 The forex markets are relatively quiet in range today as multiple factors are having conflicting impacts. Asian equities continue to diverge from the US stocks, as weighed down by trade worries. While Yen is mildly firmer today, it's the second weakest for the week, following Swiss Franc. Strengthen in US and European yields countered the positive effect of risk aversion on Yen. Sterling is back in consolidative mode after the Brexit lift faded rather quickly. Euro also turned mixed. But Canadian Dollar surges broadly, firstly as helped by WTI crude oil's breach of 70, and secondly, as there were positive words from Trump on trade talks. What's clearest is that Australian and New Zealand Dollar are weak, due to risk aversion, trade threats, yield gap, as well as monetary policy divergence with others. Major US indices closed higher overnight with DOW gained 0.44%, S&P 500 rose 0.37% and NASDAQ rose 0.61%. Treasury yields staged a strong rally too. 5-year yield rose 0.041 to 2.869, 10-year yield rose 0.040 to 2.977, 30-year yield rose 0.036 to 3.124. Asian stocks are weak, with Nikkei down -0.46% at the time of writing. Hong Kong HSI is down -0.40%. Singapore Strait Times is down -0.11%. China Shanghai SSE is currently down -0.33%. More importantly, SSE hit as low as 2647.17 earlier today, and has already breached August low at 2653.11. Key support level of 2638.30 (2016 low) is within touching distance. Gold gyrates lower as consolidation from 1214 extends. Technically, despite yesterday's strong rally, USD/JPY is still held below 111.75/82 resistance zone. This resistance zone will remain a focus today and decisive break will resume the rebound from 109.76 towards 113.17 high. USD/CHF is also eyeing 0.9766 resistance to confirm short term reversal. EUR/USD is holding above 1.1525 support, which remains a focus too. |
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