Eyes & Ears on Trump
The US dollar continued to push higher over the European morning on Tuesday though as yet, the USD index is sitting just below last week’s highs at 98.12 last. Later today, President Trump will speak at the Economic Club of New York and traders will be keen to hear any comments regarding the president’s assessment of the ongoing trade talks with China, specifically the likelihood of a deal being signed in Chile this weekend.
EUR Lower on USD Strength
EURUSD remains under pressure today with price fighting to hold above the 1.1024 level. The resurgence in USD strength over recent sessions has weighed heavily on the single currency. A lack of key eurozone data this week will leave the focus mainly on USD flows.
UK Avoids Technical Recession
GBPUSD has been a little lower today, weighed on by a stronger USD. Confusion and uncertainty continue to stifle fuller directional moves in GBPUSD which has been in consolidation mode following the rally above 1.2782. Yesterday’s Q3 GDP reading for the UK came in at 0.3% vs 0.4% expected. This is encouraging given the risk that the UK might have fallen into a technical recession over Q3.
SPX500 Holds Near Highs
Risk assets remain near highs today though have seen very quiet sessions over recent days with the market awaiting the next big directional catalyst. US CPI data due tomorrow holds the potential to cause some volatility ahead of the key focus which is whether the US and China will sign the “phase one” trade deal at the APEC meeting in Chile this weekend. SPX500 trades 3087.43 last, holding near the upper trend line of the bullish channel.
JPY & Gold Rally
Safe havens have both been higher today despite the stronger US dollar and equities remaining near highs. It seems that risks around the expecting trade deal signing this week are leading to some building of safe-haven demand with JPY and gold both higher on USD. XAUUSD trades 1455.84 last, bouncing off the falling wedge low. USDJPY trades.
API On Watch
Oil prices have been a little higher though remain in the red on the week as of writing. Uncertainty ahead of the expected signing of the US/China trade deal is keeping flows constrained here. Later today, traders will get the first look at US inventory levels via the API report ahead of tomorrow’s headline EIA report. Any extreme readings could provide volatility for crude traders. Crude trades 56.97 last, still well supported above the 55 level.
USDCAD Moving Higher
USDCAD has been a little lower today following yesterday’s rally. Price is sitting firmly back above the 1.3207 level and eyeing the next resistance at the 1.33 mark. Today’s Trump speech could cause some movement in USD while the API report will also be on watch given crude’s impact on CAD price action.
AUD Breaks Support
AUDUSD trades lower today with price having broken back under the .6850 level. The rejection from the test of the long term bearish trend line is gathering pace though the outlook is not totally bearish. AUD unemployment data later in the week could fuel some pickup in the Aussie which could be further boosted if the US and China do sign off on the “phase one” trade deal. AUDUSD trades .6842 last.