The Aussie strengthened yesterday and during today’s Asian session against the greenback as hopes revived for further progress in the US-Sino negotiations. The hopes were instigated by a Financial Times report which stated that most differences between the two countries were resolved. Analysts point out that the market reacted calmly until now, as it may have more or less expected that a trade deal was possible. That being said, we see the case for the main catalyst of a sharper market reaction, to be if the discussed deal, could overturn the bearish outlook of economists worldwide about a possible slowdown of the economy. It should also be noted that analysts also point out towards a more risk on mood in the markets. AUD/USD strengthened yesterday and during today’s Asian session, aiming for the 0.7120 (R1) resistance line. We could see the pair continuing to trade in a bullish market, should the positive headlines about the US-Sino negotiations continue to reel in. Also the pair might prove sensitive to today’s financial releases. Should the bulls continue to be in charge, we could see the pair breaking the 0.7120 (R1) resistance line and aim for the 0.7190 (R2) resistance barrier. Should on the other hand the bears take over, we could see the pair aiming if not breaking below the 0.7065 (S1) support line.
Pound gains as Theresa May seeks Brexit delay.
The GBP strengthened yesterday on hopes of a softer Brexit, as Theresa May seems to be seeking a further delay of the Brexit date. UK’s PM could be needing more time in order to sit down with the Labour Party, in an effort to break the Brexit deadlock. According to analysts, Theresa May could be recognizing that she will not be able to gather the necessary majority through here own party and is currently seeking opposition support. Should that be the case we could see her changing her stance in favor of a softer Brexit which may include the UK remaining in the EU customs union. It should be noted though that Theresa May’s leverage over the Labour party may be weak. Theresa May and Jeremy Corbyn are to meet, but before that they will be facing each other at the PM’s weekly questions and answers session in the UK Parliament. We could see the pound being sensitive and if positive headlines reel in, we could see the pound strengthening. After a drop in the European session yesterday, Cable rose once again and broke the 1.3070 (S1) resistance line (now turned to support), aiming for higher grounds. Should there be further positive headlines about Brexit, we could see the pair rising even further, albeit it should be noted that bullish course could be reversed if negative news reach the market. Also please be advised that the pair could be sensitive on both sides, as to today’s financial releases. Should the pair find fresh buying orders along its path, we could see it breaking the 1.3175 (R1) resistance line and aim for the 1.3265(R2) resistance barrier. If cable comes under the selling interest of the market, it could break the 1.3070 (S1) support line and aim for the 1.2970 (S2).
Other economic highlights, today and early tomorrow
In today’s European session, we get Turkey’s CPI rate for March, Eurozone’s final composite PMI for March and retail sales for February. Also in the European session we get from the UK the Services PMI while in the American session, we get the US ISM non-Manufacturing PMI for March and the EIA crude oil inventories figure. As for speakers, please note that Atlanta Fed President Bostic and Minneapolis Fed President Kashkari will be speaking today.
AUD/USD H4
Support: 0.7065 (S1), 0.7005 (S2), 0.6950 (S3)
Resistance: 0.7120 (R1), 0.7190 (R2), 0.7245 (R3)
GBP/USD H4
Support: 1.3070 (S1), 1.2970 (S2), 1.2875 (S3)
Resistance: 1.3175 (R1), 1.3265 (R2), 1.3350 (R3)
