Action Insight Daily Report 6-5-19

Dollar in Deep Selloff as Markets Price in 90% Chance of Fed Cut by September

Action Insight Daily Report 6-5-19 Dollar in Deep Selloff as Markets Price in 90% Chance of Fed Cut by September Talks of Fed rate cut intensified overnight after comments from Fed Chair Jerome Powell. Markets are now even pricing in 90% of a cut by September FOMC meeting. US stocks rebounded strongly with DOW closed up 512.40 pts or 2.06%. Positive sentiments carried through to Asia will broad based rallies in the markets. Meanwhile, Dollar is clearly the casualty in the turn in sentiments. In the currency markets, after this week's selloff, the greenback remains the weakest one for today so far. Swiss Franc follows as second weakest, then Sterling. Commodity currencies are the strongest ones, led by New Zealand Dollar and then Aussie. The picture for the week is similar, Dollar is overwhelming the weakest one, followed by Yen and then Sterling. Commodity currencies are strongest for the week so far. Technically, the first thing to note is that Dollar index breached 97.02 support yesterday, and the case of bearish trend reversal is building up. Both AUD/USD and USD/CAD are showing some commitment to reversals. In particular, USD/CAD has taken out 1.3429 support firmly. Focus will immediately be on 1.3357 support today. Firm break will confirm bearish reversal in USD/CAD. EUR/USD is, for now, still hesitating and pressing 1.1263 resistance. But decisive break would prompt more broad based selling in Dollar. In other markets, currently, Nikkei is up 1.77%. Hong Kong HSI is up 0.72%. China Shanghai SSE is up 0.63%. Singapore Strait Times is up 0.61%. Japan 10-year JGB yield is down -0.0188 at -0.119. Overnight, DOW rose 2.06%. S&P 500 rose 2.14%. NASDAQ rose 2.65%. 10-year yield rose 0.038 to 2.119. Full Report Here China Caixin PMI Services dropped to 52.7, subdued expectations linked to... Australia GDP grew 0.4% in Q1, driven mainly by government spending Fed Clarida: Will put in place policies to sustain price stability... DOW rises over 400pts on Fed Powell's openness to rate cut Trump: It's more likely tariffs on Mexico go on Fed Evans: Current monetary policy setting has been appropriate Quick Comments Top Movers | HeatMap | Pivot Points | Pivot Meters | Action Bias | Vol RBA Lowers Policy Rate to 1.25%. Two of Big Four Pledge... ECB to Add More Dovish Notes: Focus on Forward Guidance Extension... Threat of Dumping US Treasury Signals China is Running Out of... Central Bank Views | China Watch | Oil N' Gold | Special Topics USD/CAD Daily Outlook Daily Pivots: (S1) 1.3365; (P) 1.3409; (R1) 1.3437; More... USD/CAD drops to as low as 1.3376 so far and intraday bias remains on the downside. Current development suggests that choppy rise from 1.3068 has completed at 1.3564, on bearish divergence condition in 4 hour MACD. Decisive break of 1.3357 support will confirm this bearish case and target 1.3274 support next. More importantly, that could also have medium term channel support taken out, which carries larger bearish implications too. On the upside, break of 1.3449 minor resistance is needed to indicate completion of fall from 1.3564. Otherwise, further decline remains in favor in case of recovery. Full Report Here EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY Recommended Readings Gold Price Breaks Key Resistance, Dips Remain Supported First Impressions: Australian Q1 GDP Gold Takes Breather after Fed Hints at Rate Cuts Base Effects in the Driver's Seat but ECB Concerns The Yield Spread Albatross Around USD/JPY's Neck Fundamental Analysis | Technical Analysis In-depth Reports Threat of Dumping US Treasury Signals China is Running Out of Weapons in Trade War RBA Cuts Cash Rate and Leaves Open Prospects for Further Moves Fed: Dovish Policy Signal To Pave The Way For An Upcoming Insurance Cut 1990's Reloaded? Clues On The Fed's Path To "Insurance Cuts" US: Do Deficits Still Matter? Let The EU 'Game Of Thrones' Begin Economic Calendar GMT Ccy Events Actual Forecast Previous Revised 22:30 AUD AiG Performance of Service Index May 52.5 46.5 1:30 AUD GDP Q/Q Q1 0.40% 0.40% 0.20% 1:30 AUD GDP Y/Y Q1 1.80% 1.80% 2.30% 1:45 CNY Caixin PMI Services May 52.7 54.2 54.5 7:45 EUR Italy Services PMI May 49.8 50.4 7:50 EUR France Services PMI May F 51.7 51.7 7:55 EUR Germany Services PMI May F 55 55 8:00 EUR Eurozone Services PMI May F 52.5 52.5 8:30 GBP Services PMI May 50.6 50.4 9:00 EUR Eurozone PPI M/M Apr 0.20% -0.10% 9:00 EUR Eurozone PPI Y/Y Apr 3.10% 2.90% 9:00 EUR Eurozone Retail Sales M/M Apr -0.50% 0.00% 12:15 USD ADP Employment Change May 185K 275K 12:30 CAD Labor Productivity Q/Q Q1 0.40% -0.40% 13:45 USD Services PMI May F 50.9 50.9 14:00 USD ISM Non-Manufacturing/Services Composite May 55.5 55.5 14:30 USD Crude Oil Inventories -0.3M 18:00 USD Federal Reserve Beige Book

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