Forex news for Asia/Pacific trading on August 1, 2019
- Lots of stuff to be released in the new day
- Key option expiries for Thursday NY cut (10 AM ET)
- China Caixin manufacturing PMI for July 49.9 vs 49.6 estimate
- BOJ Dep. Gov Amamiya: Will take appropriate action as needed
- Australia import prices for 2Q QoQ 0.9% vs 1.8% estimate
- PBOC sets USD/CNY reference rate for today at 6.8938(vs. Wednesday at 6.8841 )
- Japan final manufacturing PMI for July 49.4 vs 49.6 estimate
- More Powell bashing from Pres. Trump. Uses Fed's Bullard as his ammunition this time
- Australia's CoreLogic house price index for July rose 0.1% versus 0.1% estimate
- More from WH Bolton: North Korea launches do not violate pledged by leader Kim
- China Xinhua News: China/US can push forward trade discussions on basis of equality
- Australia CBA manufacturing PMI for July final 51.6 versus 51.4 preliminary
- Australia: AiG PManufacturing index 51.3 vs 49.4 last month
- The GBP beats out the dollar as the strongest currency on the day
- Pres. Trump to Fed's Powell: You let us down....
In other markets:
- Spot golds is lower by -$3.46 at $1410.45 as the precious metal is following the dollar strength.
- WTI crude oil is down by -$0.71 or -1.21%. Crude oil is not applauding what happened in China.
The FOMC decision where Fed's Powell seemed to have some hesitation about future cuts, sent the dollar higher yesterday.
In addition, there was some technical levels broken along the way which helped the greenback move higher. Pairs like the EURUSD, and USDJPY broke through some key levels. So although Powell, may have mispoke, or his comments were misinterpretted, the dollar still went higher and that trend continued in the Asian Pacific session.
Ranking the major currencies by cumulating the % changes of major pairs vs each other, shows the USD as the 2nd strongest currency (behind the AUD). Given the move higher yesterday, the continuation is good news for the dollar buyers. Technically, the picture got better too (for most).
Fundamentally, in the Asian session, the AiG Australian Performance of manufacturing index moved back above the 50 level (to 51.6) and the CBA manufacturing PMI was also better. That gave the AUD support and helped that currency top of the currency table (see ranking above).
In contrast the Japan final PMI was weaker than expected and BOJs Dep. Gov Amamiya was also a bit dovish in his comments. As a result the JPY is the weakest of the majors.
Technically, the EURUSD yesterday moved below the swing lows at 1.1109, 1.11064 and 1.11007. That area was a key floor area and the low just before reached 1.1060. There was a correction higher by that move stalled at 1.1079 - well below the 1.1100-09 area, and the downside was extended. Now the pair did reach a trend line target on the hourly chart at the 1.1133 low (see post here), but the correction off that low could only get to the 38.2% of the move lower today (at 1.1151). So sellers remain in control into the European session.
The USDJPY continued its move higher by taking out the week high at 108.91, the July high at 108.987 and then a trend line at 109.11 on its way to a Asian high at 109.31. The correction off that high retraced to the broken trend line at 109.11 but has found some buying against the level. The pair trades at 109.19 with 109.11 and 108.987 as risk levels that would hurt the pair.
The GBPUSD moved back lower too but when it broke below the low from Tuesday at 1.2118, and a lower trend line on the weekly at the 1.2108 level, it seemed it too was heading lower. However, it reached the natural 1.2100 level and stopped. That inability to move lower, is a reason to have a pause for cause. The price is not running (there is some work to do to give buyers more confidence - see post here), but there is a little more balance after the hold. BOE decision ahead could help shove the price one way or another but getting below the 1.2100 -09 area would be key for the bear.
That'll do it for me. Wishing you all good fortune in your trading.
