Canadian dollar outperforms while the yen lags
Canadian dollar could see further gains if oil prices can rise higher, while any risk-on play via trade talks could send the yen plummeting.
EUR/USD: Finishing lower in a day of range-bound movement
The data didn’t impress yesterday, with German factory orders and Sentix’s investor confidence both showing another contraction. Up next is Germany’s industrial production which will be released shortly, and aside from other low-impacting Eurozone data, the focus will turn to tonight’s US Producer Price Index (PPI) figures and the US Federal Reserve (Fed) Chairman Powell’s speech regarding data dependence. In terms of price movement, Mondays are usually consolidatory, and it was no exception for this pair with the movement largely in line with its current technical overview (on both the daily and weekly) that’s showing ongoing negative technical bias but where most of its main technical indicators are neutral. Retail bias has dropped 5% since yesterday as the brief pop higher gave fresh longs a chance to close out and shorts to initiate at the (very) short-term support level.
GBP/USD: In the red for the day but not my much
In the absence of any Brexit updates as negotiations continue in the background, and the pair’s price movement has been relatively limiting, especially with a lack of economic data out of the UK and a couple speech from Bank of England (BoE) Monetary Policy Committee (MPC) members. Otherwise, from a technical standpoint – and it will hold less relevance once any significant news emerges – it remains consolidatory whereby most of its indicators are neutral, but with an Average Directional Index (ADX) showing an ongoing propensity to trend. Retail bias is unchanged at a heavy long 74% awaiting further gains to unwind long positions, while institutional bias is a near opposite extreme short 79% having initiated the bulk of those shorts at higher price levels.
USD/JPY: Yen underperforms as focus remains on trade talks
This pair could finally see some volatility, though that would be due to any outcome from US-China trade talks set to start on Thursday (but where deputy negotiators started hammering it out yesterday). The pair’s price is above its 50-day moving average, and higher as of this morning. As for data, Japanese household spending was slightly above expectations (but set to take a dent once it factors in the recent sales hike and hence could explain why consumers are spending more prior), while its current account was slightly larger than expected. Any further price gains for this pair would aid retail traders who are majority long at 61%, having dropped a notch on yesterday’s bias due to long profit-taking.
USD/CAD: Canadian dollar tops the performance charts
The Canadian dollar was the top performer yesterday but given overall FX movement wasn’t that significant especially with the greenback not that far off in terms of performance. The pair’s price remains close to its mid-term resistance level and showing ongoing positive bias even if its price briefly broke beneath its 200-day moving average. That positive bias however, is at risk of being undone should oil prices finally gain on rising geopolitical tensions. Retail bias is still heavy short but down a couple percent with some averaged-in shorts able to unwind on the retracement, but far more will be needed to push sentiment back towards the middle.
AUD/USD: Technical bias remains negative as price fails to cross its 50-day moving average
The pair’s price remains sandwiched between a mid-term support level that has managed to hold and a bear trend channel on the weekly that is holding, as well as a weak daily bear trend line that although got tested late last week, has managed to keep the outlook towards the downside. Another move back down, and it’ll test heavy long retail traders again, though this time the buy bias is dropping prior. Chinese data via Caixin’s services Purchasing Managers Index (PMI) figure disappointed, though any trade related news could give the proxy, commodity, and high-beta currency a leg to stand on.
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