Trader Talk

USDX: 89.85

The greenback dropped to below 90.00 level, trimmed almost all of the previous big gain from last week, as the index took a blow after the US newspaper announced Trump fired Secretary of State Rex Tillerson. In addition, Both CPI data came and were in line with the expectations, hence unable to spark any bullish reaction to the buck. Another major event data will be released tomorrow regarding retail sales report.

USD JPY: 106.50

The trimmed half of its early gains and settled around 106.50, following the Trump decision to fire another of his advisors, and the soft tone of US equities. The escalating tensions surrounding the scandal of the sale of state-land that involves PM Abe and PM Aso, triggered selling pressure to the Japanese Yen at the beginning of the day. Settling below 106.00 level will continue its long term bearish outlook.

EUR USD: 1.2305

The pair managed to reach above the 1.2400 level again after the dollar suffered due to policy overshadowing data, as news regarding Trump fired the secretary of State and replaced him with the CIA director, Mike Pompeo. The move mainly due to it’s the EUR’s counterpart, however investors wait for Draghi’s talk which could be another driving factor for the pair’s momentum.

GBP USD: 1.3855

GBPUSD started the trading day with upward movement, reaching towards 1.4000 level, as broad dollar weakness against most of the majors. Further fuelled by a speech from UK chancellor of the Exchequer Philip Hammond, regarding the UK’s updated growth forecast which is more than the previous and the lower than expected of the Brexit divorce bill. No major UK events scheduled for the rest of the week.

AUD USD: 0.7885

Risk currency such as the Aussie, unable to hold to gains and turned negative during the US session despite of broad weakening dollar as weighed by soft tone in equities. Multiple moderate events ahead coming from Australia, with RBA Assistant Gov. Kent speaking. Although the upcoming Chinese data regarding the Industrial production will more likely to shake the AUD. Strong resistance level around the 0.7890 area.

NZD USD: 0.7300

The pair trading at two weeks high following the dollar being hit by a selling wave on the back of the US Inflation data which mainly were in line with expectations and news regarding Trump ousting the secretary of state. The dollar remains to be in the driver seat. Pushing above 0.7530 will continue the short-term rally phase.

USD CAD: 1.2840

Although the USD is down against most major currencies due to CPI data came in line and dismissal of US Secretary, the pair is on buy-off sentiment due to dovish comments made by BOC Governor Poloz regarding the Canadian economy can sustain further growth without generating inflation. The rally is further supported by falling cruide oil prices. The loonie lost more than 100 pips against USD and reaching towards to the previous high, where the key resistance level lies at 1.3000.

VIX: 16.35

The fear index went upback to above 16.00 level as softer tone came to the equities with risk aversion starting to show up once more. The US equities previous rally was rejected and turning into bearish phase, however not confirmed yet that it would last in the near future.

GOLD: $1,322

Gold price dropped to an intraday low level of $1313, however quickly caught some strong bids and surged to above $1320 level as fresh wave of US dollar emerged following the recent CPI data, and demand for Gold is inclining due to fear of inflation. The bullish momentum however seems to have run out of steam and weighed down by fading safe-haven demand,

OIL (WTI): $60.75

Oil price declined for the second day despite of broad weakening greenback, reversed the earlier gains following American shale oil output surges and the U.S. stock market pulled back. The sentiment from the trade wars still seemingly to be affecting the Oil price in the fear of the developments among the trading countries. Strong support level around $60.00, where breaking that level would extend the bearish phase.

BITCOIN (BTC): $9,120

The crypto struggling to reach back to above key psychological level at $10,000 since the double top pattern formation has been formed and the neckline breakout was seen. Momentum is firmly to see the downside as it still looks vulnerable. Resistance level within the $9,500 level and breaking above $10,000 is needed to cancel the bearish phase.

Macro Themes in Play

• BOJ Monetary Policy and its Stealth tapering operation is still in play

• Aggressive price reaction around the weakening U.S. greenback after the CPI sell-off