ASIC and FCA licensed Retail FX broker AETOS Capital Group have provided their daily commentary on traditional markets for April 30, 2019.
The Euro closed 0.33% higher at $1.1185 overnight as the USD fell against a basket of currencies, slipping further from a 23-month high set late last week. Interestingly, data showed that U.S. consumer spending gained 0.9% in March, which marks the biggest monthly increase in more than 9-1/2 years – adding to inflation question.
The core personal consumption expenditure price index, which provides a measure of the prices paid by people for domestic purchases of goods and services, excluding the prices of food and energy, did not change in March, leaving its year-over-year increase at 1.6%, the smallest rise in 14 months.
As the central bank’s policymaking board meets tonight and Wednesday, look out for clues on the Fed’s global economic outlook given the positive news being released so far. The flurry of better than expected news could alter their bias slightly however analysts do not anticipate any major changes from Fed officials.
Manufacturing surveys from Europe and China are due later this week, along with a first reading on Euro Zone GDP. The U.S. payrolls report on Friday is forecast to show a solid increase of 185,000 jobs in April, with unemployment at 3.8%.
Most major currencies held in tight ranges on light trading volume as Japan began its extended Golden Week holiday. China will observe its Labor Day holiday from Wednesday to Friday.
EUR/USD Daily Chart
The April 26 doji is followed by a rally. Daily RSI diverged on April 25 and is now rising. Monthly RSI is falling, and a long upper wick is in place on April’s candle. The monthly signals typically hold more weight than the daily signals, therefore look to sell on rallies with targets at 1.1100 and further at 1.1000.
GBP closed +0.1% overnight and since the Fed’s March meeting, U.S. economic data has shown that expansion is continuing despite significant concerns of recession and slowing since late 2018. Last Friday, the government said first-quarter GDP grew at a 3.2% pace, a figure bolstered largely by a surge in inventories and exports.
Speculators have raised their long dollar positions to $37.21 billion last week, the highest level since December 2015, according to U.S. Commodity Futures Trading Commission data released on Friday.
Brexit negotiations and a number of global data including U.S. payrolls could each be the trigger for large currency swings this week.
Keep a watch for any major fundamental shifts in the data as markets and traders search for direction.
In late U.S. trading, an index that tracks the greenback against the euro, yen, sterling and three other currencies was down 0.14% at 97.865. Last week, it reached 98.330, the highest since May 2017.
GBP/USD Daily Chart
GBP/USD received an oversold bounce after daily RSI dipped with Friday’s fall. The pair still closed below the 200-DMA at 1.2962. If this level is cleared, there may be room for reversion toward the 55-DMA, now at 1.3484.
For the shorts, prices have yet to close below 1.2895, the 50% retracement of 2019’s rise that was violated Thursday. A close below there would target the Feb low and the 61.8% at 1.2773/80.
Major Economic Events happening this week (AEDT Time Zone)
|Economic event (Date)||Previous||Forecasted||Actual|
|EU – Business Confidence (29 April)||0.53||0.51||0.42|
|US – Personal Income MM March (29 April)||0.2%||0.3%||0.1%|
|US – Personal Spending MM Feb (29 April)||0.1%||0.3%||0.1%|
|US – Personal Spending MM March (29 April)||–||0.5%||0.9%|
|GB – Gfk Consumer Confidence (30 April)||-13||-12||-13|
|CN – NBS Manufacturing PMI (30 April)||50.5||50.8||–|
|DE – Gfk Consumer Confidence (30 April)||10.4||10.6||–|
|DE – Inflation Rate YY (30 April)||1.3%||1.3%||–|
|US – ISM Manufacturing PMI (2 May)||55.3||54.7||–|
|US – FED interest Rate Decision||2.5%||2.5%||–|
|CN – Caixin Manufacturing PMI (2 May)||50.8||51||–|
|DE – Markit Manufacturing PMI Final (2 May)||44.1||44.5||–|
|GB – BoE Interest Rate Decision (2 May)||0.75%||0.75%||–|
|GB – BoE Quantitative Easing (2 May)||£435B||£435B||–|
|US – Non Farm Payrolls (3 May)||196K||178K||–|
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