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Monday, May 27, 2019

• Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European trading session on Monday. • Given Fri

   •  Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European trading session on Monday.   •  Given Friday's sustained move beyond a flag chart pattern on the 1-hourly chart, technical set-up now seems to have turned in favor of bullish traders. Moreover, the fact that the commodity is holding comfortably above 200-hour SMA coupled with bullish oscillators on hourly/daily charts further add credence to the constructive outlook and support prospects for an extension of the recent positive momentum. A sustained move beyond the $1288-89 horizontal zone will reaffirm the bullish bias and prompt some aggressive technical buying, setting the stage for a possible move towards reclaiming the key $1300 psychological mark amid a subdued USD price action.Gold 1-hourly chart 

Analysts at National Bank Financial suggest that for the Canadian economy, it’s going to be a busy data week which will feature Q1 GDP on Friday. Key

Analysts at National Bank Financial suggest that for the Canadian economy, it’s going to be a busy data week which will feature Q1 GDP on Friday.Key Quotes“Trade, is likely to weigh on the headline growth figure judging from monthly reports which showed real imports expanding strongly in the three months to March while real exports slumped. Finally, residential investment was also weak according to construction data and should thus weigh on growth in the quarter. All told, GDP may have expanded 0.9% in annualized terms in Q1.” “Looking at monthly data, the handoff to Q2 looks very good, with March GDP on pace to expand 0.4% courtesy of gains in the wholesale and retail sectors.” “Also this week, the Bank of Canada will hold a monetary policy meeting. Uncertainties regarding the global economic outlook are not easing. While it is true that tariffs on Canadian steel and aluminum exports to the US have been eliminated, trade tension between the US and China have taken a turn to the worst recently. Meanwhile inflation is not a threat, with core measures near the BoC’s midpoint of its target range Consequently, we expect the Bank of Canada to stay put and reiterate that an accommodative policy interest rate continues to be warranted. Although no press conference is scheduled following the announcement, a speech set to be delivered by Deputy Governor Carolyn Wilkins on Thursday should provide some valuable insight.” “On Thursday, balance of payments data for the third quarter could show the current account deficit widening to around C$18.0 billion, led by a deterioration in the goods trade balance.”

Analysts at Rabobank point out that on May 23rd, the Election Commission of India (ECI) announced that the Bharatiya Janata Party (BJP) led by Prime M

Analysts at Rabobank point out that on May 23rd, the Election Commission of India (ECI) announced that the Bharatiya Janata Party (BJP) led by Prime Minister Narendra Modi won the general elections in India.Key Quotes“India’s consistent budget deficits are expected to continue over the coming years under a BJP-led government in the second term.” “Fiscal consolidation is needed to lower elevated debt levels as India’s weak fiscal positon is a major macroeconomic challenge.”

The Turkish Lira is prolonging its upside momentum at the beginning of the week and is now dragging USD/TRY to lows in the sub-6.04 zone. USD/TRY look

USD/TRY extends the down move to sub-6.04 levels.The 21-day SMA offers initial support for the time being.CBRT FSR, GDP, Trade Balance next on the docket.The Turkish Lira is prolonging its upside momentum at the beginning of the week and is now dragging USD/TRY to lows in the sub-6.04 zone.USD/TRY looks to trade, dataThe pair is trading on the defensive for the second session in a row on Monday amidst marginal volatility and slim trading conditions in the global markets due to the holidays in the US and the UK. In the meantime, the absence of fresh developments in the US-China trade front appears to be supporting the positive mood around the riskier assets and helping the Lira to regain some ground lost and shift its focus back to the psychological support at 6.00 the figure. On the domestic front, the rerun of the municipal elections in Istanbul later next month continues to be on top of the agenda, while upcoming events include the publication of the Financial Stability Report (FSR) by the CBRT and releases of the Trade Balance figures and GDP for the first quarter.What to look for around TRYThe selling interest around the Turkish Lira appears somewhat alleviated at the beginning of the week, motivating the pair to extend the rejection from recent tops. As usual, trade effervescence should remain as key driver in the EM FX space, while frictions between the AKP and its main opposition party in the run up to the municipal elections in Istanbul are also emerging as another source for Lira volatility. Further out, potential US sanctions following the purchase of the Russian missile defence system keeps lingering over the country as well as sanctions over Iranian crude oil exports. Additionally, the independence and credibility of the CBRT should remain under the microscope against the omnipresent conflict between the government and the bank’s authorities. Recently, another focus of attention has emerged after the IMF urged the government to start implementing reforms aimed to bring back stability to the country’s fundamentals.USD/TRY key levelsAt the moment the pair is losing 0.50% at 6.0519 and a breach of 6.0344 (low May 27) would open the door to 5.9472 (low May 10) and then 5.7870 (55-day SMA). On the other hand, the next barrier emerges at 6.1516 (high May 23) seconded by 6.2457 (2019 high May 9) and then 6.8353 (high Aug. 30 2018).

• The GBP/JPY cross struggled to capitalize on its early uptick to levels beyond mid-139.00s and has now dropped back within the striking distance of

   •  The GBP/JPY cross struggled to capitalize on its early uptick to levels beyond mid-139.00s and has now dropped back within the striking distance of over four-month lows.   •  Failure to find acceptance above 100-hour SMA clearly suggest that the near-term bearish pressure might still be far from being over and support prospects for further downside.Technical indicators on hourly charts have again started gaining negative momentum and add credence to the bearish outlook, albeit oversold conditions on the daily chart warrant some caution before placing any aggressive bets.  Hence, it would be prudent to wait for a sustained weakness below the 138.55-50 horizontal support, below which the cross is likely to turn vulnerable to break below the 138.00 handle and aim towards testing its next support near the 137.40-35 region.GBP/JPY 1-hourly chart 

The NZD/USD pair closed the previous week with small gains and started the new week in a calm manner and has been moving sideways in a tight 20-pip ra

Empty economic calendar paves the way for subdued trading action.Memorial Day holiday in the U.S. keeps volume down.RBNZ to publish Financial Stability Report later this week.The NZD/USD pair closed the previous week with small gains and started the new week in a calm manner and has been moving sideways in a tight 20-pip range since. As of writing, the pair was virtually unchanged on a daily basis at 0.6548. The U.S. markets will be closed due to Memorial Day holiday and it also suggests that President Trump is unlikely to tweet about the trade conflict with China. The lack of macroeconomic data releases and political developments in the second half of the day is likely to force the pair to continue to move sideways. While speaking to reporters during his visit to Japan, President Trump said that he thought that the would have a deal with China sometime in the future but added that they were not ready to do it yet. Later this week, the Reserve Bank of New Zealand will be releasing its Financial Stability Report and Governor Orr will be delivering his remarks on the report. On the other hand, the S&P/Case-Shiller House Price Index and the Consumer Board Consumer Confidence Survey will be featured in the U.S. economic docket on Tuesday.Technical levels to consider 

Iris Pang, economist at ING, notes that China’s industrial profits fell 3.4% YoY YTD in April. Key Quotes “The fall in profits has continued since Nov

Iris Pang, economist at ING, notes that China’s industrial profits fell 3.4% YoY YTD in April.Key Quotes“The fall in profits has continued since November 2018, except for in March (13.9%YoY YTD). We believe this falling profit trend will continue for most of 2019.” “Examining the details by industry over several months, we find that the falls in profits in some sectors are structural.” “With falling business opportunities from other countries in the technology sector, industrial profits in May 2019 could drop to 5.0% YoY YTD. Looking forward, industrial profits face drags on the economy from lower technology exports, countering pulls from stimulus measures. Overall, we still expect profit shrinkage for 2019.” “With China's technology manufacturers facing intensifying headwinds from other economies, the domestic economy needs to grow faster to offset some of these headwinds. We expect construction of infrastructure projects to speed up, and liquidity easing to match the funding needs from infrastructure projects so that GDP growth can reach at least 6.0% in 2019.”

Following the Asian steady decline from the 59 handle, WTI (futures on Comex) is seen consolidating in a tight range below the 58.50 barrier, with the

Oil undermined by US-China trade war and global growth concerns Downside appears capped amid supply threats and OPEC cuts.Focus shifts to US weekly crude stockpiles data for fresh direction. Following the Asian steady decline from the 59 handle, WTI (futures on Comex) is seen consolidating in a tight range below the 58.50 barrier, with the bias leaning towards the downside amid looming concerns over the US-China trade dispute.   On the US-China trade update, the US President Trump recently said that “we are not ready to make a deal with China”, refueling concerns over the ongoing trade dispute. Moreover, uncertainty over the UK political situation and Brexit also continues to weigh on the investors' mood and in turn reduce the appetite towards the higher-yielding assets such as oil. However, the losses appear capped as the black gold continues to draw support from the looming supply risks, in the wake of the US sanctions on Iran’s exports and escalating Middle East geopolitical tensions. Meanwhile, the ongoing OPEC oil output cuts also help keep the downside in check. Markets now stay focused on the US weekly crude inventory reports due later in the week ahead for the next direction on the prices. In the meantime, the risk sentiment amid trade-related developments will continue to remain the key market driver amid thin trading.   WTI Technical Levels  

According to analysts at Danske Bank, even as the EU elections saw shrinking support for established parties in many countries, the influence of Euros

According to analysts at Danske Bank, even as the EU elections saw shrinking support for established parties in many countries, the influence of Eurosceptic groups in terms of policy-making will remain limited with a vote share of 23% (from 20.6% previously).Key Quotes“Losses for the Social Democrats and Conservatives - which lost their absolute majority for the first time since 1979 - were amply offset by gains for the Greens and Liberals, meaning that overall sentiment in parliament will remain pro-EU.” “Still, in France, President Macron's party En Marche lost the race against the far right Rassemblement National, calling into doubt his grand plans for domestic reforms and further EU integration. Similarly, in Germany, critical voices in the grand coalition are getting louder after another heavy defeat for the SPD party.” “In Italy, despite a strong result with 33.6% of the votes, Lega leader Salvini is mulling over changes to the governing coalition with Five Star or the possibility of a snap vote. However, in light of the fractious state of the two coalition partners, the risk of an election in H2 19 continues to linger in our view, especially if another budget row with Brussels breaks out in the autumn.” “While national governments will digest the repercussions of the election results in the coming days, the focus in Brussels reverts to coalition building.”“The EU heads of state will come together in Brussels on Tuesday, 28 May to discuss the outcome of the vote and start the nomination process for a range of top EU positions. If the political process is smooth, the election of a new Commission president could already occur in July, but in light of the increased fragmentation of the political centre, a decision in September or October seems more likely in our view.”

• Improving risk sentiment weighs on CHF’s safe-haven status and helped regain traction. • The up-move seemed unaffected by a subdued USD price actio

   •  Improving risk sentiment weighs on CHF’s safe-haven status and helped regain traction.
   •  The up-move seemed unaffected by a subdued USD price action amid Fed rate cut bets.
The USD/CHF pair continued scaling higher through the early European session on Monday and spiked to fresh session tops, levels beyond mid-1.0000s in the last hour. Bulls continued showing some resilience near the parity mark, with a slight improvement in the global risk sentiment denting the Swiss Franc's relative safe-haven status and assisting the pair to catch some aggressive bids at the start of a new trading week.  The intraday positive momentum seemed rather unaffected by a mildly weaker tone surrounding the US Dollar, which remained on the defensive amid growing bets for a Fed rate cut following the latest disappointment from the US durable goods orders data. It, however, remains to be seen if bulls are able to capitalize or the up-move fizzles out at higher levels amid relatively thin liquidity conditions on the back of holidays in the UK/US and concerns over a further escalation in the US-China trade tensions.Technical levels to watch 

In opinion of FX Strategists at UOB Group, USD/JPY could test the 109.20 region ahead of a potential moderate rebound. Key Quotes 24-hour view: “We in

In opinion of FX Strategists at UOB Group, USD/JPY could test the 109.20 region ahead of a potential moderate rebound.Key Quotes24-hour view: “We indicated last Friday that USD “could dip below the strong 109.40 support but last week’s low near 109.00 is unlikely to come under threat”. USD subsequently dipped to 109.26 before recovering. Downward pressure is beginning to wane and for today, 109.00 is still not expected to come into the picture. From here, USD could retest the 109.25 level before staging a more robust recovery. On the upside, a move above 109.65 would indicate that the current soft phase has stabilized”. Next 1-3 weeks: “USD subsequently came close to the top of our expected 109.40/110.80 sideway-trading range (high of 110.67) before diving yesterday to an overnight low of 109.45, just above the bottom of our expected range. For now, there is no change to our view but we are not ruling out a dip below 109.40. That said, only a break of 109.00 would indicate that the current ‘sideway-trading’ phase has morphed into a ‘negative’ one”.

These are the main highlights of the CFTC report for the week ended on May 21. Speculators increased their net shorts in AUD to the highest level sinc

These are the main highlights of the CFTC report for the week ended on May 21. Speculators increased their net shorts in AUD to the highest level since early November 2018, always on the back of persistent jitters around the US-China trade dispute and rising speculations of a rate cut by the RBA in H2 2019.GBP net shorts moved higher to levels last seen in March 12 following the lack of solution around Brexit and increasing uncertainty around the UK government.  EUR net shorts climbed to 2-week highs amidst rising speculations on the EU parliamentary elections and poor data releases, which confirmed the slowdown in the region and the neutral/dovish stance from the ECB. Of note is the move in the safe haven JPY, where speculators trimmed their net short positions to the lowest level since March 5 on the back of US-China trade fears and the consequent inflows into safe havens.

Having faced rejection once again near the midpoint of 1.27 handle, the GBP/USD pair changed course and quickly eroded nearly 50-pips on increased anx

Brexit anxiety, as Johnson set to replace PM May, continue to hurt Sterling. Thin trading on account of the UK, US holiday to aggravate the moves.Having faced rejection once again near the midpoint of 1.27 handle, the GBP/USD pair changed course and quickly eroded nearly 50-pips on increased anxiety over the UK political scenario and Brexit while the holiday-thinned markets also helped to accentuate the down move. The UK markets are closed today in observance of Spring Bank holiday. The corrective upside in the spot from four-month lows of 1.2605 continues to run into stiff resistance, as the odds of the UK leaving the European Union on October 31st without a Brexit deal are seen rising, with the pro-Brexit hard-liner Boris Johnson is expected to replace Theresa May as the British Prime Minister. It’s worth noting that four of eight leadership candidates have said Britain must leave the EU on Oct, 31st even if no deal is in place. More so, the latest comments from the UK opposition Labour Party Finance Policy Chief McDonnell hinting towards a general election and a second referendum added to the Brexit chaos and weighed negatively on the British currency. Earlier today, the pair extended its recovery to 1.2755 levels following the UK EU election outcome that showed that the Brexit Party secured the highest number of votes. Haresh Menghani, FXStreet’s Analyst notes, “the initial leg of recovery was supported by mostly upbeat UK retail sales data for April and got an additional boost after the UK PM Theresa May finally announced that she will be stepping down as Conservative Party leader on June 7th. Apart from the latest UK political development, the positive momentum was further supported by a modest US Dollar pullback from levels beyond the 98.00 handle - roughly two-year high.”  “Both the UK and the US markets will remain closed on Monday and hence, any incoming Brexit-related news/development might turn out to be an exclusive driver of the pair's momentum”, Haresh adds.GBP/USD Technical Levels 

EUR/USD daily chart EUR/USD Overview Today last price 1.1198 Today Daily Change 24 Today Daily Change % -0.09 Today daily open 1.1208 Trends Daily SMA

EUR/USD is struggling for direction on Monday following the recovery seen during the second half of last week, although the up move met sellers just beyond 1.1200 the figure earlier today.On the upside, spot needs to clear the 55-day SMA at 1.1235 to alleviate downside pressure. This area is considered the last defence of a test of monthly peaks near 1.1270.The broader scenario, however, remains bearish while below the multi-month resistance line at 1.1273.EUR/USD daily chart  

• The ongoing slide in oil prices weigh on Loonie and helped gain some traction. • Subdued USD demand/holiday-thinned liquidity conditions seemed to

   •  The ongoing slide in oil prices weigh on Loonie and helped gain some traction.
   •  Subdued USD demand/holiday-thinned liquidity conditions seemed to cap gains.
The USD/CAD pair edged higher at the start of a new trading week and is currently placed at session tops, recovering a part of Friday's intraday slide.  The pair extended its rejection slide from the key 1.3500 psychological mark and lost some additional ground on Friday, weighed down by a follow-through US Dollar retracement from two-year tops following the disappointing release of US durable goods orders data. The USD bulls held on the defensive through the early European session on Monday amid growing bets for a Fed rate cut, albeit some renewed weakness in Crude Oil prices undermined demand for the commodity-linked currency - Loonie and provided a minor boost to the major. In fact, WTI Crude Oil prices added to last week's heavy losses - the biggest this year, and declined further amid concerns over any further deterioration in the US-China trade disputes and signs of a slowdown in the global economic growth. The uptick, however, lacked any strong conviction as investors now seemed reluctant to place any aggressive bets amid absent relevant fundamental catalyst and relatively thin liquidity conditions on the back of holidays in the UK and US.Technical levels to watch 

DXY daily chart Dollar Index Spot Overview Today last price 97.7 Today Daily Change 18 Today Daily Change % 0.10 Today daily open 97.6 Trends Daily SM

The greenback has managed to rebound from recent lows and is now looking to reclaim the critical 98.00 milestone.Immediate on the upside lines up the 10-day SMA at 97.81 ahead of more relevant hurdles beyond 98.00 the figure.Furthermore, the positive stance in DXY is seen unchanged while above the key 200-day SMA at 96.42. This area of contention is reinforced by the medium-term support line at 96.35.DXY daily chart  

EUR/JPY daily chart EUR/JPY Overview Today last price 122.55 Today Daily Change 31 Today Daily Change % 0.08 Today daily open 122.45 Trends Daily SMA2

The daily upside in EUR/JPY appears so far limited by the 10-day SMA in the 122.80 region.In the meantime, the cross continues to navigate the lower end of the recent range, unable to gather enough convincing traction to re-test 123.00 the figure and beyond, where emerges last week’s peaks.In the broader picture, a test of multi-month lows in the 122.00 neighbourhood remains well on the cards while below the resistance line at 125.67.EUR/JPY daily chart  

Reuters reports the latest comments from the Italian Deputy Prime Minister Matteo Salvini, with the key headlines found below. We must totally re-disc

Reuters reports the latest comments from the Italian Deputy Prime Minister Matteo Salvini, with the key headlines found below. We must totally re-discuss old and outdated EU fiscal rules. Believes European Commission will be friendlier towards Italy now. The key issue for Italians is cutting taxes. Wants Italy’s 2020 budget to be based on tax cuts. Wants to reduce public debt by boosting growth, seeks support from the EU commission. Have a mandate from Italians to review the EU limits loyalty to government was never in questions. If EU letter tells government to make cuts he will say no.

• Improving risk sentiment weighed on the JPY’s relative safe-haven status. • Bullish traders seemed rather unaffected by a subdued USD price action.

   •  Improving risk sentiment weighed on the JPY’s relative safe-haven status. 
   •  Bullish traders seemed rather unaffected by a subdued USD price action.
   •  Thin liquidity conditions warrant some caution for intraday traders.
The USD/JPY pair built on its steady intraday up-move and has now moved to fresh session tops, just above mid-109.00s. The pair stalled last week's sharp pullback from levels beyond mid-110.00s and regained some positive traction at the start of a new trading week, snapping three consecutive days of losing streak.  Improving global risk sentiment, as depicted by a positive sentiment around equity markets, weighed on the Japanese Yen's safe-haven status and turned out to be one of the key factors driving the pair higher. The uptick seemed rather unaffected by a mildly softer tone surrounding the US Dollar, which remained on the defensive in wake of growing bets for a Fed rate cut amid the view that the economy is losing momentum. Friday's weaker than expected US durable goods orders added to the data showing a sharp decelerating in the US manufacturing activity and fueled speculations that the Fed might consider cutting rates before the year-end.  Bullish traders also shrugged off uncertainty over a further escalation in trade tensions between the world's two largest economies, after the US President Donald Trump said that we are not ready to make a deal with China. Meanwhile, liquidity conditions remained thin in the wake of holidays in the UK and the US, warranting some caution for intraday traders and before placing any aggressive short-term bets.Technical levels to watch 

Headlines are crossing the wires from the Japanese Deputy Chief Cabinet Secretary Nishimura, as he talks about a potential US-China trade deal. Nishim

Headlines are crossing the wires from the Japanese Deputy Chief Cabinet Secretary Nishimura, as he talks about a potential US-China trade deal. Nishimura says that the Japanese PM Abe and the US President Trump did not agree to reach a trade deal in August. Meanwhile, the Chief Cabinet Secretary Suga said that he had not heard about a specific date for the US-Japan deal.

In the view of the analysts at ING, the Chinese Yuan is likely to appreciate by end-2019 amidst a technology war. Key Quotes: “We also believe that US

In the view of the analysts at ING, the Chinese Yuan is likely to appreciate by end-2019 amidst a technology war. Key Quotes: “We also believe that USD/CNY and USD/CNH will continue to stabilize, with gradual slight appreciation, so that the yuan market can shake off substantial pressure from investors betting on yuan depreciation.  Another reason for our call for an appreciating yuan is that when the yuan is stable the onshore asset market is also stablev- important during a technology war that can affect asset markets worldwide because of the interlinked global supply chain. Based on the above reasons, we believe that the yuan can appreciate back to the 6.75 level, a level seen back in the first week of May, by the end of 2Q19.”

The UK's opposition Labour Party's Finance Policy Chief McDonnell was on the wires earlier today, via Twitter, noting that his party must back a publ

The UK's opposition Labour Party's Finance Policy Chief McDonnell was on the wires earlier today, via Twitter, noting that his party must back a public vote on Brexit. Key Quotes: “Can’t hide from hit we took last night. Bringing people together when there’s such a divide was never going to be easy.”  “Now we face prospect of Brexiteer extremist as Tory (Conservative) leader and threat of no deal, we must unite our party and country by taking issue back to people in a public vote.”

• US-China trade tensions/subdued USD demand lend some support. • Slight improvement in risk sentiment kept a lid on any strong gains. Gold lacked an

   •  US-China trade tensions/subdued USD demand lend some support.
   •  Slight improvement in risk sentiment kept a lid on any strong gains.
Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the early European session on Monday. The precious metal struggled to capitalize on last week's goodish recovery move from multi-week lows and remained capped below the $1287-88 supply zone. A combination of diverging forces failed to provide any meaningful impetus and led to a subdued/range-bound price action at the start of a new trading week.  As the US President Donald Trump prepares to meet his Chinese counterpart Xi Jinping at the G-20 meeting next month, the precious metal was seen benefitting as a hedge against the recent escalation in the US-China trade tensions and prospects of a full-blown trade war between the world's two largest economies.  This coupled with a further US Dollar pullback amid growing bets for a Fed rate cut, further fueled by Friday's disappointing US durable goods orders and Trump's criticism over the weekend, provided a minor boost to the dollar-denominated commodity and remained supportive of the early uptick to over one-week tops. The supporting factors, to a larger extent, were largely offset by a slight improvement in the global risk sentiment, with relatively thin liquidity conditions in wake of a national holiday in the UK and the US, further collaborating towards capping any meaningful gains for the commodity. Technical levels to watch 

Following the comments from the US President Trump and his Japanese counterpart Abe, the Japanese Chief Cabinet Secretary Suga is on the wires now, vi

Following the comments from the US President Trump and his Japanese counterpart Abe, the Japanese Chief Cabinet Secretary Suga is on the wires now, via Reuters, noting that he has not heard specific date for the US-Japan Deal. Last hour, the US President Trump said that he hopes to announce more on the US-Japan trade very soon.japan  

The Westpac analysts believe that the Australian Bureau of Statistics (ABS) CAPEX survey of private business investment plans due on May, 30th, will p

The Westpac analysts believe that the Australian Bureau of Statistics (ABS) CAPEX survey of private business investment plans due on May, 30th,  will provide some further guidance on growth prospects. Key Quotes: “The March quarter update will be released on May 30, including the 6th estimate of capex plans for the 2018/19 financial year and the 2nd estimate of plans for 2019/20. Markets will focus on plans for 2019/20. Estimate 2 for 2019/20 may, on the face of it, appear to be quite positive (as did Est 1). However, we assess that Est 1 and Est 2 for 2019/20 are flattered by weak base effects (with Est 1 and Est 2 of a year ago relatively low compared to the likely outcome for 2018/19). A more appropriate approach, calculations based on average realization ratios (RRs), will paint a less upbeat picture. Also, we caution that estimates 1 and 2 can be an unreliable guide to actual spending - the degree of error varying from year to year. Plans begin to become more reliable when the outcome for the preceding year is known, that is from Est 3 on. Of interest will be the mix of investment plans by industry and by the asset. The focus will be on the service sectors, which are more likely to be impacted by shifts in business conditions.”

There is room for EUR/USD to move higher and visit the 1.1230 region in the short-term horizon, noted FX Strategists at UOB Group. Key Quotes 24-hour

There is room for EUR/USD to move higher and visit the 1.1230 region in the short-term horizon, noted FX Strategists at UOB Group.Key Quotes24-hour view: “We highlighted last Friday that the “rebound in EUR has scope to extend but 1.1210 is expected to offer solid resistance”. EUR subsequently touched 1.1212 during late-NY hours before ending the day on a strong note (NY close of 1.1202). The current short-term EUR strength appears to be running ahead of itself but is not showing sign of weakness just yet. From here, we see scope for a test of 1.1230 first before the current EUR strength should ease off (the next resistance at 1.1265 is not expected to come into the picture). Support is at 1.1180 followed by 1.1160”. Next 1-3 weeks: “We indicated last Friday (24 May) that the strong rebound ahead of the 1.1000 support suggests EUR may have found a short-term bottom at 1.1106 on Thursday (23 May). For now, we continue to hold the same view but if EUR were to close above the top of our expected sideway-trading range of 1.1130/1.1230, it would suggest the start of a stronger and more sustained recovery. The probability for such a move appears to be quite high as long as EUR can hold above 1.1260 within these 1 to 2 days”.

• The USD remains on the defensive amid growing bets for a Fed rate cut. • US-China trade tensions might keep a lid on any strong follow-through. The

   •  The USD remains on the defensive amid growing bets for a Fed rate cut.
   •  US-China trade tensions might keep a lid on any strong follow-through.
The AUD/USD pair traded with a mild positive bias at the start of a new trading week and is currently placed at near two-week tops, just below mid-0.6900s. The pair built on last week's goodish bounce from multi-month lows and the uptick was supported by a softer tone surrounding the US Dollar, which remained on the defensive amid growing bets for a Fed rate cut. The greenback retreated farther from two-year tops and continues to be weighed down by Friday's weaker than expected US durable goods orders data, which added to the view that the economy is losing momentum. The report came a day after the US data indicated that manufacturing activity in May dropped to the slowest pace in almost a decade and fueled speculations that the Fed might consider cutting rates before the year-end.  However, the recent escalation in the US-China trade tensions, which had been one of the key factors influencing sentiment surrounding the China-proxy Australian Dollar, might keep a lid on any runaway rally. Meanwhile, the US President Donald Trump's latest comments, saying that we are not ready to make a deal with China clearly suggested that the world's two largest economies are nowhere near to reach any trade pact. Hence, it would be prudent to wait for a strong follow-through buying before confirming that the pair might have actually bottomed out in the near-term or positioning for any further near-term recovery move. Technical levels to watch 

Axel Rudolph, Senior Technical Analyst at Commerzbank, sees the cross facing initial hurdle in the 123.24/75 region. Key Quotes “EUR/JPY continues to

Axel Rudolph, Senior Technical Analyst at Commerzbank, sees the cross facing initial hurdle in the 123.24/75 region.Key QuotesEUR/JPY continues to hold above its current May low at 122.08 and the 121.53 61.8% Fibonacci retracement. Below 121.53 would suggest another leg down to the 119.91 78.6% Fibonacci retracement”. “Resistance comes in at circa 123.24/75, at the downtrend line and the May 21 high. While rallies are capped by the 55 day ma at 124.68 attention remains on the downside”.

The sentiment around the shared currency stays mixed early in the European session, with EUR/USD orbiting without clear direction around the 1.1200 ha

EUR/USD alternates gains with losses around the 1.1200 handle.The greenback appears sidelined in the 97.50/60 band.ECB’s B.Coeure due to speak later in the day.The sentiment around the shared currency stays mixed early in the European session, with EUR/USD orbiting without clear direction around the 1.1200 handle.EUR/USD steady near 1.1200 post EU electionsThe selling pressure around the single currency looks alleviated at the beginning of the week, helped by the results from the EU parliamentary elections, where the populist/Eurosceptic option lost some traction. However, it is worth noting Marine Le Pen’s RN victory vs. President Emmanuel Macron’s REM. On another direction, US-China trade dispute remains the key catalyst for the price action around the global markets, all despite the lack of further/significant news in past days. There are no scheduled publications in the euro docket today, although ECB’s B.Coeure will speak at a BIS event in Basel.What to look for around EURRecent data releases in Euroland and Germany have poured cold water over the idea that some healing process could be underway in the region, re-shifting the focus to the ongoing slowdown and its probable duration and extension. This view has been reinforced in recent ECB minutes, where the Council appeared unconvinced about a pick up in the economic activity in the medium term horizon. That said, the current ‘neutral/dovish’ stance from the ECB is expected to persist for the remainder of the year and probable through H1 2020. The broad-based risk-appetite trends and USD-dynamics should dictate the sentiment surrounding the European currency for the time being, all in combination with the now stalled US-China negotiations and potential US tariffs on EU products. On the political front, Italian politics has re-emerged as a source of uncertainty and volatility with the main focus of attention on its fiscal struggle vs. Brussels.EUR/USD levels to watchAt the moment, the pair is gaining 0.02% at 1.1205 and a breakout of 1.1215 (high May 27) would target 1.1235 (55-day SMA) en route to 1.1264 (monthly high May 1). On the flip side, immediate support lines up at 1.1191 (21-day SMA) seconded by 1.1107 (2019 low May 23) and finally 1.0905 (high Mar.27 2017).

More comments flowing in from the US President Trump, as he sheds some lights on the US-China trade relations while talking about North Korean missile

More comments flowing in from the US President Trump, as he sheds some lights on the US-China trade relations while talking about North Korean missile tests. Not bothered by North Korea's launch of short range missiles. Satisfied with the direction on the North Korea situation. Kim understands that only 'bad' can happen with nukes. China probably wishes they didn't try to renegotiate the deal. He bets China wish they had made the deal earlier. Thinks will have a deal with China sometime in the future. Will have a deal with China, and another one with Japan. The US has an 'unbelievably' large imbalance with Japan on trade.

Alongside US President Trump, the Japanese PM Abe was also reported, as saying that he agrees with the US President to accelerate bilateral trade talk

Alongside US President Trump, the Japanese PM Abe was also reported, as saying that he agrees with the US President to accelerate bilateral trade talks. Abe said that Trump gave support to hold unconditional talks with North Korea.

Open interest in JPY futures markets shrunk by nearly 1.1K contracts on Friday, prolonging the erratic performance seen as of late. Same scenario arou

Open interest in JPY futures markets shrunk by nearly 1.1K contracts on Friday, prolonging the erratic performance seen as of late. Same scenario around volume, which ticked higher by around 38.5K contracts.USD/JPY now looks to 110.00The recent decline in USD/JPY appears to have met support near the key 109.00 handle. Declining open interest and volume should remove tailwinds from further JPY appreciation and could allow for another test of the 110.00 mark in the near term.

The US President Trump is on the wires now, via Reuters, addressing a joint press conference with the Japanese PM Shinzo Abe. Key Headlines: US-Japan

The US President Trump is on the wires now, via Reuters, addressing a joint press conference with the Japanese PM Shinzo Abe. Key Headlines: US-Japan alliance is a cornerstone of the region. Wants peace and stability in North Korea. Continue to hope that North Korea will proceed with denuclearisation. Working to improve economic relationship with Japan on basis of fairness. Trade talk goal is to reduce deficit, wants 'fair footing' in Japan. Hopes to announce more on trade very soon.

Reuters reports the recent comments from the UK opposition Labour Party leader Corbyn, as he backs the case for a general election or a second referen

Reuters reports the recent comments from the UK opposition Labour Party leader Corbyn, as he backs the case for a general election or a second referendum. Key Quotes: “With the Conservatives disintegrating and unable to govern, and parliament deadlocked, this issue will have to go back to the people, whether through a general election or a public vote.” “Over the coming days we will have conversations across our party and movement, and reflect on these results on both sides of the Brexit divide.”

CME Group’s flash data for GBP futures markets noted open interest advanced for yet another session, this time by around 3K contracts on Friday. In th

CME Group’s flash data for GBP futures markets noted open interest advanced for yet another session, this time by around 3K contracts on Friday. In the same direction, volume increased by around 10.7K contracts amidst the prevailing choppy activity.GBP/USD appears supported near 1.2600Cable has recently bottomed out in the 1.2600 neighbourhood and could now see some continuation of the rebound, all sustained by rising open interest and volume.

According to preliminary figures for EUR futures markets from CME Group, investors scaled back their open interest positions by around 4.7K contracts

According to preliminary figures for EUR futures markets from CME Group, investors scaled back their open interest positions by around 4.7K contracts on Friday, while volume shrunk by around 102.1K contracts.EUR/USD now targets the 55-day SMAEUR/USD continues to extend the recent rebound from yearly lows near 1.1100 the figure. However, declining open interest and volume should leave occasional attempts limited and facing the next resistance at the 1.1240 region, where sits the 55-day SMA.

FX option expiries for May 27 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1100 1.1bn - GBP/USD: GBP amounts 1

FX option expiries for May 27 NY cut at 10:00 Eastern Time, via DTCC, can be found below. - EUR/USD: EUR amounts 1.1100 1.1bn  - GBP/USD: GBP amounts 1.2600 259m - AUD/USD: AUD amounts 0.6930 659m

Mexico Current Account, $ (QoQ) down to $-5.634M in 1Q from previous $-3.424M

FX Strategists at UOB Group believe Cable could now attempt a consolidative theme. Key Quotes 24-hour view: “While we held the view last Friday that “

FX Strategists at UOB Group believe Cable could now attempt a consolidative theme.Key Quotes24-hour view: “While we held the view last Friday that “a short-term bottom is in place”, we expected GBP to “trade sideways”. However, GBP staged a strong advance and hit a high of 1.3734. Despite the relatively strong gain, there is no marked improvement in momentum and while GBP could edge higher from here, a sustained rise is not expected. In other words, GBP is expected to trade sideways to slightly higher, likely holding within a 1.2700/1.2755 range”. Next 1-3 weeks: “After GBP bounced from 1.2605, we indicated on Friday (24 May) that the beckoning call of 1.2600 has “softened”. The subsequent strong recovery in GBP during last Friday’s London session touched 1.2734. While the high is still below our 1.2760 ‘key resistance’, the price action suggests that GBP has made a short-term bottom at 1.2605. In other words, GBP is expected to trade above 1.2605 for the next 1 to 2 weeks. That said, it is too soon to expect a sustained rebound. From here, GBP is deemed to have moved into a ‘sideway-trading phase’ and is expected to trade between 1.2640 and 1.2850. Looking ahead, only a move above 1.2950 would indicate that 1.2605 is a more significant bottom than currently expected”.

Denmark Retail Sales (YoY) rose from previous 0.5% to 3.2% in April

The recent rebound from the 1.1110 area could extend further and test the 55-day SMA near 1.1240, according to Senior Technical Analyst at Commerzbank

The recent rebound from the 1.1110 area could extend further and test the 55-day SMA near 1.1240, according to Senior Technical Analyst at Commerzbank Axel Rudolph.Key QuotesEUR/USD’s bounce off the April low at 1.1110 nears the 55 day moving average at 1.1237. We need to overcome the 55 day moving average in order to alleviate downside pressure”. “Be advised that as long as the recent lows at 1.1110/06 hold the pattern being traced out is a potential large bullish reversal pattern”. “Overhead lie the 55- and 100-day moving averages at 1.1237 and 1.1295 as well as the September-to-May resistance line at 1.1310. Further up meanders the 200 day moving average at 1.1387”.

Thomas Harr, PhD, Global Head of FI&C Research, Danske Bank, offers his thoughts on the global slowdown and its likely impact on the financial markets

Thomas Harr, PhD, Global Head of FI&C Research, Danske Bank, offers his thoughts on the global slowdown and its likely impact on the financial markets, in its latest research report. Key Quotes: “For some time I have held the view that the USD will do well due to carry and US outperformance. The trade war itself should be US dollar-positive, but if at some point it triggers a response from the Fed, I believe USD strength will be over, particularly versus cyclical, risk-sensitive currencies such as the NOK, AUD and NZD. The markets are pricing central banks very dovishly and inflation expectations in the US and the Eurozone are at very depressed levels. I view the current dovish pricing of the central banks and inflation expectations as fair given the weakening global outlook and downside risks. I expect US and core-euro interest rates to remain at current low levels for the time being, with the risk tilted to the downside for US rates. Finally, I expect global equity markets to head lower given the weakening global outlook. “

In spite of trading at the highest levels in a week, GBP/USD upside is being challenged by overbought RSI and 200-hour SMA around 1.2745/50 while head

EU election results propel prices on the UK holiday.Overbought RSI and near-term resistance-line can question upside.In spite of trading at the highest levels in a week, GBP/USD upside is being challenged by overbought RSI and 200-hour SMA around 1.2745/50 while heading into the European open on Monday. As a result, chances of the quote’s pullback to 1.2730 and then to 1.2710 including 23.6% Fibonacci retracement of pair’s declines past-May 10 can’t be ruled out. During the pair’s addition declines under 1.2710, 1.2650, 1.2625 and 1.2600 might become bears’ favorites. On the contrary, ignorance of 200-hour simple moving average (SMA) and overbought levels of the relative strength index (RSI) can escalate the pair’s rise to 1.2760 and last week’s high near 1.2815. Further, pair’s sustained rise beyond 1.2815 can push buyers to target 50% Fibonacci retracement level of 1.2830 ahead of making them confront 61.8% Fibonacci retracement of 1.2880 and 1.2905 resistances.GBP/USD hourly chartTrend: Pullback expected  

The analysts at Australia and New Zealand (ANZ) banking group offer a list of key event risks due on the cards in the week ahead from the New Zealand

The analysts at Australia and New Zealand (ANZ) banking group offer a list of key event risks due on the cards in the week ahead from the New Zealand docket. Key Quotes: “RBNZ Financial Stability Report – May (Wednesday 29 May, 9:00am). We think the RBNZ will prefer to wait and continue to assess the effects of the January easing in LVR restrictions for now, although a further small tweak can’t be ruled out. ANZ Business Outlook – May (Wednesday 29 May, 1:00pm). Building Consents – April (Thursday 30 May, 10:45am). Consents have shown strength recently. We expect consents to hold at a high level. NZ Budget (Thursday 30 May, 2:00pm). The Treasury’s forecasts are expected to show the Government meeting its Budget Responsibility Rules. ANZ Roy Morgan Consumer Confidence – May (Friday 31 May, 10:00am). RBNZ Sector Lending – April (Friday 31 May, 3:00pm). Private sector credit growth has gained a little momentum in recent months, but further upside appears limited.”

Failure to clear important resistance confluence portrays, the USD/JPY pair's weakness ahead of Europe open on Monday.

Sustained trading under important resistance portrays pair’s weakness.Sellers can target near-term horizontal support during downside.The USD/JPY pair is on the bids near 109.50 ahead of Europe open on Monday. The 110.55/60 resistance-confluence including 100-day simple moving average (SMA) and 23.6% Fibonacci retracement of January to April rise acts as strong upside cap. Though, 109.80 and 110.30 could entertain buyers during intermediate increase. Should prices rally past-110.60, 111.00, 111.80 and April month top near 112.40 could be on the bulls’ radar. Alternatively, multiple lows have been limiting the pair’s downside around 109.20/15 since the year’s start, which if ignored could rely on oversold levels of 14-day relative strength index (RSI) to visit 50% Fibonacci retracement near 108.60. Given the pair’s extended south-run under 108.60, 108.00 and 107.50 becomes important to watch.USD/JPY daily chartTrend: Pullback expected 

Measured by the US Dollar Index (DXY), the greenback is looking for direction in the lower bound of the range near 97.60. US Dollar Index flat, looks

The index consolidates around 97.60 amidst low volatility.US markets will be closed today due to Memorial day holiday.US GDP, PCE, Personal Income/Spending next of relevance this week.Measured by the US Dollar Index (DXY), the greenback is looking for direction in the lower bound of the range near 97.60.US Dollar Index flat, looks to trade, dataPoor prints in the US docket during the second half of last week added downside pressure to the buck following fresh 2019 highs in the boundaries of 98.40 and lent extra oxygen to the riskier assets. In the meantime, the lack of fresh news around the US-China trade war could prompt investors to look for catalyst on the other side of the Atlantic in the wake of the EU parliamentary elections. There will be no activity in the US calendar today due to the Memorial day holiday, while key data releases are coming later in the week: another revision of Q1 GDP, inflation tracked by the PCE, Personal Income/Spending, U-Mich index and Fedspeak.What to look for around USDRecent poor prints in the US calendar triggered new concerns over the likeliness of a technical recession in the US economy in the next months and somewhat spooked USD-bulls. Additionally, US-China trade negotiations remain mired in the mud for the time being, while investors’ focus has now shifted to the probable intervention in the Yuan by the Chinese government. On another direction, the FOMC minutes reinforced the ‘patient’ stance from the Federal Reserve and the ‘transitory’ lack of upside momentum in domestic inflation. In addition, the Committee ruled out rate cuts in the next months and left the door open for extra tightening if the economy evolves as planned. The positive outlook on the buck, in the meantime, stays unchanged and sustained by overseas weakness, its safe haven appeal, favourable yield spreads vs. the Fed’s G10 peers and the status of global reserve currency.US Dollar Index relevant levelsAt the moment, the pair is retreating 0.03% at 97.58 and a break below 97.55 (low May 27) would open the door for 97.27 (55-day SMA) and then 97.03 (low May 13). On the other hand, the next resistance emerges at 98.37 (2019 high May 23) seconded by 98.97 (78.6% Fibo of the 2017-2018 drop) and finally 99.89 (monthly high May 11 2017).

Livesquawk reports the latest comments from New Zealand (NZ) Finance Minister Robertson, as he says that the government will review the budget rules b

Livesquawk reports the latest comments from New Zealand (NZ) Finance Minister Robertson, as he says that the government will review the budget rules before the 2020 election. Meanwhile, the NZ Prime Minister Arden was also reported as saying that the Budget responsibility rules remain in place.   Their comments come ahead of the May 30 budget speech.

Japan Coincident Index below forecasts (99.6) in March: Actual (99.4)

Japan Leading Economic Index below expectations (96.3) in March: Actual (95.9)

With the pessimism surrounding global trade developments and greenback weakness joining EU election results, Gold prices are on the bids near $1287.30.

EU election results question present policymakers, fuels the bullion.Holidays at the leading bourses may confine further upside.With the pessimism surrounding global trade developments and greenback weakness joining EU election results, Gold prices are on the bids near $1287.30 while heading into the European session on Monday. Despite Fed policymakers’ neutral bias, the US Dollar (USD) has recently been on a back foot as soft data at home and lack of positives from trade relations with China dragged the greenback down. While USD weakness favors the yellow metal, victory of eurosceptic parties in the EU parliament election and Brexit party at the UK further added strength into the buying sentiment. However, buyers are likely to be challenged as markets in the UK and the US are closed for the day. As a result, positive closing by the global risk barometer, the US 10-year treasury yields, may gain less attention doing forward. Elsewhere, the US President Donald Trump is in Japan but no important news concerning both the country’s trade relations have been conveyed. Further, Chinese lawmakers continue conveying their disappointment from the Trump administration while the dragon nation’s banking and insurance regulator indicated losses for the Yuan bears.Technical AnalysisNot only multiple highs marked since mid-April but 50-day simple moving average (SMA) also highlights the importance of $1289/90 resistance area, a break of which can escalate the up-moves towards 100-day SMA level of $1297. On the flipside, $1279 and a nine-month-old ascending trend-line at $1276 could become strong support, a break of which can recall $1270 and $1266 back to the chart.

The GBP/USD pair is seen consolidating the overnight surge to 1.2755 levels, as the recovery mode remains intact on the 1.27 handle heading into quiet

Cautious trading expected amid softer USD, Brexit anxiety as Johnson set to replace PM May.UK political news to grab some attention amid the UK, US holiday.The GBP/USD pair is seen consolidating the overnight surge to 1.2755 levels, as the recovery mode remains intact on the 1.27 handle heading into quiet European trading ahead. The UK markets are closed today in observance of Spring Bank holiday.Upside seems limited amid Brexit chaosThe ongoing recovery in the spot received a further boost after the pound cheered the early news that the Brexit Party received the highest number of votes in the European Union (EU) elections. The pair regained momentum on Friday after the UK PM May announced her resignation on June 7th and markets adopted the “Buy the fact” trading strategy. Further, broad USD weakness amid a recent slew of weak US fundamentals and liquidation ahead of the long weekend in the US added to the Cable recovery from four-month lows of 1.2605 reached last Thursday. Despite the renewed upside, markets remain wary amid ongoing UK leadership challenges, with the Brexit hard-liner Boris Johnson likely to be the next successor. Johnson’s hard Brexit stance is likely to keep the GBP traders on the edge that could keep a check on the corrective upside. In the day ahead, the pair will remain at the mercy of the risk trends and USD dynamics amid holiday-thinned volumes and lack of fresh catalysts while Brexit and trade-related headlines will continue to remain the main market drivers.GBP/USD Technical Levels 

EUR/USD is trading at 1.1214 at press time – the highest level since May 16 – despite the Eurosceptic parties gaining ground in the European Union (EU

EUR/USD hits 11-day high at press time, could rise further in Europe.The rise of populist parties in the recently concluded EU elections is not necessarily an EUR-bearish development. EUR/USD daily chart is reporting short-term bullish reversal.EUR/USD is trading at 1.1214 at press time – the highest level since May 16 – despite the Eurosceptic parties gaining ground in the European Union (EU) elections, which concluded on Sunday.  Provisional results on Sunday showed the traditional center-left and center-right political parties fell short of a majority for the first time, while the Eurosceptics, Greens, Liberals including far-right parties in countries such as France and Italy made gains. While the Far Right’s gains suggest the bloc may continue to struggle with populism in coming years, it may not turn out bad for the common currency.  As BK Asset Management’s Kathy Lien states, “Populism is going strong and it hasn't been a crushing blow for many currencies. Just take Just take a look at the US and Australia - protectionist policies helped rather than hurt the greenback while the Australian dollar surged after the surprise victory by Prime Minister Morrison The EUR, therefore, may remain bid in Europe – more so, as the Chinese Yuan is gaining ground as of writing.  Also, technicals support a rise to 1.1232 (trendline connecting April 17 and May 13 highs). The shared currency’s close at 1.1204 on Friday validated or confirmed the bearish-to-bullish trend change signaled by Thursday’s long-tailed bullish engulfing candle.  That said, trading volumes will be thin on account of holidays in the UK and US. As a result, gains seen today may not be sustainable. Pivot levels 

Pullbacks from $59.00 portray WTI weakness that drags the energy benchmark to $58.50 ahead of European open on Monday.

U-turn from 50% Fibonacci retracement highlights horizontal support-line.RSI conditions may question additional declines.Pullbacks from $59.00 portray WTI weakness that drags the energy benchmark to $58.50 ahead of European open on Monday. If oversold levels of 14-bar relative strength index (RSI) are ignored, prices can well slip under $57.80 horizontal-line that connects February and March month high to recent lows. In doing so, 61.8% Fibonacci retracement of February to April month upside, at $57.00, can offer an intermediate halt during the quote’s drop to $55.60 and $55.00. Alternatively, sustained break of 50% Fibonacci retracement of $59.00 can trigger the black gold’s uptick towards breaking $60.00 round-figure and aim for 38.2% Fibonacci retracement near $60.76. In a case where prices rally beyond $60.76, $62.40 and a month old descending trend-line near $63.30 may as well flash on buyers’ radar.WTI 4-Hour chartTrend: Bearish 

The North Korean state media KCNA published a statement from the North’s Foreign Ministry, with the key headlines found below. “US National Security A

The North Korean state media KCNA published a statement from the North’s Foreign Ministry, with the key headlines found below. “US National Security Adviser Bolton is a war fanatic.” “Bolton is wrong about NK's tests violating UN resolutions.” “Giving up tests would mean giving up the right to self-defense.” On Sunday, the White House Press Secretary Sarah Sanders said the US President Donald Trump and North Korea’s leader Kim Jong Un agree on their assessment of Democratic presidential candidate Joe Biden.

Greek Prime Minister and Syriza leader Alexis Tsipras has reportedly said that after the second round of the elections for the local administration on

Greek Prime Minister and Syriza leader Alexis Tsipras has reportedly said that after the second round of the elections for the local administration on Sunday 2, he will meet with President Prokopios Pavlopoulos and ask for the dissolution of parliament and national elections, probably on June 30, according to Tornos News.  Syriza, in power since 2015, suffered a heavy defeat on Sunday in the European Parliamentary elections, falling behind the main opposition New Democracy party by about nine points.

Despite being on the bids around 122.75 during early Monday, the EUR/JPY pair is likely finding hard to extend the latest advances.

Near-term trend-line confluence can limit the upside.Adjacent support-line may question declines.Despite being on the bids around 122.75 during early Monday, the EUR/JPY pair is likely finding hard to extend the latest advances. The reason being 122.85 resistance-confluence that comprises of near-term descending and horizontal trend-lines. Should there be additional upside past-122.85, pair’s rise to 61.8% Fibonacci retracement level near 123.15 can’t be denied. If at all bulls continue dominating trade sentiment above 123.15, 123.55 and the latest high near 123.75 could be of importance to watch. Meanwhile, 122.60 and immediate upward sloping trend-line at 122.40 may limit the quote’s nearby declines. In a case where prices slip under 122.40, 122.25 and 122.00 might come back on the chart.EUR/JPY hourly chartTrend: Bearish 

At press time, Japan’s Nikkei is reporting 0.14% gains and Australia’s S&P/ASX 200 is trading largely unchanged on the day. The Shanghai Composite ind

China’s officials warned speculators against shorting Yuan. Asian stocks are trading mixed this Monday morning as Yuan gained after China warned against shorting the currency. At press time, Japan’s Nikkei is reporting 0.14% gains and Australia’s S&P/ASX 200 is trading largely unchanged on the day.  The Shanghai Composite index, however, is down 0.40% on the day and Hong Kong’s Hang Seng has shed a 0.88% loss. The mixed action comes after the European elections ended with the populist and anti-EU political parties gaining ground. Notably, UK’s Brexit party dominated Tories and Labour. Also, so far, strength in China’s Yuan has not boosted risk appetite. As noted earlier, the stocks in China are flashing red even though the offshore Chinese Yuan (CNH)rose to a 12—day high of 6.8973 earlier today.  The rise in CNH could be associated with the warning by China’s senior-most economic official that speculators “shorting the yuan will inevitably suffer from a huge loss.” USD/CNH rose to 6.95 earlier this month, triggering fears that the psychological level of 7.00 could be breached soon, courtesy of trading tensions.   

Reuters reports the recent comments delivered by the Bank of Japan (BOJ) Governor Kuroda at the T20 Summit. Kuroda delivered a speech titled “Global E

Reuters reports the recent comments delivered by the Bank of Japan (BOJ) Governor Kuroda at the T20 Summit. Kuroda delivered a speech titled “Global Economy: Challenges and Policy Responses”.Key Points:“Uncertainties remain high for the global economy.” “G20 will intensively discuss global imbalances.” He did not touch upon the topic of monetary policy.

The Standard Chartered analysts offer their outlook on the USD/JPY pair, in the event of a full-blown US-China trade war. Key Quotes: “See a full out

The Standard Chartered analysts offer their outlook on the USD/JPY pair, in the event of a full-blown US-China trade war. Key Quotes: “See a full out trade war as the US applying 25% tariffs on remaining Chinese goods and then countermeasures from China. Haven currencies should benefit. Thus a rapidly higher USD, but also Yen. USD/JPY seen lower towards 100.” However, a 'cold deal' with wariness persisting on both sides) between the US and China in the third quarter. This will halt tariff escalations.” 

The US investment banking, Goldman Sachs, expressed its take on the tightening US financial conditions, in its latest client note. Key Quotes: “Financ

The US investment banking, Goldman Sachs, expressed its take on the tightening US financial conditions, in its latest client note.Key Quotes:“Financial conditions have tightened following President Trump's tweets. Largely driven by lower equity prices.”

The US President Donald Trump, on the third day of his state visit to Japan, said that he intends to discuss the matter of auto tariffs with Japan. Th

The US President Donald Trump, on the third day of his state visit to Japan, said that he intends to discuss the matter of auto tariffs with Japan.  The state visit comes amid tensions with carmaker Toyota over potential auto tariffs.  Earlier this month, Trump postponed a decision on auto tariffs for up to six months but made clear that he views car imports as a potential threat to US national security.

The US President Donald Trump on Monday said both the US and Japan will work out trade imbalances over time and may announce something on trade in Aug

The US President Donald Trump on Monday said both the US and Japan will work out trade imbalances over time and may announce something on trade in August.  Trump kicked off his state visit to Japan on Saturday by urging Japanese business leaders to increase investment in the US.Key quotes"We shall get the balance of straightened out rapidly." "Good things will come with North Korea. There has been no rocket or nuclear testing."

NZD/USD closed at 0.6550 on Friday, confirming an upside break of the trendline connecting March 26 and April 17 high. Also, a close at 0.6550 validat

NZD/USD’s close at 0.6550 activated twin bullish cues. The daily chart looks constructive for a break above 0.6580. NZD/USD closed at 0.6550 on Friday, confirming an upside break of the trendline connecting March 26 and April 17 high. Also, a close at 0.6550 validated Thursday’s bullish outside day candle.  That coupled with the moving average convergence divergence (MACD) histogram’s bullish turn indicates scope for a rise above the immediate resistance of 0.6580 (April 25 low).  As of now, the pair is trading at 0.6553, having hit a high of 0.6559 – a level last seen on May 16.  The bullish setup would be invalidated if the spot closes today below 0.6512 (Friday’s low).  Daily chartTrend: BullishPivot points   

In an interview with Bloomberg, Huawei Technologies' founder and Chief Executive Ren Zhengfei noted that he would oppose any retaliation by China agai

In an interview with Bloomberg, Huawei Technologies' founder and Chief Executive Ren Zhengfei noted that he would oppose any retaliation by China against Apple Inc, the iPhone maker. When asked about calls from some in China to retaliate against Apple, Ren said that he would “protest” against any such step if it were to be taken by Beijing. Ren added, “that (Chinese retaliation against Apple) will not happen first of all and second of all, if that happens, I’ll be the first to protest,”  However, Ren conceded that export curbs from the administration of US President Donald Trump will cut into a two-year lead built by Huawei over its competitors, as cited by Reuters.

EUR/USD has soaked up the European elections ahead of a U.K. and U.S. holiday making for a likely quiet Monday all around. Just taking a quick glance

EUR/USD is steady in the open this week so far, consolidating the rally to 1.12 handle.EUR/USD currently trades at 1.1210, between 1.1203/11. EUR/USD has soaked up the European elections ahead of a U.K. and U.S. holiday making for a likely quiet Monday all around. Just taking a quick glance at the positioning data for the week ending 21 May 2019, funds were buyers of EUR but asset managers were sellers. Looking ahead, US-China trade developments, Fedspeak, US stock and Treasury yield movements will be key drivers of USD positioning where funds have pared their net USD longs while asset managers reduced their net USD shorts. There were no particular highlights from the weekend news, although there was an antagonist with respect to the Sino/US trade standoff which could keep a lid on risk appetite in the immediate future whereby China sees the US calling on China to limit the development of its state-owned enterprises as an "invasion" on its economic sovereignty. European elections Robert Carnell, Chief Economist Head of Research, Asia-Pacific, summarised as follows: This was not a ringing endorsement for Euroscepticism - with only 22% of the seats going to EU sceptical parties, and even this bolstered by what may be a temporary surge in the UK's Brexit party seats, the EU parliament remains a largely pro-European institution. The Coalition of EPP (European People's Party) and S&D (Socialist and Democrat) has faltered, with both parties losing seats. Likely coalitions are probably with the ALDE (Liberals and Democrats, included Macron's En Marche) or Greens. In fact, talking of the Greens, the environment seems to have done well out of the vote, with the Greens picking up seats. May help their chances of acting as Kingmakers...?  The Brexit party did very well in the UK -  suggests the next Conservative leader will need to be very "Brexity" (though that may spur a vote of no-confidence and an election) In Greece, Syriza called an election, after they came second to conservatives in the election. In Italy, Lega did well, but not quite well enough to oust Five-Star from the government and have a go at running on their own. Lega leader, Matteo Salvini, says nothing will change...but watch this space...Salvini does, however, want to change the EU's fiscal rules and is looking for allies to support his cause. The results don't offer much insight into who will lead the EU Commission. The EPP's candidate, Manfred Weber may still get the nod, despite his party's losses, in which case, you can more or less rule out Jens Weidmann as the next ECB President. But nothing is clear at this stage. EUR/USD levelsValeria Bednarik, The Chief Analyst at FXStreet, explained that from a technical point of view, the pair settled around the 61.8% retracement of its latest bearish move: "In the daily chart, the potential upward seems limited, as, despite the pair settled above its 20 SMA, it continues developing far below the 100 and 200 SMA, both far above the current level and maintaining their bearish slopes. Technical indicators in the mentioned chart aim modestly higher, currently in neutral levels just around their midlines. Shorter term, and according to the 4 hours chart, the technical picture is quite alike, as the pair settled above its 20 and 100 SMA but was rejected by sellers aligned around the 200 SMA, while technical indicators hold within positive levels, but having already lost their positive momentum."

Given the technical reasons joining soft prints of China’s industrial profits, AUD/USD struggles around 0.6935/40 resistance-confluence during early Monday.

Weak data from Australia’s largest customer and overbought RSI levels signal another pullback from important resistance.Multiple supports at the downside might challenge sellers.Given the technical reasons joining soft prints of China’s industrial profits, AUD/USD struggles around 0.6935/40 resistance-confluence during early Asian session this Monday. Considering both the fundamentals and technical signals indicating pair’s another pullback from important resistance, 0.6900 and 0.6880 regains market attention. Though, pair’s decline past-0.6880 can be challenged by 0.6860 if not then 2016 bottom near 0.6830 could play its role of support. It should be noted that 14-bar relative strength index (RSI) is near to overbought region and indicates brighter chances of the quote’s pullback. On the contrary, sustained break of 0.6935/40 region comprising a descending trend-line stretched from April 30 and a horizontal territory limiting the pair’s upside since mid-May can propel prices to 0.6970 and 0.7000 round-figure. Also, pair’s extended rise past-0.7000 might not refrain from questioning 0.7030 and 0.7070 numbers to the north.AUD/USD 4-Hour chartTrend: Pullback expected  

The latest data published by China’s National Bureau of Statistics (NBS) showed that profits earnt by China’s industrial firms in April fell 3.7 y/y,

The latest data published by China’s National Bureau of Statistics (NBS) showed that profits earnt by China’s industrial firms in April fell 3.7 y/y, down from a 13.9% surge seen in March. In March, the industrial profits rebounded from four months of contraction. That marked the biggest monthly increase since July 2018. For the YTD (I.e. January to April), down 3.4% y/y. The NBS said in a statement accompanying the data: “The drop in industrial profits last month due to the VAT cut.

The US has called on China to limit the development of the state owned enterprises, but the world’s second largest economy sees the demand made by the

The US has called on China to limit the development of the state owned enterprises, but the world’s second largest economy sees the demand made by the US as an invasion on the economic sovereignty, according to Xinhua News Agency. Key quote At the negotiating table, the U.S. government presented a number of arrogant demands to China, including restricting the development of state-owned enterprises.

There is no need for the European Central Bank (ECB) to change its policy at present, even though there are signs of weakness in the Eurozone economy,

There is no need for the European Central Bank (ECB) to change its policy at present, even though there are signs of weakness in the Eurozone economy,  the ECB policymaker and presidential hopeful Jens Weidmann said on Sunday, according to Reuters.Key quotes”This isn’t a situation where prices are falling and we have to react now.”  “Decreasing spare capacity in the economy, namely the extent to which labour, capital and other resources are used below their maximum level, would eventually push up prices.”

With the broad US Dollar (USD) weakness joining WTI pullback, the USD/CAD pair is nearly unchanged at 1.3440 during early Monday.

Global trade pessimism confronts USD pullback.News reports to gain major attention amid short economic data line.With the broad US Dollar (USD) weakness joining WTI pullback, the USD/CAD pair is nearly unchanged at 1.3440 during early Monday. With the latest data from the US economy have been on a soft side, the greenback recently failed to extend its previous upside. On the other hand, WTI’s U-turn from the 100-day simple moving average (SMA) is also failing to sustain questions about global economic growth and looming concerns for the US-China trade deal drags the energy benchmark down. Looking forward, the global economic calendar has nothing major to entertain momentum traders, which in turn highlights the importance of qualitative catalysts like news reports concerning global trade and developments between the US and Iran. Crude is Canada’s largest export-item and hence has a larger impact on USD/CAD.Technical AnalysisOnly if the quote slides beneath 50-day SMA level of 1.3400, it can decline towards 1.3360 and 100-day SMA level near 1.3330 else chances of its extended run up to clearing a month old downward sloping trend-line, at 1.3510 now, and then to 1.3570 can’t be ruled out.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.8924 vs Friday's fix of 6.8993.

The People's Bank of China (PBOC) has set the yuan reference rate at 6.8924 vs Friday's fix of 6.8993.

USD/JPY is reporting modest gains this Monday morning in Asia, having registered losses in the previous three trading days. The spot is currently trad

USD/JPY is flashing green amid reports of eurosceptic parties gaining ground in EU elections. The pair suffered losses in the previous three trading days, possibly due to slide in Treasury yields. USD/JPY is reporting modest gains this Monday morning in Asia, having registered losses in the previous three trading days.  The spot is currently trading at 109.50, up 0.20% on the day amid reports that an alliance of pro-EU parties largely held their ground in Sunday’s European elections. However, a high voter turnout delivered big gains to liberals, Greens and far-right populists.  For instance, in France, President Macro’s party has been bested by Marine Le Pen's far-right National Rally, according to Politico. Further, UK’s Brexit party have come out victorious, while the ruling Conservative Party has been wiped out.  Far right’s gains suggest the bloc will likely continue to struggle with the populist insurgency for years to come.  The European equities, therefore, my struggle to put on a good show later today, limiting the upside in USD/JPY. The currency pair fell 0.30% to 109.38 on Friday, marking a third consecutive day of losses and the first three-day losing streak since May 9.  The losing run was likely the result of the escalating trade tensions and the resulting haven demand for both treasuries and the Japanese Yen. Notably, the 10-year yield fell to 2.29% last Thursday, the lowest level since October 2017.  The treasury market is observing a trading holiday today. Further, the UK markets are closed today. Thus, liquidity in the FX markets will be thin and any gains in USD/JPY need to be viewed with caution. Pivot points 

Extending its gradual downturn since middle of last week, USD/CNH trades near 6.91 at the initial Monday.

Oversold RSI and immediate trend-line support can trigger the pair’s pullback.Adjacent resistance-line can restrict upside momentum.Extending its gradual downturn since middle of last week, USD/CNH trades near 6.91 at the initial Monday. Near to the quote is 10-day long descending support-line, at 6.9085, that has been questioning sellers together with oversold levels of the 14-bar relative strength index (RSI). If bears refrain from respecting immediate trend-line support, 38.2% Fibonacci retracement of recent upside at 6.8966 and 50% Fibonacci retracement near 6.8794 can appear on their radar. Meanwhile, 6.92 and the closest descending trend-line near 6.9243 may limit pair’s immediate upside ahead of aiming 6.9350. Also, the pair’s sustained rise past-6.9350 enables the buyers to target recent high near 6.9490.USD/CNH hourly chartTrend: Pullback expected 

Reuters reported that the environment minister Michael Gove, who is running to succeed Theresa May as prime minister, said on Sunday that Britain coul

Reuters reported that the environment minister Michael Gove, who is running to succeed Theresa May as prime minister, said on Sunday that Britain could survive a no-deal Brexit but it would be better to leave the European Union with an agreement, In an interview with the BBC’s Nick Robinson at the Hay Festival, Gove said he would be setting out more details on his plan for Brexit at his official campaign launch. Several other candidates said on Sunday that Britain should leave on Oct. 31, with or without a deal. “In government and in this job I have got to grips with preparing for a no-deal, it is a possible outcome ... We would be able to get through it but it is ultimately better for all of us if we secure a deal and leave in an orderly way,” Gove said.
 

Despite recovering a portion of Thursday's losses, oil prices saw their worst weekly performance of the year. Spot prices in WTI embarked on the 59 ha

WTI has stalled at that  61.8% Fibo level around 57.30.Trade war noise a key driver.Despite recovering a portion of Thursday's losses, oil prices saw their worst weekly performance of the year. Spot prices in WTI embarked on the 59 handle with stock markets dictating price action on Friday following a rebound in risk appetite on the back of noise that Trump may ease up on restrictions against Huawei Technologies Inc. as part of a bigger trade deal with China. Meanwhile, the domestic supply story in the US has increasingly diverged, with inventories continuing to grow sharply, particularly as refinery outages have kept crude intake low despite high crack spreads, analysts at TD Securities explained. "This has continued to strengthen our view for a widening in Brent-WTI, which has blown out beyond $10/bbl for the first time since June 2018, but we note that these refinery outages are likely to subside given the high incentive prices held by refineries."WTI levelsWTI has stalled at that  61.8% Fibo level around 57.30 following a collapse below the 50/200 DMA cross-over coinciding with the 23.6% Fibo, late Dec-late April range, and ascending channel support. However, on a continuation of the downside, 54.50 and the 50% retracement of 2019 range come in next ahead of the 200-W MA down at 52.40 and then the 38.2% Fibo and Feb lows at 52.50/51.40 respectively. On the upside, and on a break above 59, then through 60.40, as the 50% mean reversion of the 20th May weekly stick's range, opening 60.80, the 17th May low of 62.51 and 26th Aprils lows at 62.26 will be a focus. 

News reports from China’s Xinhua, based on a new report on China's auto industry, said that automobile sales in China will unchanged in 2019.

News reports from China’s Xinhua, based on a new report on China's auto industry, said that automobile sales in China will be around 28.1 million units this year, flat from the 2018 level. Sales of passenger vehicles will be about 23.7 million units while that of new energy vehicles (NEV) may rise to 1.6 million units from 1.26 million units in 2018, an increase of about 27%, the report further said. Additionally, China had stayed the world's largest auto market for 10 consecutive years and accounted nearly 30.6% of the global auto sales during last year, as per the news report.

With Trump's trade war taking a toll on US corporate Capex plans, investors have woken up to corporate balance sheet risks, Morgan Stanley analysts ha

With Trump's trade war taking a toll on US corporate Capex plans, investors have woken up to corporate balance sheet risks, Morgan Stanley analysts have mentioned in their latest note.  Key points US import tariffs are mainly paid for by US companies, depressing their profit margins. Hence, it should not be surprising to see US capex plans being cut radically, which should soon translate into moderating labour market conditions.  Financial conditions look set to tighten imminently as warning signals have been flashing intensively. Replace Australia's highly indebted household sector with ambitiously leveraged US corporates and we would find two economies with great similarities, especially in the case of their foreign funding dependency. The AUD trade weighted index (TWI) has lost 24% from its 2013 top while the USD TWI has gained 37% from its 2011 low. 

With the results of EU parliament elections start rolling out, the EUR/GBP pair is taking the bids near 0.8810 in the initial hours of the Monday.

Rise of Brexit party adds uncertainty into the already lagging Brexit process.EU can withstand the rise of eurosceptics till Germany holds the gate.With the results of EU parliament elections start rolling out, the EUR/GBP pair is taking the bids near 0.8810 in the initial hours of the Asian session on Monday. At the EU, the rise of Euroskeptics was questioned as ruling parties’ loss at Greece and Italy confronts status quo at Germany. On the other hand, Nigel Farage’s six-week-old Brexit party gains an upper hand at the UK while ruling Tories are likely to getting the last seat to watch due to their perceived failure to handle Brexit. While no major change is likely to take place at the EU’s political system, the UK might have to suffer if Brexit party comes into power as it favors clear distance from the EU and stands ready to raise questions on previous Brexit handling. The British Pound (GBP) recently gained after the PM Theresa May announced her resignation for June 06 with ex-Foreign Minister Boris Johnson likely leading the race of Tory candidates to replace Mrs. May.Technical AnalysisEven if overbought levels of 14-day relative strength index (RSI) signal pullback, 200-day simple moving average (SMA) at 0.8790 may question the pair’s immediate declines, if not then 0.8760 and March month high around 0.8725 may flash on the bears’ screens. Alternatively, a successful break of the latest high surrounding 0.8855 can propel the quote further up towards December 25 bottom near 0.8900.

Gold prices were supported on the 20-D EMA as bulls line up for a test towards the channel resistance. Stochastics continue to lean bullish. Bulls ca

 Gold prices were supported on the 20-D EMA as bulls line up for a test towards the channel resistance.Stochastics continue to lean bullish.Bulls can target the 61.8% Fibo at 1290 ahead of 1297 as the trend line resistance. 1303 is recent swing fractal high.The price leans against the mid-August 2018 major-uptrend’s support line. To the downside, bears can target the double bottom lows at 1266 ahead of 1262. The 200 DMA is located at 1257 while 1251 marks the 10th Dec swing highs.  

Having failed to successfully cross 200-day SMA, the USD/IDR pair presently tests 21-day SMA as it declines to 14,347 during early Monday.

Failure to surpass 200-day SMA portrays pair’s weakness.21-day SMA offers immediate support.Having failed to successfully cross 200-day SMA, the USD/IDR pair presently tests 21-day SMA as it declines to 14,347 during early Monday. Should prices slip beneath 21-day simple moving average (SMA) level of 14,350 on a daily closing basis, 14,236/27 area comprising 23.6% Fibonacci retracement of October – February downturn and 50-day SMA can gain sellers’ attention. If at all there prevails extended downturn past-14,227, 14,100 and 14,000 can offer intermediate halts to the pair’s southward trajectory towards April lows near 13,970. On the contrary, 38.2% Fibonacci retracement can offer immediate resistance at 14,455, a break of which can escalate the pair’s recovery to 200-day SMA level of 14,480. In order to justify additional strength to target 14,720/25 resistance-region, the pair needs to clear 50% Fibonacci retracement level around 14,650 on the top of 200-day SMA.USD/IDR daily chartTrend: Pullback expected 

Risk appetite picked up in tot he long weekend for US and UK markets with equities rebounding and aiding a recovery in commodity-FX. The big news came

Forex on Friday was once again centred around politics.UK PM May announced her resignation.Risk appetite picked up in tot he long weekend for US and UK markets with equities rebounding and aiding a recovery in commodity-FX. The big news came with  The UK's PM announcing her resignation due to take place on 7th June and then act as caretaker PM until a new leader is elected. Borris Johnson, who is in the running for taking My's place, a leading Brexiteer and former foreign secretary, said in respect to May's teary resignation speech, "A very dignified statement from. Thank you for your stoical service to our country and the Conservative Party. It is now time to follow her urgings: to come together and deliver Brexit." "Labour leader Jeremy Corbyn was less sympathetic and proclaimed that the new Conservative Party leader “must call an immediate election” once in power. The UK is due to leave the EU on October 31 and whoever leads Britain post-May will have their work cut out for them," analysts at ANZ Bank explained. Elsewhere, Markets US April Durable Goods Orders came from the U.S. calendar, missing estimates by a small amount (-2.1%m/m, est. -2.0%m/m) and non-defence, ex transport (0.0%m/m, est. -0.1%). "However, downward revisions to March gave a decidedly more negative profile to the volatile data series (headline +1.7%m/m from +2.6%m/m, non-defence/ex transport -0.6%m/m from flat). This raises downside risks for both Q1 GDP and Q2 GDP," analysts at Westpac explained. As for yields, the US 10 Year Treasury Yield ranged sideways in a 2.31%-2.33% range, the 2 Year between 2.15% and 2.17%.  Currency price action The analysts at Westpac summarised Friday's price action as follows: EUR/USD rose from 1.1180 to 1.1210, ticking up a little on Monday’s open. While populists and far right parties performed strongly in some EU elections e.g. France, in general the big winners were the Greens and pro-business Liberal parties.  GBP/USD chopped up 60 pips, to 1.2730. USD/JPY fell from 109.75 to 109.30 without obvious catalyst.  AUD/USD rose from 0.6885 in the Sydney afternoon to 0.6930.  NZD/USD rose from 0.6515 to 0.6555.  AUD/NZD rose from 1.0555 to 1.0580.Key notes from U.S. session: DJIA logs longest weekly losing streak since June 2011   

Italian Deputy Prime Minister and Interior Minister Matteo Salvini was on wires, via Reuters, on early Monday.

Italian Deputy Prime Minister and Interior Minister Matteo Salvini was on wires, via Reuters, after his far-right League party won most votes as conveyed on early Monday. Key points (Source: Reuters) Nothing should change at EU level after vote. Will not seek additional ministerial positions in the government following EU vote. EU vote shows Europe is chaning with Le Pen winning in France and Farage in Britain.

In spite of breaking four-week-old trend-line resistance, the AUD/JPY pair needs to justify the strength of upside momentum by clearing a week-long resistance.

Break of month-long trend-line portrays pair’s strength but another resistance-line question the upside momentum.Pair’s repeated failures to slip beneath 75.30 also favor buyers.In spite of breaking four-week-old trend-line resistance, the AUD/JPY pair needs to justify the strength of upside momentum by clearing a week-long resistance-line. The quote presently trades near 75.80 during early Monday. Should prices clear 75.95 immediate trend-line barrier, 76.35/40 area comprising multiple technical levels since early-May could be on the buyers’ radar. Additionally, pair’s sustained rise beyond 76.40 enables it to target 77.10 and May 07 top around 78.05. In a case where sellers lurk around 75.95, 75.60 and 75.30 may come back on the chart. Assuming extended downturn past-75.30, 75.00 and July 2016 low near 74.50 could become bears’ favorites.AUD/JPY 4-Hour chartTrend: Pullback expected 

ING came up with its key takeaways from the European Parliament elections based on the official projections as of 11:15 pm CET.

ING came up with its key takeaways from the European Parliament elections based on the official projections as of 11:15 pm CET.Key points:An overall turnout of just over 50% for the EU 27 – the UK elections being an odd one out for obvious reasons – is the best since 1994. However, it is still shy of turnouts in national elections. Eurosceptic parties are set to take less than 30% of the seats according to early results. Pressure builds on the French President Macron at home while snap elections at Greece could be bigger news with Italy and Germany holding the status quo. The European Parliament (EP) follows the trend observed in many national parliaments, namely the end of a two-party majority as the Christian Democrats (EPP) and Social Democrats (S&D) lost their majority. This fragmentation will make decision-making more complex in the years ahead.  Today’s results have not flipped the coin in any direction. In fact, this musical chairs game could be a very long game with the only caveat that the current president of the European Commission could stay on as a caretaker. This is something that the European Treaties clearly does not allow for the ECB presidency. 

Explained in a report from Reuters, China’s banking and insurance regulator said on Saturday it did not expect a persistent decline in the yuan and wa

Explained in a report from Reuters, China’s banking and insurance regulator said on Saturday it did not expect a persistent decline in the yuan and warned speculative short sellers they would suffer “heavy losses” if they bet against the currency. The yuan has lost more than 2.5% against the dollar since the festering China-U.S. trade dispute intensified earlier this month. It is now less than a tenth of a yuan away from the 7-per-dollar level authorities have in the past indicated as a floor. “Short-term fluctuation of the yuan exchange rate is normal, but in the long-run, China’s economic fundamentals determine that the yuan will not depreciate persistently,” Xiao Yuanqi, the spokesman for the China Banking and Insurance Regulatory Commission (CBIRC), told a finance forum in Beijing.
 

Although failure to cross mid-month low questions AUD/USD buyers, the Aussie pair is taking the rounds near 0.6930 during early Monday.

Risk tone remains light ahead of the empty calendar.Greenback weakness pleases commodity-linked currencies.Although failure to cross mid-month low questions AUD/USD buyers, the Aussie pair is taking the rounds near 0.6930 during early Monday. The quote has been on the bids off-late as the soft greenback and positive signals from the EU and the UK politics favored global risk sentiment despite the US-China stalemate over trade. Recent news reports from the EU election results are in the spotlight for now. While defeat at the municipal levels pushed Greek PM to call for a snap election, earlier readings show that the Brexit party is a leader at the UK’s EU election counts. As per the CNBC news report, the EU Parliament will be much more fragmented over the next five years with the established centrist bloc failing to gain a majority at this week’s election, early election results and projections show. While the AUD/USD pair is considered as a risk barometer, another such gauge is 10-year US treasury yield that is in green to 2.328% now. Looking forward, fewer/no significant data/events are on the cards due to the holidays in the US. As a result, investors may closely follow news concerning the EU election and the trade rift between the US and China for fresh impulse.Technical AnalysisUnless clearing 0.6940/50 resistance-area, prices are less likely to aim for 0.7000 and 0.7070 numbers to the north, which in turn highlights the importance of 0.6900 and 0.6860 support levels.

The Telegraph is reporting The Brexit Party has stormed to victory in a number of other areas according to Britain Elects, including Wolverhampton whe

The Telegraph is reporting The Brexit Party has stormed to victory in a number of other areas according to Britain Elects, including Wolverhampton where they took 37 per cent of the vote and Durham with 39.5 per cent of the vote.

The Euopean election London results have been confirmed as follows: Liberal Democrats win 3 MEP seats. Labour 2 MEP seats. Brexit Party 2 MEP seats. G

The Euopean election London results have been confirmed as follows: Liberal Democrats win 3 MEP seats. Labour 2 MEP seats. Brexit Party 2 MEP seats. Green Party 1 MEP seats.  

Bloomberg reported that Beijing is committed to striking a trade deal with the U.S. but it’s ready to respond with more countermeasures, according to

Bloomberg reported that Beijing is committed to striking a trade deal with the U.S. but it’s ready to respond with more countermeasures, according to Chinese envoy, Cui Tiankai, The report states that Cui Tianka called the blacklisting of Huawei an “unusual” act of state power against a company. Cui said in an interview with Bloomberg TV Friday that China wants to continue working toward a trade agreement for President Donald Trump and Chinese President Xi Jinping to finalize. There’s no official discussions about a meeting between the two leaders, said Cui, the Chinese ambassador to the U.S.

With the early results of Britain’s EU election favoring Brexit party, the GBP/USD pair seems to fail to stretch recent recovery during early Monday.

Theresa May’s resignation couldn’t please the GBP buyers for long as disappointments from Brexit Party’s lead are on the rise.Political news reports to gain major importance amid the UK holiday.With the early results of Britain’s EU election favoring Brexit party, the GBP/USD pair seems to fail to stretch recent recovery as it seesaws near 1.2720 during the early Asian session on Monday. While news that the Brexit Party received the highest number of votes in Hillingdon triggered initial setback for the ruling Conservative party, that is already going through a lot of noise, BBC’s polls signaling Tories to get lesser acceptance added further pessimism for the British lawmakers. The present Tory leader and UK Prime Minister, Theresa May, has recently announced her resignation for June 06. This initially helped the British Pound (GBP) off-late as political uncertainty surrounding Brexit got slight relief as many among the UK policymakers didn’t get well with the PM May. However, the optimism is less likely to remain for long as not only search for the next PM, wherein Boris Johnson is a lead, is still to deliver results but the rising popularity of Brexit party increases the uncertainty. Brexit party is a new one on the ground formed by former UKIP leader Nigel Farage. The party respects more distance from the EU and also supports no-deal Brexit, if needed. It should also be noted that the UK markets are closed on Monday due to Spring Bank Holiday.Technical AnalysisThe three-week-long descending trend-line and February lows highlight 1.2770 as near-term important resistance for the pair, a break of which could propel prices to 1.2800. Meanwhile, 1.2680 and 1.2600 are likely nearby supports for the pair with 1.2480 and January 2018 bottom around 1.2430 being expected targets for bears then after.

With the fewer directives to guide early-week moves, the NZD/USD pair trades near 0.6550 at the beginning of the Asian session on Monday.

USD weakness helps Antipodeans.Lack of data shifts market attention to qualitative news reports.With the fewer directives to guide early-week moves, the NZD/USD pair trades near 0.6550 at the beginning of the Asian session on Monday. The gained traction off-late after the US Dollar (USD) weakness helped built overall market sentiment towards commodity-linked currencies. The greenback was on its downturn recently after scheduled data flashed soft outcomes, the latest one was durable goods orders. As a result, the Kiwi crossed two-month-old descending trend-line resistance of Friday and has been holding the gains since then. The economic calendar has no major data/events to offer today as the US markets are closed for Memorial Day. However, traders might not ignore details from the US-China trade developments, if any. Both the world’s largest economies are on the war of words and little progress has been made after the US President Donald Trump levied fresh tariffs on Chinese goods and the talks stalled. Recently, Chinese President Xi Jinping asked for global technology cooperation at the China International Big Data Industry Expo after the US blocked Huawei.Technical AnalysisHaving breached immediate resistance-line (now support), the pair can aim for 0.6585 and 0.6610 numbers to the north whereas 0.6660 and 50-day simple moving average (SMA) level of 0.6690 could be on the buyers’ radar then after. Should the quote dip back beneath 0.6515 support, 0.6480 and 0.6460 may please sellers ahead of highlighting October 2018 low near 0.6425.

The Financial Times reports that this while the EU results are a setback, they are no catastrophe for Macron in EU poll.

The Financial Times reports that this while the EU results are a setback, they are no catastrophe for Macron in EU poll.

First results from Leeds suggest Brexit party leading Britain's EU election... More to come...

First results from Leeds suggest the Brexit party are leading Britain's EU election... More to come...

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