Trader Talk

USDX: 89.75

The dollar started the week and the new quarter of the year, trading between the range of 89.00 to 90.00 level which is virtually unchanged on Monday as the market participants return to their activity after long Easter weekend. Still hold the last week gains firmly during the holiday session, however it lacks directional movement at this moment. The ISM Manufacturing PMI came below expectation at 59.3 versus 60.1, while ISM prices increased to 78.1 from 74.2, which indicating that underlying inflation is building gup in the US economy. Series of data going to be released with the main event of this week will likely be the Non-Farm Payroll scheduled on Friday. The current mixed sentiment on the greenback seen in early Monday trading was mainly attribute to threat of trade wars as China said they would put on tariff on imported pork, fruits, and steel pipes from the US which is worth $3 billion, which possibly igniting back a new wave of risk-off sentiment.

USD JPY: 105.90

Yen started the trading week with moderate recovery as the three main US stock indices are in the red on Easter Monday amid trade fears and tech stocks are bringing down the whole US market down. As China earlier announced that it will impose trade tariffs on pork and fruits coming from the US. The growing risk as reignited by China’s respond, the Yen is strong on the day as investors are buying the currency for its safe-haven quality in times of stock market weakness and geopolitical tensions. The movement of the pair this week is dominantly driven by the geopolitical developments and stock-market action. No major economic events released from the JPY side while all eyes on the NFP data released later at the end of this week.

EUR USD: 1.2300

The pair started the day with positive tone advancing against the dollar however declined during the Wall Street’s opening, as the major US indices came under strong selling pressure, which weighted by sell off pressure on tech-related equities and fresh risk concerns about a trade war after China announced on Sunday tariffs of 25% on over a hundred US Agricultural products. The dollar advanced against European and commodity-related currencies but fell against safe-havens yen and gold, as sentiment continues being the main market motor. A quiet week for the EUR side in term of economic events. The current long-term trend is still persisting which is a sideway trend. Breaking below 1.2100 will turn the trend towards bearish outlook.

GBP USD: 1.4040

Quiet start of trading week for the pound, however with positive tone as the European forex session came to an end on Easter Monday. There were no news coming from the UK, resulting in the USD movement leading the way for the pair. Later this week, however, the UK will release Market PMIs on manufacturing, construction, and services on three consecutive days, where worse than expected results will send the currency lower than the current critical value at 1.40 level. The potential main catalyst for this week however is the US NFP data at the end of this week. Settling above 1.40 level for the rest of this week will signal strong positioning of Pound against the greenback.

AUD USD: 0.7660

Aussie started the week with bad news from the developments of trade wars between China and the US, as China announced imposing tariffs against the counterparty worth of $3 billion on products imported to China such as wine, nuts, pork, metal with two different groups (15% and 25% tariffs). AUDUSD looks to resume short term downtrend as it remains the weakest currency across the FX board right now as the commodity-linked currency struggles to attract buyer amid the concern of trade wars. Some major economic events this week such as the RBA monetary policy meeting, retail sales, and trade balance which potentially will be the drivers in the pair. The downward trend is still seemingly strong and persistent.

NZD USD: 0.7200

The Kiwi struggled for a firm direction and started trading week with declining against the USD as the US treasury bond yield held back investors to take a long position in the NZD, however the negative sentiment was negated by renewed concerns over a US-China trade war. However, the development of trade wars will potentially affect the commodity-linked currency such as the kiwi. No major relevant news coming from the NZD side, as the NFP data later on this week capture the spotlight. Breaking the 0.7150 level will continue the current bearish trend.

USD CAD: 1.2915

No virtually directional movement in the pair following the Easter holiday, yet with softer tone around the greenback and bid bias around the crude oil prices. As a commodity-linked currency which relies on oil prices, the loonie trading at 1.2910 as Bahrain found biggest oil field since 1932 which sent the crude oil prices to plunge more than 3% on Monday. The discovery of the oil field is seen s additional oil supply in the market which further supporting the USDCAD. The recent tariff announced by China affect the commodity-linked currency as well, as risk concerns rises. Upcoming major relevant data this week from the CAD side are the CAD trade balance and employment data, however all ayes fixed on the US NFP data.

VIX: 23.62

Huge increase in the fear index by almost 20% as strong sell-off on the US major indices following major selling in stocks related to technology and the developments in trade wars as China imposes tariffs on products imported to China such as metal, fruits, porks, etc, as awaiting the response from the Trump, which investors most likely predicted to be an ongoing matter. The volatility in the Indices causes a movement in the currencies as well as the commodity prices as well as investors turning to safe haven products amid the developments geopolitical risks. The US NFP data will be released later this week which will cause driver in the equity and forex markets.

GOLD: $1340.00

The demand for yellow metal increased after the US opening for its safe-haven quality with settling the day at $1,340.20 a troy ounce, with the momentum accelerating as Wall Street Falls. The drop in US equities can be attributed to selling in tech related equities after Facebook data-leak scandal, and also the tariff announced by China of 25%, reviving concerns about trade war. The gains trimmed half of the last week’s losses, and trade back above the 1,335.00 level. The ongoing concern on the geopolitical risk can send the Gold price even higher. NFP data is the most important data this week which will potentially cause a big move in the market.

OIL (WTI): $63.75

Oil price maintains positive tone on Monday, however later this week the price dropped heavily to $63.01 level, plunging more than 3% as Bahrain discovered an oil field which contained highly significant quantities of oil and gas which push down the price of the Oil, as Oil sell off begun as it seen as higher supply. Concerning about the trade wars between China and the US might affect the oil price as well as investors look closely. Technically, the oil is still continuing to drop lower for the short term, waiting for the crude oil inventories report on Thursday, which will be the next driver for the Oil price. Breaking below 62.65 will push down the oil price lower.

BITCOIN (BTC): $7,000

The crypto is still continuing the downward trend, however consolidating before a big move to either side. It is continuing to try to remain settled above $7,000 mark after a big sell-off last week, in a sigh that volatility is subsiding, and prices might stabilise around this level. As of early April, the cryptocurrencies exchanges in Australia have to conform to the Anti-Money Laundering and Counter Terrorism Financing Act 2006, which all crypto exchange platforms in the country will be required to seek registration with the ATRAC (Australia Transaction Reports and Analysis Center, which required to meet certain set obligations before registration. Looking at the long term, the price is on the strong downward trend, breaking above $9175.00 is required in order to switch the bear markets back to the game.

Macro Themes in Play

• Major sell-off in the US indices with technology related stocks are the major player.

• China imposes tariffs on around 130 agriculture products imported to China from the US.