Trader Talk

USDX: 89.00

Dollar crashed overnight following the comment made by US Treasury Secretary Steven Mnuchin regarding low Greenback would bring benefits to exports. US dollar index plummeted to 3 years low, breaking below 89.00 region.

The development of Trump’s trade actions is concerned by many investors as it might spark trade war with China which would hurt the US dollar even further.

The dollar sell-off bias remain persists with a strong momentum.

USD JPY: 109.25

The outlook remains bearish for USDJPY, however, the trend channel technically lingers within a confined range 107 – 108. As BOJ held its 2% inflation target, market starts to taper today at the end of NY session.

Testing of Fibonacci 23.6% level 109.13 is in play, the next support level is 107.30 which is the 2017 September’s low.

EUR USD: 1.2405

EURUSD Keep pushing up and breaking the 1.2400 level as increasing sell-off sentiment around the USD, which was driven up due to Mnuchin’s favour over weaker dollar. Further pushed up by an increment in German’s yield by 25bps.

All eyes on ECB now for Draghi’s comment on the conference regarding the appreciation of the exchange rate.

GBP USD: 1.4235

As high as last year’s May, sterling got a strong rally from UK unemployment data yesterday. (unemployment rate remains 4.3%) In addition to Brexit referendum, the soft landing for a Brexit deal smooths the market. One-hour chart RSI indicate an overbought territory, and SMA suggest a seemingly unavoidable bullish trend is in play for the Cable.

The pair could face a correction to a lower channel in Asian session, however, 1.4460/1.4500 region is expected to be the resurgent level as continuing bullish outlook for this pairing in the long term.

AUD USD: 0.8051

The Aussie got a boost from strong demand during the NY session, and we can see very little major events come in play this week fundamentally.

U.S. oil is above 65.85 and significant support by commodities, and AUDUSD enjoys upward momentum and above its 20 SMA technically.

NZD USD: 0.7335

CPI release of New Zealand revealed a strong support fundamentally. 1.9% for the last three-month encourages the Reserve Bank of New Zealand maintain its lowest cash rate.

Kiwi-dollar surges in the near term inspires pressure and might undermine the appreciation in NZDUSD.

USD CAD: 1.2320

USDCAD declines sharply overnight as USD sell-off intensifies following the comment made the US Treasury Secretary, reaching a lowest level since last September and breaking through the key support level at 1.2350.

The loonie was expected to push the gain even further to reflect a recent spike in Oil price, however the downward momentum is strong, as the Greenback remains under pressure. Awaits the upcoming US inventory data for fresh drive.

VIX: 11.43

US500 Index continues its rally as the confidence persists, pushing up the all-time high level at $2854.76, resulting a stable movement of the fear Index.

The gain in the US Index seemed to be overstretched, however not confirmation of reversal sign and the momentum upward is strong.

GOLD: $1,358

Huge spike in Gold overnight, breaching the last year high record as strong USD sell-off sentiment is continuing to preserve which is fuelled further by Mnuchin’s comment on the low dollar.

The break through above $1,344 created a strong buy-off wave, where is now the former resistance level reverts to initial support.

OIL (WTI): $65.95

Oil price boosts to above $65.00 in more than three years following the tenth straight weekly drop in US Oil Inventories. The report shows -1.1M reduction which put the total of the inventories at the lowest since February 2015.

The bullish momentum is robust, corrections might be expected in the short future however no sign of stopping the rally.

BITCOIN (BTC): $11,160

Bitcoin bounced back to above $11,000 after it recent plunge below the key level, however it still failed to break the $12,000 level. The price appears to be stabilised over few days after the previous wild downs and ups.

Need to be aware of the news regarding cryptocurrencies regulation as it would trigger volatility in most cases.

Macro Themes in Play

• USD totally capitulates amid Treasury Secretary comments

• Commodities are strong, helping lift Gold, Oil AUDUSD and make USDCAD collapse

• USD repriced lower across the board, seeing Fresh records in US Equities