LiteForex Market Analytics

Morning Market Review

2019-05-07 08:51 (GMT+2)

EUR/USD

EUR showed a moderate increase against USD on Monday, having developed a correctional impetus formed at the end of the previous trading week. Moderately optimistic macroeconomic statistics from Europe supported the instrument. Markit Services PMI in April rose from 52.5 to 52.8 points, although analysts did not expect any changes in the value of the indicator. Manufacturing PMI increased from 47.9 to 52.8 points. Retail sales also turned out better than expected. In March, sales showed zero dynamics on a monthly basis and strengthened by 1.9% in annual terms (with a forecast of –0.1% MoM and +1.8% YoY). On Tuesday, investors are waiting for the publication of statistics on factory orders in Germany for March. In addition, on May 8, the market will closely monitor the US-PRC trade negotiations, which are in jeopardy following the harsh statements by Donald Trump.

GBP/USD

The British pound fell against the US dollar on Monday, having corrected after active growth last Friday. On Monday, the UK markets were closed due to bank holidays, so investors focused on the failure of Theresa May's negotiations with the Labor Party, as well as on the aggravation of the situation in US-China trade relations. Last weekend, Donald Trump threatened to introduce additional import duties on Chinese goods, hoping in this way to speed up the process of concluding a final agreement. Experts believe that being under pressure, China may completely cancel the next stage of negotiations, which threatens a new round of deterioration in the global economy. On Tuesday, two representatives of the Bank of England, Jon Cunliffe and Andy Haldane, are expected to speak in the UK.

AUD/USD

The Australian dollar shows strong growth against the US currency during the Asian session on May 7, updating local highs of the beginning of the month. Macroeconomic statistics published in Australia provides moderate support for the instrument. The volume of retail sales in March increased by 0.3% MoM, which is 0.1% MoM higher than expectations. At the same time, the indicator showed a slowdown, since in February sales growth was +0.9% MoM. Exports and imports in March decreased by the same amount, –2.0% MoM, which led to a higher trade balance surplus than expected. In March, the trade balance surplus was 4.949B Australian dollars, with a forecast of 4.490B. The follow-up RBA statement also supported the Australian dollar. As expected, the regulator left the interest rate unchanged at 1.50%, noting the strong position of the labor market. While maintaining external risks, the RBA expects further economic growth in 2019 and 2020 by 2.75-3.00%.

USD/JPY

The US dollar continues trading ambiguously against the Japanese yen. After opening with the gap down on Monday, the US currency slightly corrected, but again tends to decline during the Asian session on May 7. The yen is supported by Japanese Nikkei Manufacturing PMI. In April, the figure rose from 49.5 to 50.2 points, returning to the February values. Investors today will focus on a block of macroeconomic statistics from the United States, as well as a speech by Fed representative, Randal Quarles. On Wednesday, the market is waiting for the publication of the Bank of Japan Monetary Policy Committee minutes.

Oil

Oil prices rose on Monday, despite the fact that during the day, they traded mainly with a decrease. The quotes were pressured by the disruption of the US-China trade negotiations after the harsh statements by Donald Trump. The market also reacts negatively to new signs of further increase in US oil production. Today, investors are awaiting publication of a report from API on oil reserves for the week as of April 26.
 
Morning Market Review

2019-05-08 08:52 (GMT+2)

EUR/USD

The European currency on Tuesday traded in both directions, closing with a slight decrease. Factory orders data published in Germany put pressure on the euro. In March, the index rose by 0.6% MoM against a decrease of 4.0% MoM last month, but analysts expected a more confident increase of 1.6% MoM. In annual terms, orders showed a negative trend at the level of –6.0% YoY against the expected –6.2% YoY. In February, the decline was –8.1% YoY. An economic report of the European Commission put additional pressure on the instrument. According to published data, GDP growth in the euro area in 2019 is expected to be 1.2% against the previous value of 1.3%. For 2020, the growth rate of the regional economy was also revised downward from 1.6% to 1.5%. In turn, the European Commission has noticeably improved its forecasts for the labor market, which can also have a positive effect on inflation expectations.

GBP/USD

The British pound showed an uncertain decline against the US dollar on Tuesday. The pound continues to correct paired with the US currency after an aggressive growth on May 3. The pressure on the British currency is exerted by the threat of disruption of the US-China trade negotiations, as well as the lack of visible progress in attempts to reach an agreement within the British parliament. The Minister for the Cabinet Office, David Lidington, confirmed that the UK will take part in the elections to the European Parliament, which will be held on May 23. According to the official, the Parliament of Great Britain simply will not have time to agree on a deal. During the Asian session on May 8, the pair is trading in both directions, and trading activity remains extremely low. Moderate support for the pound is provided by BRC data on retail sales in the UK. The indicator grew by 3.7% YoY in April after the decline by 1.1% YoY in the previous month. Analysts expected an increase of 2.4% YoY.

AUD/USD

The Australian dollar increases moderately against the US currency, developing corrective growth since the beginning of the week. The Australian dollar received some support from data on retail sales in Australia. The indicator grew by 0.3% MoM with the forecast for growth of 0.2% MoM In March. The market reaction to the decision of the RBA and the publication of the follow-up minutes was quite restrained. The regulator left the interest rate unchanged at 1.5%, while noting the growing risks of a slowdown in the global economy. However, the RBA noted some improvements in the labor market. During the Asian session on May 8, the pair is trading with a raise. More confident growth of the instrument is hampered by ambiguous macroeconomic statistics from China. Chinese exports unexpectedly went down by 2.7% YoY in April after growth by 14.2% YoY in the previous month. At the same time, imports showed an increase of 4.0% YoY, with a forecast of –3.6% YoY and a decrease of 7.6% YoY last month. The strong divergence of imports and exports led to a noticeable decrease in the trade surplus, which collapsed in April from USD 32.67 billion to USD 13.84 billion.

USD/JPY

The US dollar showed a steady decline against the Japanese yen in trading on Tuesday. "Bearish" activity can also be traced during today's Asian session, against the background of which the instrument updates local lows of March 26. The yen is supported by a sharply increased threat of disrupting the US-China trade negotiations after Donald Trump's statements. However, there is information that the Chinese delegation made a decision to arrive at the talks in Washington, which gives hope for a favorable outcome of the process. Today, the instrument maintains a downward direction. The yen responds to the publication of ambiguous statistics from Japan and China, but interest in the risk remains low, which gives the Japanese currency considerable support.

Oil

Oil prices again showed an aggressive decline on Tuesday, offsetting the results of the growth of quotations at the beginning of the week. The instrument is still under pressure from the potential disruption of the US-China trade negotiations, which could worsen the situation with the balance of supply and demand of oil in the market. More confident reduction of quotes is hampered by US sanctions against Iran and Venezuela. A report published by the American Petroleum Institute on Tuesday pointed to an increase in oil reserves for the week as of May 3 by 2.806 million barrels after rising by 6.810 million barrels over the previous reporting week. Today, investors are waiting for the statistics on crude oil stocks from the US EIA.
 
Morning Market Review

2019-05-13 09:00 (GMT+2)

EUR/USD

The European currency ended last week trading with moderate growth against the US dollar, updating local highs of 1 May. The euro was supported by data from Germany. Exports from the country in March increased by 1.5% MoM after falling by 1.2% MoM in February, with a forecast of a decline of 0.3% MoM. Imports for the same period increased by 0.4% MoM after declining by 1.6% MoM last month. Experts predicted growth by +0.5% MoM. Due to a sharp increase in exports, Germany’s trade balance in March rose from EUR 18.7 billion to EUR 20.0 billion, which turned out to be better than market expectations. More confident growth of the instrument is currently hampered by complications in the US-China trade negotiations. On Friday, the United States raised import duties on Chinese goods, as Donald Trump promised. China responded by raising duties on US goods for USD 110 billion total. At the same time, the parties intend to continue negotiations, the results of which are able to cancel the restrictions imposed.

GBP/USD

The British pound showed a slight decrease against the US dollar last Friday. In the first half of the day, the instrument was trading upwards, supported by strong UK publications. UK GDP showed growth in Q1 2019 by 0.5% QoQ and 1.8% YoY, which fully coincided with expectations. Over the past period, the UK economy showed growth of +0.2% QoQ and +1.4% YoY. The pound was also supported by industrial production data. In March, they showed an increase of 0.7% MoM and 1.3% YoY, which was significantly better than forecasts of +0.1% MoM and +0.5% YoY. During the Asian session on May 13, the instrument is trading upwards, waiting for new drivers to appear at the market. Interesting macroeconomic statistics is not expected to be published today, so the activity in the market will remain restrained.

AUD/USD

The Australian dollar shows flat trading paired with the US currency, consolidating near local lows of January 3, updated last Monday. A certain pressure on the position of the Australian dollar is exerted by the RBA comments on monetary policy published on Friday. Investors are somewhat disappointed with the extremely soft position of the regulator and fear the possible easing of interest rates if the economic situation in the country continues to deteriorate. In particular, the RBA lowered its GDP forecasts for 2020 from +3.00% YoY to +2.75% YoY. During the Asian session on May 13, the instrument is trading downwards. The development of "bearish" sentiment is facilitated by macroeconomic statistics from Australia. Home Loans issued in Australia in March decreased by 2.5% MoM after rising by 2.0% MoM last month. Analysts had expected a growth rate of + 2.3% MoM. The volume of investment loans for home construction in March also decreased by 2.7% MoM after rising by 0.9% MoM in February.

USD/JPY

The US dollar maintains a downward trend paired with the Japanese yen, but the "bearish" activity is gradually weakening. The situation around the US-China trade negotiations is not changing much, despite the fact that the US increased import duties on Chinese goods on Friday. The Bank of Japan, in turn, is still not satisfied with the growth rate of the Japanese economy and inflation. Last week, the head of the regulator, Haruhiko Kuroda, said that the Bank could go for an additional easing of monetary policy, if inflation continues to remain weak. Last Friday's macroeconomic statistics from Japan turned out to be ambiguous. At the end of March, Household Spending increased by 2.1% YoY after rising 1.7% YoY in February. In turn, the indicator of Average Cash Earnings for the same period dropped sharply by 1.9% YoY after falling by 0.8% YoY in February. Experts expected a decrease of only 0.5% YoY.

Oil

Oil prices show moderate growth, recovering after a decline at the beginning of the month. Tensions around the US-China trade negotiations, which escalated after Washington increased import duties on Chinese goods to 25%, continues to put pressure on the instrument. At the same time, both parties intend to continue trade negotiations. Donald Trump argues for the increase in import duties due to the violations from Beijing, so at the moment it is not entirely clear how the parties will be able to come to a consensus. Baker Hughes report on oil rigs number in the United States published last Friday showed a decrease in the number of drilling rigs from 807 to 805 units, which provided moderate support to prices.
 
Morning Market Review

2019-05-14 08:56 (GMT+2)

EUR/USD

The European currency finished Monday's trading with a decrease against the US dollar, despite the fact that during the day the euro updated the local highs of the beginning of the month. Pressure on the instrument is exacerbated by trade relations between the United States and China against the background of ineffective negotiations and the exchange of threats. Last Friday, Donald Trump raised import duties on a number of Chinese goods, accusing Beijing of disrupting negotiations. The Minister of Finance of China also announced introduction of higher tariffs on imports of goods from the United States in the amount of USD 60 billion starting from June 1. The possibility of exacerbation of trade relations between the US and the EU also adds to the negative sentiment at the market. Donald Trump has repeatedly advocated the introduction of import duties on European goods after the case of subsidizing the Boeing Company. On May 18, the United States may announce increased tariffs on the import of European cars, which will force the EU to respond with mirror measures.

GBP/USD

The British pound declined significantly at the beginning of the current trading week, updating local lows of April 30. The aggravation of the trade conflict between the US and the PRC, as well as the possible start of a trade war between the US and the EU, contributes to the development of the "bearish" dynamics of the instrument. During the Asian session on May 14, the instrument is trading ambiguously, waiting for new drivers to appear at the market. On Tuesday, investors are focused on the statistics on the UK labor market in March. It is expected that while maintaining the previous unemployment rate of 3.9%, the average earnings may slow down, which will put pressure on the pound.

AUD/USD

The Australian dollar fell significantly paired with the US currency on Monday, updating the local lows of the beginning of the year. The pressure on the Australian currency was put by exacerbated trade relations between the US and China, which threatens with a new round of slowdown in the global economy. Experts fear that the introduction of new import duties by the conflict parties will have a negative impact on the dynamics of Australian exports, which have recently been experiencing certain difficulties. During the Asian session on May 14, the Australian dollar is under moderate pressure from weak macroeconomic statistics from Australia. Thus, the NAB Business Survey in April collapsed from 7 to 3 points, which turned out to be worse than expected decline to 4 points. NAB Business Confidence index for the same period showed a moderate increase from –1 to 0 points, which, however, also turned out to be worse than market expectations of an increase to 1 point.

USD/JPY

The US dollar dropped significantly against the Japanese yen on Monday, updating local lows of February 1. The market still shows an increased demand for the Japanese currency against the background of the aggravation of the trade conflict between the United States and China, which are ready to mutually increase import duties. In turn, Japanese macroeconomic statistics released on Monday failed to provide any support to the yen. The Leading Index in March fell from 97.1 to 96.3 points, with the forecast of 96.4 points.

Oil

Oil prices rose moderately on Monday, supported by reports of a sabotage attack on ships near Fujairah. According to preliminary information, 4 vessels including two Saudi tankers were damaged, which could cause disruptions in oil supplies. Anyway, by the end of yesterday's trading session, the prices for the instrument had been noticeably corrected, and the focus of investor attention shifted to the development of the trade conflict between the United States and China. Today, investors are awaiting publication of a report from API on oil reserves for the week as of May 10.
 
Morning Market Review

2019-05-15 09:13 (GMT+2)

EUR/USD

EUR showed a decline against USD on Tuesday, continuing the development of a correctional impetus formed the day before. The euro is still under pressure from the prospect of an open trade conflict between the US and the EU after the introduction of US import duties on European cars planned for May 18. In addition, investors monitor the development of the US-China trade negotiations. Yesterday, the euro was supported by data from Germany. CPI in April increased by 1% MoM and 2% YoY, which coincided with the last month data and the forecast. Wholesale Price Index for the same period accelerated from +0.3% MoM to +0.6% MoM with the forecast of growth to +0.4% MoM. YoY, the growth of the index accelerated from +1.8% to +2.1%. In turn, published statistics on industrial production in the euro area failed to support the euro. Industrial production in March decreased by 0.3% MoM and 0.6% YoY after a decrease of 0.2% MoM and 0.3% YoY in February. Today, European investors focus on GDP statistics from Germany and the euro area for Q1 2019.

GBP/USD

GBP weakens against USD, updating local lows of April 26. The development of the "bearish" dynamics of the instrument is facilitated by the uncertain macroeconomic statistics from the UK, as well as the risks associated with the US-China trade negotiations, and the difficulty in forming a coalition within the British parliament. Statistics released in the UK on Tuesday showed a slowdown in Average Earnings + Bonus in March from +3.5% 3MoY to +3.2% 3MoY, while the forecast was +3.4% 3MoY. Claimant Count Change in April rose from 22.6K to 24.7K, with a forecast of 24.2K. At the same time, the overall unemployment rate unexpectedly dropped from 3.9% to 3.8%.

AUD/USD

The Australian dollar remains under pressure and is developing a downward trend against the US currency, updating local lows of the beginning of the year. The weakening of the instrument is facilitated by the tense situation around the US-China trade negotiations, which has noticeably deteriorated after the parties entered import duties against each other. The export-oriented Australian economy is very sensitive to changes in the dynamics of China's imports, so the risks for the Australian dollar also increased. During the Asian session on May 15, the pair is under pressure from the published macroeconomic statistics of Australia and China. Westpac Consumer Sentiment in May slowed from +1.9% MoM to +0.6% MoM. Wage Price Index in Q1 2019 remained at the previous level of +0.5% QoQ, contrary to forecasts of growth to +0.6% QoQ. China reported a sharp slowdown in industrial production in April from +8.5 YoY to +5.4% YoY, while the forecast was +6.5% YoY.

USD/JPY

The US dollar showed moderate growth against the Japanese yen on Tuesday, interrupting the five-day "bearish" rally and departing from local lows of early February. The emergence of an upward trend in the instrument is due to the development of corrective sentiment on the dollar in the market. At the same time, the demand for yen remains quite high, since the former risks associated with the aggravation of trade relations between the United States and China are still in force. Tuesday's macroeconomic statistics from Japan turned out to be ambiguous. Eco Watchers Survey Outlook in April fell from 48.6 to 48.4 points, with a forecast of growth to 49.4 points.

Oil

Oil prices continue to grow moderately, despite the aggravation of the situation in the Middle East. The day before, Saudi Arabia reported on the armed drone attack on oil production facilities owned by the state oil company Aramco. Previously, oil tankers off the coast of the UAE were also attacked, which heightened concerns about possible supply disruptions. However, Saudi Arabia claims that production and export volumes remain at the same levels. Additional pressure on prices on Tuesday was put by the API Weekly Crude Oil Stock report. For the week as of May 10, US Crude Oil Stock increased sharply by 8.600M barrels after an increase of 2.806M barrels in the previous period.
 
Morning Market Review

2019-05-16 08:53 (GMT+2)

EUR/USD

The European currency showed ambiguous trading against the US dollar on Wednesday. The euro was under pressure from weak macroeconomic statistics from China, as well as ambiguous data from Europe. Industrial production in China in April slowed from +8.5% YoY to +5.4% YoY, which turned out to be worse than market expectations of +6.5% YoY. Retail sales for the same period increased by 7.2% YoY after rising by 8.7% YoY last month. Data from the euro area indicated GDP growth in Q1 2019 by 0.4% QoQ and 1.2% YoY, which coincided with expectations. Employment index for the same period remained unchanged. With the opening of the US session, the euro was supported by news that Donald Trump might postpone the decision to raise import duties on European cars.

GBP/USD

GBP declined significantly against USD on Wednesday, updating local lows of February 15. There was no interesting macroeconomic statistics in the UK yesterday, so investors focused on the prospects for the development of a trade conflict between the US and China, as well as on the situation around Brexit. Teresa May has not yet managed to reach a compromise with the Labor Party, so there is no hope for an early approval of the agreement on leaving the EU. However, it became known that the British Prime Minister is preparing to submit the existing version of the agreement to a vote in Parliament around the beginning of June.

AUD/USD

The Australian dollar is developing a downtrend against the US currency, updating local lows of the beginning of the year. The day before, instrument was pressured by the weak macroeconomic statistics from China, which once again reminded of the difficulties in the Chinese economy. During the Asian session on May 16, the instrument shows ambiguous dynamic in response to the publication of the April report on the Australian labor market on Thursday. Employment in April rose from 27.7K to 28.4K, which turned out to be noticeably better than market expectations of 14.0K. Unemployment Rate grew from 5.1% to 5.2%. The Employment rate rose due to a significant increase in private employment, while Full time employment in April showed a decline of 6.3K, after rising by 49.2K last month.

USD/JPY

The US dollar is trading in both directions against the Japanese yen, staying close to the local lows updated at the beginning of the week. The demand for yen is supported by the low interest in risk-taking, but overall trading activity remains low. Pressure on the Japanese currency yesterday was put by data on the Machine tool orders. According to preliminary estimates, in April, the figure fell by 33.4% after declining by 28.5% in March. During the Asian session, the yen is trading in both directions again. Investors are focused on a block of statistics from Japan. Stock investments by foreigners for the week as of May 10 reduced from 640.1B to 282.5B yen. Foreign bond investments increased from –257.0B to 20.8B yen.

Oil

Oil prices are rising moderately, recovering to local highs of the end of April. The quotes are supported by tensions in the Middle East after Saudi Arabia’s statements about the attacks on their oil production sites and tankers off the coast of the United Arab Emirates. A more confident increase in prices on Wednesday was hampered by the report of the US Department of Energy on oil reserves. For a week as of May 10, oil stocks in US warehouses increased by 5.431M barrels, after a decrease of 3.963M barrels over the past period. Analysts had expected negative dynamics to remain at –0.800M barrels. At the same time, the report again reflected a decline in oil production from 12.200M to 12.100M barrels per day.
 
Brent Crude Oil: general review

2019-05-21 09:04 (GMT+2) Brent

Current trend

Brent crude oil is traded in an upward channel with a resistance level at 73.60 and support level at 70.30.

Significant demand for "black gold" is provided by the possibility of new attacks on oil facilities in Saudi Arabia. The second positive moment for the energy market is the decision of OPEC to adhere to a balanced market and not to increase current production. At the same time, representatives of the organization said they would focus on demand and monitor global reserves in order to be able to influence the situation in a timely manner. Under the current agreement, the countries of the oil cartel have agreed to reduce total production by 1.2M barrels per day. It is also worth noting that last week a report on drilling activity in the United States was published, showing that the number of active oil rigs fell from 805 to 802 units in a week. The slowdown of this indicator indicates a possible decrease in production growth in the United States: over the past two weeks, the rate of oil refining fell by 100K barrels per day. At the same time, in Canada the activity indicator remained at the same level: the number of drilling rigs was 22 units.

Support and resistance

Stochastic is at 35 points and does not provide any signals for the opening of transactions.
Resistance levels: 73.60, 74.50.
Support levels: 72.00, 71.20.

Trading tips

Open long positions after the breakout of 73.60 with take profit at 74.50 and stop loss at 73.25.
 
Bitcoin Cash: technical analysis

2019-05-23 10:00 (GMT+2) Bitcoin Cash

Current trend

BCH quotes failed to consolidate above 437.50 (Murrey [7/8]), although over the past two weeks they have made such attempts several times. Currently, the price stepped back to the level of 375.00 (Murrey [6/8]). The correction to the levels of 312.50 (Murrey [5/8]) and 250.00 (Murrey [4/8]) will be possible after the consolidation below the middle line of Bollinger bands around 350.00. The key “bullish” level is 437.50 (Murrey [7/8]). Fixing above it will give the prospect of growth to the upper border of the Murrey trading range around 500.00 (Murrey [8/8]) and to the level of 562.50 (Murrey [+1/8]).

Technical indicators do not give clear signals. Bollinger bands reversed upwards, confirming the preservation of the uptrend. Stochastic reverses downwards. The MACD histogram is decreasing in the positive zone and maintains a divergence with the price chart.

Support and resistance

Resistance levels: 437.50, 500.00, 562.50.
Support levels: 375.00, 312.50, 250.00.

Trading tips

Short positions can be opened from the level of 350.00 with the targets at 312.50, 250.00 and stop loss 385.00.
Long positions can be opened above the level of 437.50 with the targets at 500.00, 562.50 and stop loss 400.00.
Implementation period: 3–4 days.
 
EUR/USD: general review

2019-05-28 08:33 (GMT+2) EUR/USD

Current trend

At the end of last week, EUR strengthened against USD amid weak macroeconomic releases from the US. Negative data heightened investor concerns about the growing tensions between the US and China, which threaten the growth of the American economy.

At the same time, EUR is still holding back from falling, despite the fact that the European Commission may in the near future fine Italy by 0.2% of GDP (about EUR 3.5 billion) due to the exceeded level of public debt. At the same time, EUR received moderate support from the results of European Parliament elections, where pro-European parties retained a majority.

Today at 10:00 (GMT+2), statistics on Private Sector Loans in the euro area is expected to be published, and at 11:00 (GMT+2), the results of the Business and Consumer Survey in the euro area will be published. In the afternoon, statistics on House Price Index (15:00 GMT+2) and CB Consumer Confidence in the US (16:00 GMT+2) are scheduled to be released. The recent fall in the stock market may adversely affect the confidence of American consumers, which will help strengthen the pair.

Support and resistance

On the H4 chart, the instrument is trading below the center line of Bollinger Bands. The indicator is directed upwards and the price range is reduced, which indicates the change of the downtrend. MACD histogram is in the positive zone keeping a weak buy signal. Stochastic is leaving the oversold zone having formed a buy signal.

Resistance levels: 1.1201, 1.1223, 1.1247, 1.1264.
Support levels: 1.1180, 1.1160, 1.1143, 1.1127, 1.1111.

Trading tips

Long positions may be opened from the current level with target at 1.1225 and stop loss at 1.1165.
Short positions may be opened below 1.1165 with target at 1.1110 and stop loss at 1.1185.
Implementation time: 1-2 days.
 
EUR/USD: general review

2019-05-29 08:33 (GMT+2) EUR/USD

Current trend

EUR continues trading in a downtrend. Pressure on the euro is exerted by the news that the European Commission may begin the procedure for the imposition of disciplinary sanctions in Italy because of the exceeded level of public debt, which reached 132% of GDP. The Commission believes that the Italian government is not making enough effort to reduce this value. The fine may be about EUR 3.5 billion. If monetary penalties are really applied to Italy, this may increase discontent among the population and cause protest sentiments aimed at leaving the EU.

In turn, USD also remains under pressure due to the intensification of the trade war between the United States and China, which keeps the euro from a stronger fall. Against this background, one can hardly expect a change in monetary policy by the Fed, and this is a negative point for USD.

Today, data on French GDP will be published, and the speech of the head of the German Bundesbank, Jens Weidmann, is also expected. On Thursday, US GDP data will be published.

Support and resistance

Stochastic is at 38 points and does not provide any signals for the opening of transactions.
Resistance levels: 1.1179, 1.1214.
Support levels: 1.1141, 1.1100.

Trading tips

Short positions may be opened from the resistance level of 1.1214 with take profit at 1.1100 and stop loss at 1.1250.
 
2019-05-30 07:34 EUR/JPY

EUR/JPY: Ichimoku clouds

Let's look at the four-hour chart. Tenkan-sen line is below Kijun-sen, the red line is directed downwards, while the blue one remains horizontal. Confirmative line Chikou Span is below the price chart, current cloud is descending. The instrument is trading between Tenkan-sen and Kijun-sen lines. One of the previous minimums of Chikou Span line is expected to be a support level (121.76). The closest resistance level is the upper border of the cloud (122.69).

On the daily chart Tenkan-sen line is below Kijun-sen, the blue line is directed downwards, while the red one remains horizontal. Confirmative line Chikou Span is below the price chart, current cloud is descending. The instrument is trading below Tenkan-sen and Kijun-sen lines; the Bearish trend is still strong. One of the previous minimums of Chikou Span line is expected to be a support level (121.76). The closest resistance level is Tenkan-sen line (122.63).

Recommendation

On the four-hour chart we can see a correction of the downward movement. On the daily chart the Bearish trend is still strong. It is recommended to open short positions at current price with Take Profit at the level of previous minimum of Chikou Span line (121.76) and Stop Loss at the level of Kijun-sen line (122.63).

 
Cryptocurrency Market Review

2019-05-31 11:32 (GMT+2)

This week, cryptocurrencies showed ambiguous dynamics. The initial price increase is now replaced by a significant correction. Now Bitcoin is trading around 8215.00 (–3.9%), Ethereum — at 250.00 (–4.7%), Ripple — at the level of 0.4160 (+3.2%), Bitcoin Cash — at around 415.00 (–1.4%). EOS took the fifth place in terms of capitalization, displacing Litecoin from this position. Currently, EOS is trading at 7.360 (+5.7%). The total market capitalization during the week decreased from 270 to 261 billion dollars. Bitcoin's market share rose to 56.2%.

Despite the downward correction of the market in the second half of this week, most experts are confident that the uptrend will continue. The rise in the value of cryptocurrency assets will continue to be supported by the confrontation between China and the United States. Recently, it has moved from the tariff to the technological sphere, and if the bond market is also affected, this will entail a significant surge in demand for the largest cryptocurrencies. According to CNBC analysts, there is an inverse correlation between the yuan and Bitcoin on the market, with the latter acting as a safe haven. Also, the growth of Bitcoin is supported by the approximation of the date of a two-time reduction in the reward for miners (May 2020), which can provoke a sharp reduction in the supply of coins.

Cryptocurrency sites important releases include Coinbase preparation for the launch of margin trading. For now, it is discussed, in what form and how to provide this service to customers. Also, representatives of the exchange announced the addition of the ability to trade EOS coins to the Coinbase application on Android and iOS. Binance Cryptocurrency Exchange is preparing to release a new version of the Binance 2.0 platform, which will also contain the function of margin trading. Now this option is available in test mode. Also, the update will enhance the security of transactions in order to further eliminate the possibility of hacker attacks, such as the one that occurred in early May and cost the company's customers BTC 7000.

From other news, it is worth noting the publication of a new cryptocurrency rating from the China Center for Information Industry Development (CCID). It assesses coins in terms of technology base application, innovation and practical benefits. The first three places are occupied by EOS, TRON and Ethereum. Bitcoin takes only 12th place, and Ripple is at the 17th. The US Congressional Research Service published a report this week, in which it called Bitcoin not a payment, but a speculative tool. According to the research, cryptocurrency ultimately will not be able to compete with traditional means for storing capital and paying for goods and services. The ECB Research Group on the Study of Cryptocurrency Assets also released a report according to which cryptocurrencies currently do not pose a threat to the EU financial system, since their capitalization is only about 1% of euro area GDP. However, the group members called for a unified regulation of cryptocurrencies in the EU.

Next week, the beginning of a new growth in the cryptocurrency market is possible after the end of the current correction.
 
Morning Market Review
2019-06-03 08:52 (GMT+2)

EUR/USD

EUR is actively recovering against USD after updating local lows on May 30. Technical factors contribute to the development of "bullish" dynamics, while the fundamental background for the euro remains very ambiguous. Investors fear the development of a political crisis in Italy, as well as watching the development of trade relations between the EU and the US, which have worsened after the harsh statements by Donald Trump. Published on Friday, macroeconomic indicators from Europe failed to provide significant support to the euro. Retail Sales in Germany in April decreased by 2.0% MoM, but unexpectedly increased strongly in annual terms (+4.0% YoY). German CPI in May slowed from +1.0% MoM to +0.2% MoM, which turned out to be worse than the average market expectations. Meanwhile, HCPI slowed down from +2.1% YoY to 1.3% YoY over the same period.

GBP/USD

GBP is trading higher against USD at the beginning of the new week, developing a correctional impulse formed at the end of the last trading week. On Friday, macroeconomic statistics on consumer lending published in the UK provided moderate support for the instrument. Net Lending to Individuals in April rose from 4.7B to 5.2B pounds, while the forecast predicted its decline to 4.6B. Mortgage Approvals in April rose from 62.56K to 66.26K, which also exceeded the market expectations (63.25K). Investors are focused on statistics on May PMI in the UK. The current forecast of analysts suggests a decrease in Markit Manufacturing PMI from 53.1 to 52.0 points.

AUD/USD

AUD is strengthening against USD during today's Asian session, updating local highs of May 13. Corrective sentiment on the US currency contributes to the development of upward dynamics on the instrument, while the macroeconomic background from Australia remains ambiguous. AiG Manufacturing index went down from 54.8 to 52.7 points in May. Company Gross Operating Profits in Q1 2019 grew by 1.7% QoQ only, which is almost twice as bad as market expectations. ANZ Job Advertisements in May showed a sharp decline of 8.4% MoM after rising by 0.2% MoM last month. On Tuesday, investors are waiting for the RBA decision on the interest rate, which is expected to be reduced from 1.50% to 1.25%. In the case of the implementation of forecasts, AUD may fall under pressure.

USD/JPY

USD fell sharply against JPY on May 31, updating local lows of mid-January. The reason for the emergence of negative dynamics in the instrument was the statements by US President Donald Trump's about his intention to sharply increase import duties on Mexican goods, if Mexico does not take measures aimed at restricting the flow of migrants. Investors fear that the implementation of Trump’s threats could have a significant impact on the US economy and exacerbate the threat of a recession, given the large trade turnover between the countries. Meanwhile, JPY is under pressure from a not too optimistic macroeconomic background from Japan. Friday statistics reflected a slowdown in growth in Retail Sales in April from +0.2% MoM to 0.0% MoM. YoY, the indicator slowed from +1.0% to +0.5%. May data released today on the Nikkei Manufacturing PMI in Japan showed an increase from 49.6 to 49.8 points, while analysts did not predict a change in this indicator.

Oil

Oil prices dropped markedly at the end of last week, updating local lows of mid-February. The reason for such a sharp decline of the instrument was the growing fears about global demand after statements by US President Donald Trump about the intention to increase import duties on all Mexican goods, if Mexico does not restrict the flow of illegal migrants. The opening of the new front in the US trade war serves as a source of uncertainty and threatens with the negative consequences for the world economy. Moreover, the American economy may also be significantly affected, since the trade turnover between the United States and Mexico is still very high. In addition to imports of agricultural products, the United States is actively importing oil from Mexico, so the current situation threatens with an additional decrease in demand.

 
Morning Market Review
2019-06-04 08:49 (GMT+2)

EUR/USD

EUR grew significantly against USD on Monday updating a new local high of May 13. Macroeconomic statistics on business activity in the US, which turned out to be worse than forecasts, contributed to the development of "bullish" dynamics on the instrument at the beginning of the week. ISM Manufacturing PMI in May declined from 52.8 to 52.1 points with the forecast of 53.0 points. Markit Manufacturing PMI in May declined from 52.6 to 50.5 points. In turn, ISM Manufacturing Prices in May rose from 50.0 to 53.2 points, which turned out to be better than the average market expectations of 52.0 points. European statistics on business activity was contradictory, but came close to forecasts, so it did not have a noticeable effect on the dynamics of the instrument. Euro area's Manufacturing PMI went down from 47.9 to 47.7 points in May.

GBP/USD

GBP continued to rise against USD during the Asian session on June 3, rising to local highs of May 28. The pound was under pressure from weak data on business activity from the UK at the beginning of the week. According to the data from Markit, Manufacturing PMI in May fell from 53.1 to 49.4 points, while investors expected a decline only to 52.0 points. Investors are focused on the state visit of US President Donald Trump to the UK in addition to a marked increase in trade tensions in the market. Trump intends to discuss issues regarding the Chinese company Huawei, against which the United States recently imposed sanctions. It is planned that the Chinese corporation will be involved in the construction of fifth-generation communication networks in the UK. In addition, on the agenda of the visit are questions about a free trade agreement between countries, which is planned to be concluded after Brexit, in order to level losses from the process.

AUD/USD

AUD rose against USD on Monday, noting local highs of May 13. The Australian currency was supported by quite positive data on China's business activity, which did not demonstrate the expected decline. The growth of the instrument was also supported by the uncertain statistics on business activity from the US, which heightened tensions around the possible onset of a recession in the US economy. During the Asian session, the pair shows ambiguous trading. AUD is under pressure from the RBA decision to lower the interest rate to 1.25%.

USD/JPY

USD continues to weaken against JPY against the background of a further decline in investor interest in risk. The focus of the market is on US trade conflicts that threaten with a slowdown in global economic growth. Earlier, Donald Trump put forward a new ultimatum to Mexico. The US will increase import duties on all Mexican goods from June 10, unless the Mexican government takes measures to reduce the flow of migrants across the southern borders of the United States. Monday's macroeconomic statistics from Japan provided little support to the yen. Nikkei Manufacturing PMI grew from 49.6 to 49.8 points which was better than expected (49.6 points). Capital Spending in Q1 2019 grew from 5.7% to 6.1% with the forecast of +11.6%.

Oil

Oil prices continue to show negative dynamics. The main downward factor for the instrument remains the decline in global demand for raw materials amid worsening trade conflicts. Donald Trump’s statements about the intention to introduce import duties on Mexican goods from June 10, which were likely to have a negative impact on Mexican oil imports, hit the quotes hard. The former threats of weakening demand against the background of the US-Chinese trade war still remain. Protracted negotiations between the parties have not yet led to consensus, and Washington has only aggravated the situation, imposing tough sanctions against the Chinese Huawei. In turn, quotes are supported by positive statements by Saudi Arabia that the OPEC+ deal will continue to be implemented by all members of the cartel.
 
Morning Market Review
2019-06-05 08:50 (GMT+2)
EUR/USD

EUR rose significantly against the US dollar on Tuesday, updating local highs of April 18. The growth of the euro is still promoted by the correction factors of the US dollar, which appeared after the new threats of Donald Trump to introduce import duties against Mexico. Analysts have again spoken about the risks to the US economy that these and similar restrictive measures bear. Also, USD is under pressure from the Fed policy, which may return to lower interest rates in the event of further deterioration in economic indicators. At the same time, the market is characterized by a rather low investor interest in risk. Published on Tuesday, macroeconomic statistics from the euro area prevented the emergence of a more confident uptrend in the instrument. CPI slowed down in May from +1.7% YoY to +1.2% YoY, which turned out to be worse than expectations. Core CPI for the same period corrected from +1.3% YoY to +0.8% YoY with the forecast of +0.9% YoY.

GBP/USD

GBP maintains an upward trend paired with USD, noting the new local highs of May 27. Published on Tuesday, the macroeconomic statistics from the UK was negative, but there was no significant pressure on the pound. The UK Construction PMI fell sharply in May from 50.5 to 48.6 points, while the forecast did not suggest any changes in the indicator. BRC Retail Sales Monitor in May also showed a decline of 3.0% YoY after rising by 3.7% YoY last month. Analysts expected an increase of +0.9% YoY. GBP is under additional pressure by the deadlock around Brexit. Teresa May did not manage to reach an agreement within the Parliament, which forced her to resign from the post of the Conservative Party leader. Perhaps the new Prime Minister will be able to find other ways for dialogue, but investors fear that the process may be delayed. Only the selection of a new party leader can take more than a month.

AUD/USD

AUD continues to grow moderately against AUD, updating the highs of 10 May. The growth of the instrument proceeds against the background of the publication of not the most confident macroeconomic statistics from Australia, as well as yesterday's decision of the RBA to lower the interest rate to 1.25% for the first time in 3 years. However, the decision of the regulator was quite predictable, and therefore the pressure on the Australian dollar was moderate. In the follow-up statement, the RBA noted that it is trying to maintain employment and inflation levels that remain below target levels. Moreover, RBA officials did not rule out further steps to ease monetary policy. Investors today are focused on the preliminary statistics on Australia's GDP for Q1 2019. On a quarterly basis, the economy accelerated from +0.2% QoQ to +0.4% QoQ, which was slightly below the forecast of +0.5% QoQ. YoY, the growth of the index slowed down from +2.3% to +1.8%.

USD/JPY

USD is consolidating against JPY after active decline at the end of the last trading week. The yen is supported by a low investor interest in risk, as well as corrective sentiment on the US currency. However, the activity on the instrument remains quite low. Nikkei Services PMI exerts some pressure on JPY on Wednesday. In May, according to preliminary estimates, the figure dropped from 51.8 to 51.7 points, with a forecast of growth to 51.9 points. On Thursday, markets are expecting the speech of the head of the Bank of Japan, Haruhiko Kuroda, who may reveal the regulator’s plans for monetary policy in the near future.

Oil

Oil prices are correcting after a steady decline at the end of the last trading week. The growth of quotations is largely technical in nature, while negative factors only intensify. In particular, it became known that Russia opposes further restrictions on oil production under the OPEC+ deal. The report of the American Petroleum Institute reflected the growth of oil reserves for the week as of May 31 by 3.545 million barrels after a decrease of 5.265 million barrels for the previous period. On Wednesday, investors expect to publish similar statistics from the US Department of Energy.
 
Morning Market Review
2019-06-06 08:42 (GMT+2)

EUR/USD

EUR showed ambiguous trading against USD on Wednesday. In the morning, EUR was trading higher and the instrument was able to update its local highs of April 17, but then traders began to actively get rid of long positions, which caused a significant pullback. The reason for the emergence of negative dynamics was the aggravation of relations between the Italian government and the EU leadership after representatives of the European Commission announced the validity of the claims. Italy faces a large fine for the excess of public debt, which last year amounted to more than 130%. Wednesday's macroeconomic statistics from euro area provided moderate support to the instrument. Markit Services PMI in May increased from 52.8 to 52.9 points with the forecast of the decline to 52.5 points. Markit Composite PMI for the same period strengthened from 51.5 to 51.8 points, which turned out to be better than market expectations of 51.6 points.

GBP/USD

Yesterday, GBP broke off its moderate growth against USD and showed a downward reversal. In the first half of the day, consumer sentiment on the pound was supported by good macroeconomic statistics from the euro area and the UK. Markit UK Services PMI in May increased from 50.4 to 51.0 points with the forecast of the increase to 50.6 points only. With the opening of the US trading session, correctional sentiments returned to the market, supported by strong PMI data from ISM. Non-Manufacturing PMI reflected an increase from 55.5 to 56.9 points, although analysts did not expect the indicator value to change. During today's Asian session, the pair shows flat trading, awaiting the appearance of new drivers in the market. On Thursday, investors are focused on the ECB interest rate meeting, as well as on the speech by the Bank of England Governor Mark Carney.

AUD/USD

AUD showed a decline against USD on Wednesday, departing from local highs of May 10 which were updated the day before. Certain pressure on the instrument was caused by ambiguous macroeconomic statistics released in Australia and China, but the main factor of the correction was the strengthening of the position of USD. During the Asian session on June 6, the pair is relatively stable and shows flat trading. Investors estimate Australian import and export statistics. In April, exports and imports increased by 3% after a decline of 2% last month. April Balance of Trade slightly decreased from AUD 4.887 billion to AUD 4.871 billion, which turned out to be somewhat worse than expectations.

USD/JPY

USD showed correctional growth against JPY on Wednesday, despite the publication of ambiguous macroeconomic statistics from the United States. In particular, investors paid attention to the extremely weak ADP Employment Change report. In May, the report reflected an increase in the private sector by only 27K new jobs after rising by 271K over the past month. The forecast assumed growth by 180K. Increased attention to the report is due to the upcoming publications on the US labor market on Friday.

Oil

Oil prices returned to decline on Wednesday, interrupting the development of the correction impulse formed the day before. Powerful pressure on the quotes on Wednesday was exerted by the US Department of Energy Crude Oil Inventory report, indicating a sharp increase in oil reserves in the country. For a week as of May 31, oil stocks in US warehouses increased by 6.771M barrels, after a decrease of 0.282M barrels over the past period. Analysts had expected negative dynamics to remain at –0.849M barrels. At the same time, the report also reflected an increase in oil production in the United States from 12.300M to 12.400M barrels per day.
 
Morning Market Review
2019-06-07 08:44 (GMT+2)
EUR/USD

EUR showed strong growth against USD on Thursday, recovering from a corrective decline of the previous day. The reason for the emergence of the uptrend was another weakening of USD against the background of the publication of not the most optimistic macroeconomic statistics from the United States and the growth of trade tensions between the countries. On Wednesday, the ADP Nonfarm Employment Change reflected a sharp slowdown in job growth from 275K to 27K, which turned out to be drastically worse than forecasts (180K). Thursday's data indicated a decline in Nonfarm Productivity in Q1 2019 from 3.6% to 3.4%, with a forecast of 3.5%. Unit Labor Costs for the same period declined by 1.6% after the decline of 0.9% in the previous period. European statistics was more predictable, which provided moderate support for the euro. Euro area's GDP for Q1 2019 showed an increase of 0.4% QoQ and 1.2% YoY, which fully coincided with the forecasts. The ECB kept the interest rate at 0%, noting that its growth is possible not earlier than the first half of 2020.

GBP/USD

GBP is trading flat against USD, remaining close to local highs, updated on Thursday. Despite the publication of weak statistics from the US, the pound was not able to consolidate in the uptrend, being under pressure from uncertain prospects around Brexit. On Thursday, investors were focused on the speech of the Bank of England governor Mark Carney, who is currently on a visit to Japan. The speech of the head of the regulator did not render any long-term support to the instrument, since it was largely devoted to the problems of investment funds. At the end of the week, investors expect the publication of Halifax UK House Price Index, as well as the release of an updated consumer inflation forecast. The May report on the US labor market will be more interesting.

AUD/USD

AUD showed a slight increase against USD on Thursday, weakening the downward corrective impulse formed the day before. During the Asian session, the instrument is again prone to decline, yet investors prefer to wait for the appearance of new drivers in the market. Friday's statistics from Australia was rather weak. AiG Construction Index went down from 42.6 to 40.4 points in May. Home Loans in April decreased by 1.2% after a decline of 2.5% in March. Analysts expected a decline of only 0.2%. Investment Lending for Homes in April showed a decrease of 2.2% after a decline of 2.7% in March.

USD/JPY

USD showed ambiguous dynamics against JPY, ending yesterday’s trading session with a slight decrease. Pressure on USD was exerted by weak macroeconomic data from the United States published on Thursday. In addition, investors are cautiously waiting for the release of the May report on the US labor market, because according to the previously published ADP report, the real state of the market may be significantly worse than expectations. In turn, the yen continues to receive moderate support from the risks of developing US trade conflicts with China and Mexico and a possible interest rate cut by the Fed in the foreseeable future. The process of negotiations between the US and Mexico has not yet brought visible success, but the market as a whole is quite optimistic and expects that on June 10, import duties on Mexican goods will not be introduced.

Oil

Oil prices rose significantly on Thursday, departing from local lows of January 29, updated the day before. The growth of the instrument was largely technical in nature, whereas the former negative factors are still very strong. In particular, the market fears further decline in global demand amid a slowing global economy. A previously published report from the US Department of Energy also put strong pressure on quotes, reflecting an increase in oil production rates and indicating a sharp increase in inventories. On Friday, investors are focused on the May report on the US labor market. In addition, investors are waiting for Baker Hughes US Oil Rig Count.
 
Morning Market Review
2019-06-10 08:53 (GMT+2)
EUR/USD

EUR rose significantly against USD on Friday, updating local highs of March 22. The reason for the emergence of a confident upward trend was the extremely weak report from the US labor market, which reinforced concerns about the Fed rate cut. In May, Nonfarm Payrolls grew by 75K new jobs, while analysts had expected growth of 185K jobs. In April, the indicator grew by 224K. Average Weekly Hours in May remained at the same level of 34.4 hours, with the forecast for the indicator to rise to 34.5. Average Hourly Earnings in May increased by 0.2% MoM and 3.1% YoY, which again turned out to be worse than market expectations (+0.3% MoM and +3.2% YoY). During the Asian session on June 10, the pair is trading downwards, negatively reacting to ambiguous statistics from China.

GBP/USD

GBP showed growth against USD on Friday, recovering from the uncertain dynamics of the second half of last week. The strengthening of the British currency was caused by weak data on the US labor market, while the macroeconomic background of the UK remained neutral. At the same time, investors enthusiastically greeted statistics on Halifax House Price Index. In May, prices showed an increase of 0.5% MoM after rising by 1.2% MoM last month. Analysts expected a decline of 0.2% MoM. During the Asian session on June 10, the instrument is relatively stable. Investors are in no hurry to open new trading positions, preferring to wait for new drivers to appear at the market. Today, investors focus on a block of macroeconomic statistics from the UK. Such indicators as Industrial Production, Trade Balance and GDP data for May are expected to be released. Closer to the end of the afternoon session, the speech of the representative of the Bank of England Michael Saunders is expected.

AUD/USD

AUD rose moderately against USD on Friday, noting local highs of May 8. The growth of the instrument proceeded against the background of the publication of weak data on the US labor market; however, the Australian data were also quite disappointing. AiG Construction Index of Australia in May fell from 42.6 to 40.4 points, which was worse than the average market forecasts. Home Loans in April decreased by 1.2% after a decline of 2.5% in March. Analysts expected a decline of only 0.2%. During the Asian session on June 10, the instrument is trading downwards. Australian markets are closed today due to the Queen's Birthday, so investors are focused on news from the United States. Additional pressure on AUD was exerted by contradictory statistics on imports and exports from China.

USD/JPY

USD showed a decline against JPY at the end of last week, returning to the same local lows, updated on June 5. Friday's macroeconomic statistics from the US put significant pressure on the US currency and again increased the risks of easing monetary policy by the Fed. At the same time, USD receives moderate support from optimistic signals around the US-Mexico trade negotiations. It is possible that Donald Trump will postpone the imposition of import duties on Mexican goods, which should come into force today, June 10. During today's Asian session, the dollar is trading higher, with investors almost completely ignoring strong statistics from Japan. Japan's GDP in Q1 2019 showed an increase of 0.6% QoQ and 2.2% YoY, with the forecast of +0.5% QoQ and +2.1% YoY.

Oil

Oil prices recovered significantly at the end of last week, departing from local lows of January 29, updated on June 5. The quotes are supported by positive comments by the Minister of Energy of Saudi Arabia, Khalid Al-Falih, who said that Riyadh does not plan to increase production to compensate for current oil prices, which, in his opinion, remain low and do not imply an increase in investment in the industry. Instead, Saudi Arabia is in favor of extending the OPEC agreement, which ends at the end of this month. At the end of last week, quotes were also supported by Baker Hughes report on active oil rigs in the USA, the number of which for the reporting week dropped sharply from 800 to 789 units.
 
Morning Market Review
2019-06-11 08:42 (GMT+2)
EUR/USD

EUR showed a slight decrease against USD on Monday, correcting after a strong growth of the instrument at the end of last week, when the euro updated local highs of March 22. The development of the "bearish" dynamics was due to the strengthening of USD in response to progress in the US-Mexico trade negotiations. Under the influence of a rather tough ultimatum on the part of Donald Trump, Mexico announced a number of measures against illegal migration, which ultimately made it possible to avoid an increase in import duties. Analysts are optimistic about this news, because they extrapolate this experience with Mexico to a situation with China, where a compromise has not yet been reached. Earlier, Donald Trump noted that he plans to discuss trade relations with Xi Jinping at the sites of the G20 Summit, which will be held on June 28 in Osaka.

GBP/USD

GBP showed active decline against USD on Monday, almost completely offsetting the strong growth of the end of last week. Significant pressure on GBP was put by weak macroeconomic statistics from the UK. Industrial production in April decreased sharply by 2.7% MoM and 1.0% YoY after the increase by 0.7% MoM and 1.3% YoY. Analysts counted on –0.7% MoM and +1.0% YoY. During the same period, Manufacturing Production decreased by 3.9% MoM and 0.8% YoY, which also turned out to be significantly worse than forecasts (–1.1% MoM and +2.2% YoY). Index of Services in April showed an increase of 0.2% QoQ, slowing down from the previous +0.3% QoQ. GDP in April showed a sharp decline of 0.4% MoM after a decrease of 0.1% MoM in March. During the Asian session on June 11, the instrument shows flat trading, and investors are awaiting publication of data on the UK labor market.

AUD/USD

AUD dropped significantly against USD at the beginning of this week, departing from its local highs. Australian markets were closed on Monday due to the national holiday, so the focus was on the optimistic news about the signing of an agreement between the US and Mexico, which allowed to avoid a new trade war. Some support for AUD on Monday is provided by news from China. Exports in May showed an increase of 1.1% YoY after a decrease of 2.7% YoY last month. Analysts counted on aggravating negative dynamics and reducing the index by 3.8% YoY. Imports, in contrast, fell sharply by 8.5% YoY after rising by 4.0% YoY in April. All this led to a sharp increase in the trade surplus, which reached USD 41.65 billion in May against the previous value of USD 13.84 billion.

USD/JPY

USD showed ambiguous dynamics against JPY on Monday, ending the day session with almost zero result. The dollar was supported by optimistic news about the signing of an agreement between the USA and Mexico, which made it possible to avoid imposing import duties on Mexican goods from June 10. Investors also hoped that the US would be able to make some progress in trade negotiations with China. In turn, the yen received strong support from macroeconomic publications from Japan. Japan's GDP in Q1 2019 showed an increase of 0.6% QoQ after a growth of 0.5% QoQ over the previous period. In annual terms, the growth of the Japanese economy in Q1 2019 reached +2.2% YoY after rising by 2.1% YoY in the previous period.

Oil

Oil prices returned to decline on Monday, retreating from the new local highs of the beginning of the month. Pressure on the instrument is exerted by Russia's uncertain position on the issue of extending the current OPEC+ deal, which ends at the end of the month. A negative factor is still the low demand for petroleum products against the backdrop of a slowdown in the global economy. Trade tensions between the US and China have not gone away, and after the G20 Summit at the end of the month, a new round of increase in duties is quite possible if the parties do not reach any agreement. Today, investors are focused on API Weekly Crude Oil Stock. The previous report reflected increase in volumes of 3.545M barrels.
 
Morning Market Review
2019-06-12 08:56 (GMT+2)
EUR/USD

EUR showed growth against USD again on Tuesday, returning to an uptrend after some decline at the beginning of the week. EUR remains heavily overbought in the nearest time intervals, as it shows an active growth since May 31, but this does not particularly disturb investors. The macroeconomic statistics from the US published yesterday was contradictory. Investors welcomed the growth of NFIB Small Business Optimism index in May from 103.5 to 105.0 points. At the same time, IBD/TIPP Economic Optimism index for June dropped sharply from 58.6 to 53.2 points, while analysts predicted its growth to 59.2 points. The May Producer Price Index in the USA also slowed down a bit. PPI in May showed an increase of 0.1% MoM after rising by 0.2% MoM in April. In annual terms, the indicator decreased from +2.2% YoY to +1.8% YoY, which turned out to be worse than the forecast of +2.0% YoY. It is also worth noting that European statistics on Tuesday turned out worse than market forecasts. Sentix Investor Confidence in June decreased from 5.3 to –3.3 points, while the forecast predicted a decline only to 2.3 points.

GBP/USD

GBP rebounded against USD on Tuesday, offsetting a decline of the previous day. The instrument was supported by moderately strong data on the labor market in the UK, as well as a general negative attitude towards the US currency. Average Earnings ex. Bonus showed an increase in April by 3.4% 3MoY, which turned out to be better than last month data (+3.3% 3MoY) and forecasts (+3.1% 3MoY). Average Earnings Index + Bonus for the same period slowed down from +3.3% 3MoY to +3.1% 3MoY, but turned out to be better than expectations of +2.9% 3MoY. The Unemployment Rate remained at the same level of 3.8%.

AUD/USD

AUD showed a slight decline against USD on Tuesday, retaining the "bearish" impulse formed at the beginning of the week. Yesterday, the instrument was moderately supported by the data from Australia, as well as rising pessimism about the prospects for the American economy. During the Asian session on June 12, the pair is trading downwards. Investors take a lead from ambiguous macroeconomic statistics from Australia and so far ignore the optimism of Chinese data. Westpac Consumer Sentiment in June showed a decline of 0.6% MoM after rising by 0.6% MoM over the previous period. Chinese statistics showed a rapid rise in the Consumer Price Index in May from 2.5% YoY to 2.7% YoY, which coincided with forecasts. The soft position of the RBA remains a negative factor for the instrument. Last week, the Australian regulator lowered the interest rate by 0.25% to 1.25%, noting the negative impact of external factors. By the end of the year, the RBA plans to reduce the rate to 1%.

USD/JPY

USD shows ambiguous trading in pair with the Japanese yen, remaining close to the local lows, updated on June 5. The yen is still under pressure from uncertain news background and the threat of a possible easing of monetary policy by the Bank of Japan. In addition, investors are currently not very interested in safe assets, although the situation remains rather unstable. During today's Asian session, statistics from Japan provide moderate support to the yen. Thus, the Japanese Core Machinery Orders in April increased by 5.2% MoM and 2.5% YoY, which was significantly better than the forecast of –0.8% MoM and –5.3% YoY. In turn, Producer Price Index in May showed a decline of 0.1% MoM after rising by 0.3% MoM in April. YoY, the indicator slowed from +1.2% to +0.7%.

Oil

Oil prices showed a slight decrease on Tuesday, continuing the development of a negative trend, re-formed at the beginning of the current trading week. Investors are focused on a program to reduce oil supply to the market under the OPEC+ deal. The main participants of the cartel have already agreed to extend the agreement after its termination in late June. Russia also announced the possible support of such a decision, which improved the prospects for maintaining a balance of supply and demand in the market. Yesterday's API report on Weekly Crude Oil Stock showed the growth rate for the week as of June 7 from 3.545 million to 4.850 million barrels. On Wednesday, investors expect the publication of similar statistics from the US Department of Energy.