Daily Market Report: EURUSD, GBPUSD, USDJPY, USDCAD, AUDUSD
ECB announcement today set to keep rates on hold, likely to point to future monetary easing as data across the continent disappoints.
EURUSD: Attention turns towards the ECB and monetary easing expectations
The US dollar didn’t outperform yesterday, and yet the euro still lagged with eurozone manufacturing at its worse in years, and Germany’s manufacturing PMI contracting at a worse than expected rate of 43.1, a level unseen since 2009. And out of the US, its manufacturing PMI was below expectations as well though avoided contraction, and with housing data continuing to disappoint. And while there’s some focus today with US durables and tomorrow’s preliminary Q2 GDP figure, the real focus is going to be on the ECB’s monetary policy announcement whereby expectations are for its interest rate to remain on hold, potentially discussing easing down the line. Technicals hold less relevance on such a crucial fundamental day, with plenty of portfolio repositioning prior to the event taking the euro lower anticipating further declines.
GBPUSD: Pound outperforms for a change, yet challenges remain
It’s official. With PM Johnson reshuffling the cabinet, attention will soon turn to Brexit, and whether a deal can be reached with Brussels. Else, a no-deal Brexit could become a reality. In the meantime, while the pound outperformed against the remaining FX majors, the technical overview remains bearish albeit stalling at the lows and with a non-trending ADX and most of its indicators neutral. In terms of sentiment, retail and institutional traders are holding near opposite bias, the former at a heavy long 77% while the latter continues to position for ongoing losses in the pound at a heavy short 76%.
USDJPY: Technicals remain conflicting as little change between USD and JPY’s performance
The lack of difference in the two currencies’ performance has resulted in ongoing consolidatory moves in this pair’s price, whereby it remains below its main long-term moving averages but still above its short-term moving averages. The rest of the indicators are still neutral, and the next main catalyst for a move will likely be tomorrow’s US preliminary GDP figures. Both retail and institutional bias is at majority long levels that are far from the extremes in the absence of a significant price move or catalyst.
USDCAD: CAD and USD both lag, limited movement between each other
With both the greenback and loonie slightly underperforming yesterday, there was little change in this pair’s price that although has bounced off the lows, hasn’t done enough to shift its stalling bear trend technical overview just yet. While the pair’s bear trend line is intact, ongoing retracement and conflicting technical indicators mean there’s little left to force a technical overview shift, and in the process aid contrarian strategies over conformist ones. Any upside movement however, would hurt both retail and institutional traders who are holding majority short bias that isn’t too far off from each other.
AUDUSD: A fourth consecutive day of decline, falling this morning on RBA Lowe’s comments
What little hope of positive technical bias has been eroded over the last four trading days that have broken its short-term bull trend line. Furthermore, RBA Lowe’s comments earlier this morning reaffirming the inflation target and the central bank’s commitment to long-term low interest rates have taken the commodity currency even lower as of this morning. As it stands, the pair’s price isn’t that far off from its 50-day moving average, with any cross below it causing the price to be below all its long-term moving averages and in conjunction with the weekly negative technical bias. Retracement back down would aid institutional traders holding heavy short bias of 73%, but to the detriment of retail traders holding a majority long 59% bias.
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