1.1200. Below 1.1062 to open 1.1019, likely 1.0950
GBPUSD Chart (Two-week)
Strategy: Resistance at 1.2265 for 1.2141 Short-term view: GBP/USD resistance at 1.2265, MACD and RSI are weak hence, we see a dip to 1.2190, likely 1.2141. Above 1.2265 to open 1.2306.
USDJPY Chart (Two-week)
Strategy: Resistance at 106.30 for 105.03 Short-term view: USD/JPY has resistance around 106.30 MACD and RSI are giving mixed signals, hence, we see a move lower to 105.03 and 104.29. Above 106.30 opens 106.65-107.05
AUDUSD Chart (Two-week)
Strategy: Resistance at 0.6771 for 0.6725 Short-term view: AUD/USD MACD and RSI are giving mixed signals, we look for resistance at 0.6800 for a move lower towards 0.6725, likely 0.6650. Above 0.6800 we look for 0.6830-0.6869 in the immediate short-term.
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