Market Roundup
- EUR/USD 0.31%, USD/JPY -0.13%, GBP/USD 0.24%, EUR/GBP 0.03%
- DXY -0.17%, DAX 0.21%, FTSE -0.74%, Brent -0.28%, Gold 0.51%
- Euro, yen gain as U.S. political uncertainty weighs on dollar
- China to remove some import, export tariffs including alternative feed meals
- Norway's currency hits decade-low against euro
- China Q4 business confidence index lowest since Q2 2017 - c.bank survey
Economic Data Ahead
- No major data release scheduled
Key Events Ahead
- No major event scheduled
FX Beat
DXY: Concerns about a partial U.S. government shutdown weighed on investor sentiment and the dollar. Against a basket of its rivals, the dollar slipped 0.24 percent to 96.72. Technical bias remains bearish, scope for test of 100-EMA at 95.95.
EUR/USD: EUR/USD struggling to gain follow-through up-move beyond 1.1400 handle. The pair regained positive traction at the beginning of the week. Price action has recovered a part of Friday's sharp intraday fall of around 120-pips. the pair is currently testing 55-EMA at 1.1409 and break above will see continuation of upside momentum. Technical studies on intraday charts are turning slightly bullish and we see scope for gains till 110-EMA at 1.50. Break below 20-DMA at 1.1359 to see weakness. Dip till 1.1270 then likely.
USD/JPY: Japan was closed on Monday for a holiday. USD/JPY showed a sluggish recovery in holiday-thinned markets with 200-DMA offering strong support. The major however failed to hold onto gains and is currently trading 0.09% lower at 111.10. Break below 200-DMA at 110.92 will see weakness till next major support at 110.30 (Lower BB) and the 109.59 (50% Fib). Bounce off 200-DMA could see upside till 21-EMA at 112.60. Bearish invalidation likely above 113.80 (Triangle top).
GBP/USD: The pound sterling treading water ahead of January Brexit vote. GBP/USD was up 0.27% on the day at the time of writing. The currency would struggle to make much headway before crucial Brexit developments on the immediate horizon. Technical bias remains neutral. Stiff resistance seen at 21-EMA at 1.2686. Break above could see upside till next resistance at 55-EMA at 1.2808. 5-DMA is immediate support at 1.2635. Break below could see downside till 1.25 levels.
AUD/USD: Chinese plans to remove tariffs lifts sentiment around the antipodeans. Recovery in the pair lacks traction and we see major resistance at 1H 21-EMA at 0.7067. With broader economic slowdown impeding investment and US-China trade tensions still looming over sentiment, downside in the pair remains intact. The pair has hit new 9-week lows at 0.7029 on Friday's trade. And further weakness will see test of 0.69 (Aug 2015 lows) ahead of 0.6827 (Jan 2016 low). On the flipside, breakout at 5-DMA could see upside till 21-EMA at 0.7177. Bearish invalidation only above 200-DMA.
Equities Recap
European markets falter, worries over slowing economic growth and tighter monetary conditions dampen sentiment. Britain's FTSE 100 was down 0.46 percent at 6,690.00 points, while mid-cap FTSE 250 was down 0.17 percent at 17,417.61 points. Germany's DAX was closed; France's CAC 40 was down 1.06 percent at 4,644.83 points.
Major European markets on track to end 2018 at 2-year lows. Germany's export-oriented DAX index is set to be the worst performer, down more than 17 percent so far in 2018. France's CAC is down 12.5 percent, the FTSE 100 down 13.1 percent and Italy's FTSE MIB down 15.8 percent.
Commodities Recap
Brent crude edges up, but concern over demand limits gains. Brent crude futures were up 12 cents at $53.94 a barrel by 0858 GMT, while U.S. crude futures lost 3 cents to $45.56.
Gold edges higher as risk-aversion on U.S. political uncertainty keeps demand. Spot gold was up 0.6 percent at $1,263.01 per ounce, as of 0856 GMT. U.S. gold futures were up 0.6 percent at $1,265.8 per ounce.
Among other metals, palladium rose 0.7 percent to $1,240.00 per ounce. Silver climbed 0.8 percent to $14.72, while platinum gained 0.6 percent to $791.72 per ounce.
Treasuries Recap
***No major events and indicators are scheduled for the day as most of the European and UK markets are closed on account of Christmas.
