Markets remain jumpy despite some hopes for a US-Sino trade deal

The USD edged higher against its counterparts yesterday as market hopes for a possible US-Sino trade deal were maintained after Trump’s comments on Tuesday. US President Trump backed off from attacking the Fed Chairman Powell while at the same time, the US administration signaled its orientation toward a possible deal with China. Yet the uncertainty remains high keeping markets jumpy with any headlines reeling in being scrutinised by market participants and the fundamentals moving the markets, shifting easily. In the FX market, we continue to see the dominance of the USD as the main market moving force, with the US currency being the one which is, understandably, the most sensitive and its movement is defining for the FX market. As for financial releases, today we note the release of the durable goods orders growth rate for March, which is to provide a picture of the investments made in the US economy while at the same time, we also get weekly initial jobless claims figure. Overall we see the risks related to the course of the US economy as tilted to the downside, with the risk of a recession being quite present. Thus in the near term we continue to expect the bearish predisposition of the market for the USD persisting on a fundamental level.

Gold’s price continued dropping yesterday yet in today’s Asian session bounced on the 3300 (S1) support level. The bounce tends to enhance the possibility of a stabilisation of the precious metal’s price, hence we maintain yesterday’s sideways motion bias. For a renewal of the bullish outlook for gold’s price we would require the gold’s price to break the 3400 (R1) resistance line and continue to also break 3500 (R2) resistance barrier, reaching new record high levels. Should the bears take over we may see gold’s price breaking the 3300 (S1) support line and start aiming for the 3167 (S2) support level.

In the European theatre the common currency neglected the preliminary PMI figures for April, which indicated a slowdown of economic activity on the Euro Zone level and across sectors. The readings were particularly interesting for the services sector as they implied an unexpected contraction of economic activity for Germany’s services sector, while the contractionary mode continued to characterise the manufacturing sector. For EUR traders we note today, the release of Germany’s Ifo indicators which are to provide a glimpse at investor’s sentiment for the outlook of the largest economy in the Euro Zone but also for the current conditions on the ground for the German economy. On a monetary level, we note the comments of ECB President Lagarde yesterday, as she stated that she expects, Trump’s tariff wars to have a disinflationary effect on the economy of the Euro Zone which in our opinion could enhance the ECB’s intentions for more rate cuts.

EUR/USD continued to weaken yesterday yet in today’s Asian session seemed to be stabilising between the 1.1480 (R1) resistance line and the 1.1210 (S1) support level. The RSI indicator edged lower signalling an easing of the bullish sentiment, yet the indicator’s reading remained above the reading of 50, imply the continuance of a bullish predisposition of market participants for the pair. Should the bulls regain the initiative, we may see EUR/USD breaking the 1.1480 (R1) resistance line and start aiming for the 1.1690 (R2) resistance level. Should the bears take over, we may see the pair breaking the 1.1210 (S1) support level and start aiming for the 1.0730 (S2) support level.

その他の注目材料

Today we get UK’s CBI trends for industrial orders for April and business optimism for Q2, while from Canada we get the business barometer for April and from the US the existing home sales figure for March. As for speakers, we note that ECB Chief Economist Lane, Riksbank Deputy Governor Seim, BoE Deputy Governor Lombardelli and ECB Board Member Montagner are scheduled to make statements.