We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Bearish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
GBP/USD
Bearish
USD/JPY
Bullish
Gold
Mixed
Oil - US Crude
Bullish
Bitcoin
Bearish
More View more
Real Time News
  • Commodities Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Gold: 0.46% Oil - US Crude: -0.00% Silver: -0.46% View the performance of all markets via https://www.dailyfx.com/forex-rates#commodities https://t.co/KAL8UO1FUA
  • Fed's Barkin: - Think we are headed against globalization - Challenges Euro has faced show decline in globalization $EUR
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 96.94%, while traders in France 40 are at opposite extremes with 78.74%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/VY1iqzU5wz
  • Fed's Barkin: - Significant and extended fiscal policy makes sense - We have taken the balance sheet down $DXY
  • Indices Update: As of 19:00, these are your best and worst performers based on the London trading schedule: Germany 30: -0.09% France 40: -0.12% Wall Street: -0.72% US 500: -0.73% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/svzRV1JmbY
  • Fed's Barkin: - We already have a digital currency, its the US Dollar $DXY
  • Fed's Barkin: - Stock market not reacting to certain events is surprising $DXY $VIX
  • Fed's Barkin: - Coronavirus injecting a lot of uncertainty - Logistics in China making it hard to get manufacturing restarted $USDCNH
  • US #equity futures are marginally lower, with the #Dow Jones down 0.1%. However, despite the investor angst over the rising spread of the #Coronavirus, US equities have generally remained relatively robust. Get your market update from @JMcQueenFX here: https://t.co/QszmxFnYpt https://t.co/a77cCZFQ3B
  • Fed's Barkin: - US economy pacing well - Investment should recover with reduced uncertainty around trade $DXY $SPX
Asia AM Digest: JPY, AUD Await Risk Trends as USD Reverses Gains

Asia AM Digest: JPY, AUD Await Risk Trends as USD Reverses Gains

2018-05-21 23:00:00
Daniel Dubrovsky, Analyst
Share:

Current Market Developments – USD Reverses Prior Gains

The US Dollar was initially on its way to close at a new high this year until it put in a reversal towards the second half of the day. Perhaps some profit taking weighed on the currency given a lack of crucial economic event risk. The greenback has been in an aggressive uptrend since the middle of April.

A speech from Philadelphia Fed President Patrick Harker amplified USD weakness towards the end of the session. Mr. Parker said that he could back three more 2018 hikes if inflation accelerates. He then added that he sees no rush to increase rates and that he favors pausing hiking once they hit a neutral setting.

If you look at the spread between US 2-year and 10-year government bond yields (and at 30-year as well), they narrowed as Fed’s Harker spoke. This speaks to a flattening yield curve. Perhaps the markets interpreted his speech as being more favorable for near-term higher rates and not so much for the long run.

Prior Session Recap – Oil Rises and Sentiment Improves

Crude oil prices rallied to a new high this year so far thanks to a few developments. China, the second largest world consumer of oil, said that it will increase purchases of US energy imports as part of the de-escalating trade tensions with the world’s largest economy.

Meanwhile, geopolitical tensions probably increased the fear of supply disruption, further boosting the commodity. The International Energy Agency (IEA) was discussing with key oil-producing nations to make up for the loss in supply from Venezuela due to impending sanctions following a controversial election. Then, US Secretary of State Mike Pompeo said that the ‘strongest sanctions in history’ will be placed on Iran.

An improvement in sentiment thanks to de-escalating trade tensions between the US and China sent the S&P 500 and Dow Jones up 1.21% and 0.74% respectively on Monday. The anti-risk Japanese Yen succumbed to selling pressure while the higher-yielding Australian and New Zealand Dollars outperformed. The British Pound depreciated amidst political uncertainty.

A Look Ahead – Markets Eyeing Risk Trends Again

Another Asian session that is lacking in key economic events will probably put risk trends as the catalyst for market developments. If stocks continue climbing amidst the progress in US/China trade talks, then the Japanese Yen could weaken as the sentiment-linked Australian and New Zealand Dollars advance.

DailyFX Economic Calendar: Asia Pacific (all times in GMT)

DailyFX Economic Calendar

DailyFX Webinar CalendarCLICK HERE to register (all times in GMT)

DailyFX Webinar Calendar

IG Client Sentiment Index Chart of the Day: NZD/USD

NZD/USD IG Client Sentiment Index

CLICK HERE to learn more about the IG Client Sentiment Index

Retail trader data shows 65.6% of NZD/USD traders are net-long with the ratio of traders long to short at 1.91 to 1. In fact, traders have remained net-long since Apr 22 when NZD/USD traded near 0.72643; price has moved 4.6% lower since then. The number of traders net-long is 1.9% higher than yesterday and 9.9% higher from last week, while the number of traders net-short is 0.9% higher than yesterday and 11.4% lower from last week.

We typically take a contrarian view to crowd sentiment, and the fact traders are net-long suggests NZD/USD prices may continue to fall. Traders are further net-long than yesterday and last week, and the combination of current sentiment and recent changes gives us a stronger NZD/USD-bearish contrarian trading bias.

Asia AM Digest: JPY, AUD Await Risk Trends as USD Reverses GainsAsia AM Digest: JPY, AUD Await Risk Trends as USD Reverses Gains

Five Things Traders are Reading:

  1. Gold Price Forecast: Less Hawkish FOMC to Fuel Larger Rebound by David Song, Currency Analyst
  2. USD Patterns Favor Weaker USDJPY; Driving Gold & EURUSD Higher by Jeremy Wagner, CEWA-M, Head Forex Trading Instructor
  3. USD/JPY Breaks Higher Toward 2018 Highs, US-China Trade War Fears Cedeby Tyler Yell, Forex Trading Instructor
  4. Weekly Technical Perspective on AUD/USD by Michael Boutros, Currency Strategist
  5. Bearish AUD/USD Momentum Continues to Unravel, RBA Rhetoric on Tapby David Song, Currency Analyst

--- Written by Daniel Dubrovsky, Junior Currency Analyst for DailyFX.com

To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.