Action Insight Daily Report 5-24-19

Dollar Rally Faltered on Free Fall in Treasury Yields, Trade War Drags Sentiments

Action Insight Daily Report 5-24-19 Dollar Rally Faltered on Free Fall in Treasury Yields, Trade War Drags Sentiments Dollar's rally attempt faltered overnight as dragged down by steep decline in treasury yields. Dollar index did hit new high at 98.37 but closed sharply lower at 97.85. 10-year yield dropped -0.097 to close at 2.296, just inch above day low at 2.294. Concerns over prolonged US-China trade war dragged down sentiments as a whole. Trump repeatedly tried to sound upbeat on the negotiations but nobody is listening. The Markit PMIs for US released overnight showed deep deterioration in confidence. Upcoming data from the US will be crucial to market outlook beyond Q2. In the currency markets, Dollar is trading to regain some ground today but lacks follow through buying. For now, Yen is the strongest one for today and looks set to extend recent rally. Australian Dollar is the weakest one for today on talks that RBA could cut as many as three times this year. For the week, Swiss Franc and Yen remain the strongest ones on risk aversion. Sterling is the weakest as Prime Minister Theresa May will most surely step down in June while risk of no-deal Brexit is on the rise. Canadian Dollar is second weakest for the week on free fall in oil prices. Technically, EUR/USD is staying in consolidation from 1.1111 as it recovered strongly after dipping to 1.1107. More recovery would be seen but we don't expect a break of 1.1263 resistance ahead. USD/CHF decline resumed by taking out 1.0050 and is set to take on 1.0016. fibonacci support. USD/JPY's break of 109.81 minor support support suggests recent fall is ready to resume through 109.02 low. Ideally, we should also see EUR/JPY breaking through 122.08 temporary low to confirm Yen strength. In Asia, currently, Nikkei is down -0.43%. Hong Kong HSI is up 0.21%. China Shanghai SSE is down -0.04%. Singapore Strait Times is down -0.29%. Japan 10-year JGB yield is down -0.0104 at -0.07. Overnight, DOW dropped -1.11%. S&P 500 dropped -1.19%. NASDAQ dropped -1.58%. 10-year yield dropped -0.097 to 2.296. Full Report Here Westpac forecasts three RBA cuts this year, QE becomes attractive in... Trump: China trade deal happening fast, dangerous Huawei can be included Fed officials expressed concerns over persisting trade tensions UK PM May said to announce exit date today, Sterling decline... Free fall in treasury yields drag down Dollar 10-year yield resume medium term down trend, 2.292 fib level next IMF: New US-China tariffs will subtract about 0.3% of global GDP... Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol ECB Lacks Confidence that Economic Forecasts Could be Achieved. Focus on... FOMC Minutes Reinforced Patience Approach to Monetary Decision Rising US Inventory Adds Selling Pressure To Crude Oil Central Bank Views | China Watch | Oil N' Gold | Special Topics EUR/USD Daily Outlook Daily Pivots: (S1) 1.1130; (P) 1.1159; (R1) 1.1210; More..... EUR/USD breached 1.1111 to 1.1107 but recovered strongly since then. The development suggests that consolidation from 1.1111 is extending and intraday bias remains neutral first. While further rise cannot be ruled out, upside should be limited by 1.1263 resistance to bring down trend resumption eventually. ON the downside, firm break of 1.1107 will resume the larger down trend from 1.2555. Next target will be 100% projection of 1.1448 to 1.1183 from 1.1324 at 1.1059. However, sustained break of 1.1263 resistance will now and early sign of trend reversal and turn bias to the upside for 1.1448 key resistance. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings USD/JPY Could Decline Further Below 109.50 A Bonfire Of Vanities DXY Isn't Ready For A Breakout (Yet) | NZD Eyes A Corrective bounce RBA to Cut the Cash Rate to 0.75% by November; AUD to USD0.66 by End 2019 Stocks: S&P 500 Drops To Key Level US Durable Orders Eyed as Dollar Remains 'King' EURGBP Climbs, But More Upside Needed to Affirm Bullish Outlook Fundamental Analysis | Technical Analysis In-depth Reports RBA to Cut the Cash Rate to 0.75% by November; AUD to USD0.66 by End 2019 ECB Lacks Confidence that Economic Forecasts Could be Achieved. Focus on June for TLTROs Details May's "New, Bold" Brexit Deal is Dead on Arrival; Pound's Outlook Turns Grim FOMC Minutes Reinforced Patience Approach to Monetary Decision Euro Could Have a Cold June OPEC+ Maintains Output Cut. Market Balance Suggests No Practical Need to Raise Output US-China Trade War Intensifies as China Retaliates US-China Trade: Back in the Tit-for-Tat Spiral Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 22:45 NZD Trade Balance (NZD) Apr 433M 400M 922M 824M 23:30 JPY National CPI Core Y/Y Apr 0.90% 0.90% 0.80% 5:30 JPY All Industry Activity Index M/M Mar -0.20% -0.20% 8:30 GBP Retail Sales Ex Auto Fuel M/M Apr -0.50% 1.20% 8:30 GBP Retail Sales Ex Auto Fuel Y/Y Apr 4.30% 6.20% 8:30 GBP Retail Sales Inc Auto Fuel M/M Apr -0.40% 1.10% 8:30 GBP Retail Sales Inc Auto Fuel Y/Y Apr 4.50% 6.70% 10:00 GBP CBI Reported Sales May 6 13 12:30 USD Durable Goods Orders Apr P -2.00% 2.60% 12:30 USD Durables Ex Transportation Apr P 0.20% 0.30%

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