FX Market Recap
- On Wednesday, U.S. stocks trimmed a part of the losses made in the previous sell-off session, because U.S. President Donald Trump indicated that a trade agreement with China could still be achievable.
- The Dow Jones Industrial Average bounced 207 points (+0.8%) to 25532, the S&P 500 climbed 22 points (+0.8%) to 2834, and the Nasdaq Composite finished 87 points (+1.1%) to 7734.
- The precious metal gold disappointed to make further growth north of $1,300 an ounce, as it shrank 0.2% to $1,297. While crude oil prices increased, as a further decline in the market’s risk appetite was avoided. Crude oil futures surged 1.2% to $61.78 a barrel, and Brent was up 1.4% to $71.24 a barrel.
GBP/USD - Double Bottom Breakout Driving Sellers
The U.K. politics continues to direct price action in the British Pound and with cross-party discussions between the government and the labour dispensing light in the way of progress. Consequently, the gains the Pound have been vanished with GBP/USD breaking 1.29 on the downside.
The Cable is experiencing from the strong bearish trend on the 4-hour chart, as it trades beneath the 50, 100, and 200 Moving Averages. Moreover, the RSI (Relative Strength Index) resides over 30, thus not showing oversold conditions.
The immediate support is at the recent lows of 1.2828. Further down, the GBP/USD can dip towards 1.2796, the double bottom support level from February.
On the flip side, resistance awaits at 1.2915 that held pound/dollar down in recent hours. It is followed by 1.2874 seen earlier this week and 1.2990 that worked as support beforehand.
Support and Resistance
Key Trading Level: 1.2927
EUR/AUD Continues to Head North, Australian Dollar Weakens
During the Asian session, Australia’s unemployment rate surged to the highest in eight months while full-time jobs declined, forming sentiments that RBA may be forced to lower rates soon to stimulate the economy.
The RBA has kept rates unchanged at record low 1.50% since August 2016. It depends on labour market strength, pick up in wage growth and inflation in the face of a sharp economic slowdown led by a property market downturn.
Anyhow, the Aussie slipped to 4 months lower over worse than expected economic figures and the US-China trade war.
For now, the pair is still bullish as it recently closed bullish engulfing on the daily timeframe, which suggests the bullish power is still strong. The cross pair can target 1.6345 in coming days.
Support and Resistance
Key Trading Level: 1.6026
Consider staying bullish above 1.6150 to target 1.6250 and 1.6340 in coming days.