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Yen Moving & Bond Market Focus

Updated 11:24AM 16/08/2019

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FX Strategy 16 Aug 19


GBP and AUD are the top G10 FX gainers today, up 0.45% and 0.09% vs the dollar while SEK and CHF are the top losers, down -0.39% and -0.32% vs the dollar.


The EUR dropped to a two-week low versus the dollar following strong U.S. retail sales data. Strong U.S. data have calmed investor nerves who were worried over a U.S. recession.


On the trade wars front, China retaliated by vowing to counter the latest U.S. tariffs but also said that that they were willing to meet the United States halfway on a possible trade deal. In our view, trade war concerns will continue to dominate the market but it will be interesting to see how the market react if economic data continue to alleviate global slowdown fears.


GBP rose for a second straight day today after retail sales and other economic data showed improved domestic outlook. The risk sentiments were also calmed as plans to block a no-deal Brexit were proposed by the opposition parties. GBP is still vulnerable but any news on negating "no deal" scenario will lead to short-term strength.


In the Asian equities space, the Nikkei 225 closed up 0.06% at 20,418.81, Hang Seng closed up 0.94% at 25734.22 and Kospi ended down -0.58% at 1927.17. The European equities were trading firm with the FTSE up +0.8% at 7123.69, DAX up +1.12% at 11540.24, and CAC up +1.01% at 5289.88. In the rates market, global yields were trading mixed; the US 10-year yield was trading at 1.5589% at its lowest since August 2019 and the Bund 10-year yield was trading at -0.701%. In the energy space, the Brent (front month) is trading up (1.44%) for the day at $59.07.


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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 1.1120 for 1.1019
Short-term view: EUR/USD resistance at 1.1120, MACD and RSI are weak. Hence, we see a move to 1.1062, possibly 1.1019. Above 1.1120 to open 1.1167.


GBPUSD Chart (Two-week)


Strategy: Resistance at 1.2190 for 1.2046Short-term view:__ GBP/USD resistance at 1.2190, MACD and RSI lacks upside momentum and hence, we see a dip to 1.2046, likely 1.2000. Above 1.2190 to open 1.2243.


USDJPY Chart (Two-week)


Strategy: Resistance at 106.65 for 105.03
Short-term view: USD/JPY has resistance around 106.65 MACD and RSI are giving mixed signals, hence, we see a move lower to 105.81 and 105.03. Above 106.65 opens 107.05-107.48.


AUDUSD Chart (Two-week)


Strategy: Resistance at 0.6800 for 0.6725
Short-term view: AUD/USD short-term downtrend intact, 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.