Forex news for Asia trading on 28 January 2019
- Economic data coming up in the European session
- GBPNZD is the biggest mover so far today
- Gold down in early trading after sharp Friday rise took the price above $1300
- Chinese stocks open with solid gains
- China's industrial profits for December YoY -1.9% vs -1.8% in November
- PBOC sets USD/CNY central rate at 6.7472 (vs. Friday at 6.7941)
- Chinese Premier Li: China's economy has enough resilience
- Pres. Trump says he is open to declaring a national emergency
- Starbucks Ex CEO Howard Schultz seriously thinking of independent run for 2020 presidency
- BOJ December meeting: It was appropriate to continue easing persistently
- Japan PPI services producer prices rise 1.1% YoY vs est 1.2%
- Foxconn cuts 50K workers earlier than usual as result of Apple slowdown
- UK May "privately" tells Cabinet that she rules out a no-deal, but....
- WTO to launch investigation on Trump China tariffs
- Ireland: Will not accept any changes to an agreement aimed at preventing a hard border
- Votes start Tuesday in the Brexit game of chicken
- On tap this week: Earnings, Fed decision, US jobs report
In other markets:
- Spot gold $1303.56, up $0.42 or 0.03%. The price stayed above the $1298 level (old high from January before the run higher
- WTI crude oil $53.35, down -$0.34 or -0.61%
- Bitcoin on Coinbase is trading down -$85.32 at $3460.06. Looking at the hourly chart below, the price is running away from the 100 and 200 hour MA (held below late Saturday and on Sunday). The swing low from January 22 comes in at $3425. That is the next target (see chart below)
- Nikkei, -0.41%
- Shanghai Composite, +0.25%
- Hang Seng, +0.37%
- Kospi, +0.34%
- The PBOC set the USD/CNY at 6.7473 down from 6.7941. The Yuan midpoint was set at the strongest level since July 19, 2018
As the week got started the GBP was under some early pressure on weekend news that Ireland would not accept any changes to an agreement aimed at preventing a hard border. However, the declines were limited when The Sun reported that PM May told cabinet members that she has ruled out a no-deal Brexit. The news helped to modestly support the GBP a bit and get off the low. Although the GBP is still down on the day, the weakest currency is the USD. It has fallen vs. all the major currencies with the largest decline vs the NZD (0.45%). The AUDUSD is also higher (weaker dollar) even though Australia is enjoying a day off in honor of Australia Day.
The weakness in the USD has gotten some of its push from some weekend news that the Fed might be looking the stop the balance sheet run off sooner rather than later. Remember in December Fed's Powell implied that the balance sheet reduction would likely continue on "auto-pilot". The stock market did not like that idea, stocks fell sharply, and since that time, the Fed and Chair Powell has softened that idea. Now with the weekend WSJ article, and with the Fed meeting and decision on Wednesday, if the Fed does imply a slowing of the balance sheet runoff, that could be more bearish for the greenback.
Of course the government shutdown was at least temporarily stopped with Pres. Trump not changing his tune too much. In fact, he might be even a little more set in his ways for a border wall as a result of the perception of his caving into the Dems. Does that worry investors in the greenback? It might if nothing is done before the next scheduled shut down on February 15th.
Other key news this week will be Brexit votes on amendments on Tuesday, a bunch of earnings. The US/China trade representative meetings in Washington and the US employment report on Friday. The economic calendar could also start to get sorted out with the postponed releases being added to the schedule. No one knows what that calendar will look like, but we know the backlog of releases should make for interesting days ahead. I just hope they get caught up before the next shutdown.
As for some technicals as the market moves into the European session:
- The EURUSD moved off of support at the 38.2% of the move down from the January high at 1.1395 and extended toward the 50% retracement of that same move at 1.1429. The high only reached 1.14253 and has come back off to 1.1414 currently. The 1.1410 was the swing high from January 18. A move below might have buyers selling back toward the 1.1395 support again
- The NZDUSD moved toward a swing area at the 0.6869-785 area and seems to have stalled on the first look. The high reached 0.6872 - between the two extremes. A break above would likely lead to more momentum buying, but at the moment, buyers are taking some profit against the area
- The USDJPY felll below its 200 hour MA (currently at 109.394) on the way to a low of 109.25. The high reached 109.55 in the first few minutes of trading. Stay below the 200 hour MA will have traders looking toward the 109.14 level.
Good fortune with your trading. Eamonn will be back tomorrow after his long weekend.
