News is what making the risk sentiment fragile today...
Forex today: too much of geopolitics
A lot of geopolitical news was released during the weekend that was factored in the Forex market.
- Investors are waiting for China’s Boao Forum on Tuesday where China’s president Xi Jinping is anticipated to give clues on the trade wars issue. According to the PBOC adviser, China should invest less in the US Treasuries. So a chance of conflict’s escalation is high.
- The US dollar significantly plunged on Friday after the release of the Nonfarm Payrolls. Compared to the previous data and even the forecast, the NFP appeared to be too weak.
Today the greenback is standing still at 89.90. No important economic data is anticipated today. But let’s wait until Wednesday when CPI, Core CPI (15:30 MT time) and FOMC Meeting Minutes (21:00 MT time) will be out.
Although the USD is weak, it is managing to appreciate against some currencies.
- According to US officials, North Korea is ready to discuss denuclearization. There are no particular details of the process, only talks. However, talks are better than nothing. Relaxing news affected the USD/JPY pair. It has managed to climb to 107. Let’s see if the USD/JPY is able to break the resistance at 107.35.
- The Canadian dollar is depreciating because of the negative news from NAFTA. According to Reuters, no NAFTA deal will be announced at Lima summit of the Americas (13-144 April). There are too many unsolved issues that will not let the parties come to the agreement. The USD/CAD is trading around 1.2785. The resistance lies at 1.2818. The support is at 1.2693.
- The EUR/USD pair reached the resistance at 1.2280. Now the pair is standing still, however, bears are prevailing on the daily chart. Some nonsupportive comments on the euro’s rate appeared during the weekend. Barclays’ analysts see limited possibilities for the euro increase this year. Moreover, Barclays thinks that the single currency already trades around its fair value. There were some comments in the UK press as well. According to them, “the eurozone is already heading back into recession". Not good news for the euro when the central bank is planning to taper its quantitative easing...
- Oil is rising despite the news from Syria. The largest city in eastern Syria was attacked by airstrikes. The US denied it was their strikes. Some suspicions of France or Israel. However, oil did not react and both main benchmarks rose. Brent is trading near $67.40, WTI is slightly above $62.
- The main stock indexes appeared to be weak today. Investors should anticipate more pressure on Tuesday and Wednesday as the Head of Facebook Mark Zuckerberg will testify at two Congressional hearings.
- Bitcoin is gaining a foothold. On Friday the digital currency fell to $6,500, however, that level became the support for it and the main cryptocurrency rebounded. Now bitcoin is trading above $7,100. George Soros who called cryptocurrencies a bubble in January has changed his opinion. His $26 billion family office has recently approved trading digital assets. Was it a reason for bitcoin rise, what do you think?
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In July, Britain's inflation rate rallied for the first time in 2018, thus leaving many UK households feeling quite squeezed by prices, soaring at nearly the same tempo as their wages…
Welcome to Tuesday, people! Here’s your markets update ahead of the European trading session.