Asia EM FX under pressure as US -China talks shelved

Sept 24 (Reuters) – Asian currencies were weaker across the
board on Monday as investors faced the prospect of an escalation
in the Sino-U.S. trade conflict after China cancelled upcoming
talks even as the latest round of tariffs take effect.
China cancelled mid-level trade talks with the United
States, the Wall Street Journal reported. With no compromise in
sight, many expect the latest move will only raise the tension
between the world’s two largest economies.

U.S. tariffs on $200 billion worth of Chinese goods and
retaliatory tariffs by Beijing on $60 billion worth of U.S.
products took effect on Monday.
With Beijing’s stance appearing to have hardened, U.S.
President Donald Trump’s threat of tariffs on all remaining $267
billion of Chinese exports to the United States looks more like
becoming a reality.

Several regional central banks are expected to raise their
own rates to defend their respective currencies.
Indonesia’s rupiah weakened 0.3 percent to 14,865 per
dollar ahead of a Bank of Indonesia meeting set for Thursday.
Similarly, the Bangko Sentral ng Pilipinas (BSP) is also
meeting on Thursday to decide rates, with the peso
slipping 0.2 percent to 54.21, lingering around its weakest
level against the dollar since late 2005.
With the Fed rate hike priced in by many, Mizuho and OCBC
bank both predict BSP will raise rates by 50 basis points, while
Bank Indonesia is seen hiking its policy rate 25 basis points.
Stephen Innes, head of trading Asia for Oanda, cautioned the
hawkish plays, “without addressing the real underlying problems
around deficits, hiking interest rates to prop up currency is
like putting a band-aid on a broken leg. Speculators will
continue to target deficit currencies at every opportunity.

Reuters

Oil is is trading higher post Algeria OPEC meeting

Brent crude climbed above $80 a barrel after OPEC and its allies signalled less urgency to boost output despite U.S. pressure to temper prices.

Futures in London rose as much as 1.7 per cent. OPEC and its partners gave a tepid response to President Donald Trump’s demand that rapid action be taken to reduce prices, saying they would boost output only if customers wanted more cargoes. Brent could rise to $100 for the first time since 2014 as the market braces for the loss of Iranian supplies due to U.S. sanctions, according to Mercuria Energy Group Ltd. and Trafigura Group.

Oil has rallied since the lows of August as speculation swirls over whether OPEC and its allies will boost output as the sanctions on the Middle East nation’s exports nears. Still, a full-blown trade war between the U.S. and China could imperil global economic growth that underpins crude demand as the two countries begin a new round of tariffs on each other’s goods.

Oil investors are “trading the weekend news very favourably,” said Stephen Innes, Singapore-based head of Asia Pacific trading with Oanda Corp. “Saudi Arabia and Russia ruled out any expeditious supply increases at the Algeria meeting while decidedly ignoring U.S. President Trump’s call to increase supplies and ease price pressures.

Bloomberg

Dollar firmer amid trade talk trouble

Dollar rises as China cancels trade talks

The US dollar was marginally higher on a holiday-thinned Asia Monday morning, reacting to weekend news that China had cancelled plans to visit Washington this week for trade talks. Remember the next set of US tariffs on $200 billion of China goods has just kicked in at 12am Washington time with $110 billion worth of US goods being hit by China tariffs at the same time. There is speculation that nothing further will happen with trade negotiations before the US mid-term elections in November.

 

 

Of the equity market that were open (China, Japan, South Korea and Taiwan were all closed), Hong Kong stocks reacted negatively to developments, dropping 1.59% while Australia gained 0.2%. The SPX500USD CFD declined 0.22% to 2,921.1. On Friday it hit a record high. The Aussie currency reacted more, falling 0.46% versus the dollar to 0.7255 as the US dollar, measured against a basket of six currencies, rose 0.11%.

 

UK Sunday press awash with rumors

The UK’s Sunday Times reported that aides to PM May had started contingency planning for a snap November election in order to rally public support for an updated and improved Brexit plan. The pound suffered heavily on Friday, falling the most in one day since June 2017, after May was heavily criticized at the EU summit in Salzburg and said that talks were at an impasse. The rally from the August 15 low stalled near the 50% retracement level of the drop from April 17.

 

GBP/USD Daily Chart

Source: Oanda fxTrade

 

 

Oil prices advance as OPEC ignores Trump’s demands

US President Trump called on OPEC to reduce oil prices which provoked the response from the group that it would boost output only if customers asked for it. This pushed oil prices higher with West Texas Intermediate pushing further ahead from the $70 mark, rising as high as $72.40 per barrel, the highest in 2-1/2 months. Brent continues to straddle the key $80 per barrel level, currently at $80.306.

 

WTI Daily Chart

Source: Oanda fxTrade

 

Another improvement in German IFO surveys may help the Euro

It’s a slow start to this week’s busy data schedule with German IFO surveys and the UK’s CBI orders survey the only items to set the pulse racing in Europe. The IFO survey last month saw the expectations index bouncing higher and another improvement in sentiment in September could help EUR/USD stave off some of the dollar’s strength today. The current assessment index has been rising for the past two months and was at 106.4 last month. However, economists expect the business climate to deteriorate to 103.0 from 103.8, the latest poll shows.

The North American session features August’s Chicago Fed activity survey, the Dallas Fed business index for September and Canada’s wholesale sales for July.

 

The full MarketPulse data calendar can be viewed here: https://www.marketpulse.com/economic-events/

 

OANDA Trading Podcast : BFM 89.9 Kuala Lumpur

Source: MarketPulse

Gold trades mixed in Asia

(Reuters) – Gold edged lower on Monday as the dollar held firm on news that China has cancelled trade talks with the United States, with the market also eyeing this week’s U.S. Federal Reserve meeting for guidance on future rate hikes.

Investors are awaiting this week’s Federal Reserve meeting, where the U.S. central bank is widely expected to raise benchmark interest rates and shed light on the path for future rate hikes.

“Gold traditionally trades poorly ahead of anticipated Fed hike and the dollar will have up ground,” said Stephen Innes, APAC trading head at OANDA.

Meanwhile, speculators increased their net short position in COMEX gold contracts in the week to Sept. 18, U.S. data showed on Friday.

 

Reuters

Asia shares slide as US-China trade talks shelved

BANGKOK (AP) — Shares have fallen in Asia after China reportedly rebuffed a plan for talks with the U.S. on resolving their dispute over trade and technology. The slow start to the week followed a mixed close Friday on Wall Street, where an afternoon sell-off erased modest gains for the S&P 500 that had the benchmark index on track to eke out its own record high for much of the day.

 

ANALYST’S VIEWPOINT: “The weekend headlines have not been a blessing for ‘risk sentiment,’” Stephen Innes of OANDA said in a commentary. He added, “the optimist in me is siding on ‘this too shall pass,’ but with markets closed in Japan, China and South Korea as a large part of Asia celebrates the Mid-Autumn festival, it impossible to gauge sentiment in these drastically diminished liquidity conditions.”

 

Tampa Bay Times

Week 39 – My scenarios

Week 39 – My scenarios


After sharing with you guys last week, what I would be looking at on the EURUSD             , sharing the scenarios I will be looking at this week on GBPUSD             .

After a very interesting looking weekly candle on this pair, I have an overall bearish biais that already started benefiting me last friday with a 2 targets winner (+215 pips & total 5,83 Risk to Reward ratio).

There are a few levels of support and resistance level I will keep an eye where I will look for entries, with an extra closer look to the most recent resistance level which got broken last week and price approuched it after last friday’s selloff on the GBP.

At the level I will be looking either for a rebound and will look to buy for a continuation to the upside; or for selling opportunities if price happens to break back below that level.

Will post an update and a review at the end of the week with how trading went on this pair.

Wishing guys a great week in the markets. Plan YOUR trade and trade YOUR plan!