Trader Talk

USDX: 89.75

Tough night for the dollar to hold gains, the market waits for the confirmation of three or four rate hikes in 2018 from FED chairman Jerome Powell. Therefore, a narrower price action capped around 89.50 weighs the substantial impact on our future progression. Whether it is a breakout from below signalling bullish overview or a rejection from above striking negative momentum, we shall find directional guidance from this level.

USD JPY: 106.90

One thing has been reiterated again and again by the Bank Of Japan officials is that the quantitative easing program would not be trimmed in the near future, albeit promising economic outlook in Japan in manufacturing as well as exporting. The direct contradiction stems from so-called “stealth tapering” with the purpose of reducing government bond purchase. An alternative fundamental perspective for USDJPY comes from the resurgence and regained confidence in U.S. equities, notwithstanding the higher volatility negates our historical velocity.

EUR USD: 1.2320

The sentiment is leading our most liquid currency pair once again, which means a prioritized technical analysis is the primacy of our trading in this week. EURUSD retraced 50% of its previous wild slump, surpassing out the pivotal level of 1.2300 in one hour. However, it is worth noting that it takes the whole New York afternoon to advance 15 pips above 1.2300, thus traders should place emphasis on Powell ‘s testimony and focus on the confirmation of a higher high above 1.2355.

GBP USD: 1.3970

Sterling-dollar inched down by roughly 0.10%, with the inability of the market to factor in a constant Brexit premium. Labour Party leader Corbyn seeks a seamless trading environment and bespoke conditions with Eurozone, which U.K. PM Theresa May had already rejected. 1.3930 is our immediate support to watch.

AUD USD: 0.7855

Our previous 61.8% Fibonacci resistance still holds at 0.7900, a tentative test at 0.7893 yesterday express the outlook to the bearish in the medium term. As usual, AUDUSD peaked at Asia session at 0.7890 and close below its 200-day SMA. A sharp gold price increase and downward trending U.S. dollar set the tone for yesterday’s Aussie, while we are looking at a more diverse sentiment today with a buying bias.

NZD USD: 0.7290

The pair jumped to 0.7345 in the London session before retracing back to just beneath 0.7300 level ahead of the major data released by NZ regarding the trade balance of -566m from the previous 596m surplus. However, the greenback continues to act as the driver’s role in determining overall market direction. Breaching above 0.7350 will promote a risk-off sentiment to the NZD.

USD CAD: 1.2680

The Canadian core CPI came positive and upbeat, the market reacted with a daily high of 1.2710 for the recent congregation of momentum. Notwithstanding the general outlook for the Canadian economy is soft, and it has been proven by being the worst performers amongst G-10 universe. Again, the increased production of U.S. shell oil reduced the outbound demand for Canada, and NAFTA jitters still loom the medium-long term prospect.

VIX: 16.49

The fear index continues to its downward path by settling below the previous close as the confidence in the US equities starting to build up again, however, the volatility is still seemingly moderate compared to previous lows before the big drop. Ahead, data regarding the core durable goods orders will be released by the US which will give indications of the manufacturing sector.

GOLD: $1,333

The yellow metal edged up to above $1340 level before drop back down and hovering around the $1330 level due to the renewed concern of US inflation and weaker dollar on Monday, however, the gain was immediately trimmed following the optimistic comments coming from the St. Louis president James Bullard about the economy. The immediate support is at $1320 level where breaking that level would give up any meaningful recovery.

OIL (WTI): $64.00

Oil price surged and break above the key level of $64.00 as some reports of outage in the Libyan production along with the reports of a slowdown in exports earlier on the weekend. The rally also backed up by a weakening USD and Saudi Arabia Energy Minister comments regarding production cuts from current OPEC and Non-OPEC following the rebalancing the oil price.

BITCOIN (BTC): $10,290

Bitcoin price has made back up to above the psychological $10,000 mark amid broad gains in the cryptocurrency market which is the trend is showing a turning point at this level in the long term, however, the trend line had proven to be tough to break. The spike following the announcement of cross-border currency exchange company circle acquiring Poloniex, a leading cryptocurrency trading platform.

Macro Themes in Play

• ECB president Mario Draghi testified with hawkish expectation stems from tomorrow’s FED chairman testimony

• 7% increment in bitcoin price leading a bullish sentiment to the majority of crypto assets