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    Morning Report – Thursday 1st August

    THE DAILY REPORT

    MORNING REPORT


    TOP THINGS TO KNOW

    U.S., China to keep talking on trade after little progress in Shanghai

    (Reuters 01/08/2019) - U.S. and Chinese negotiators ended a brief round of trade talks on Wednesday with little sign of progress and agreed to meet again in September, prolonging an uneasy truce in a year-long trade war between the world’s two largest economies.

    The talks were the first face-to-face meetings since U.S. President Donald Trump and Chinese President Xi Jinping met in June and agreed to get negotiators back together to try to find a way out of the dispute.
    The White House and China’s Commerce Ministry each described the meetings in Shanghai as constructive, but neither announced any agreements or goodwill gestures that might have cleared the path to more substantive future talks.

    The two governments have levied billions of dollars of tariffs on each other’s goods, disrupting global supply chains and roiling financial markets. The International Monetary Fund has warned that the trade dispute will shave 0.2% off global output.

    China’s Commerce Ministry said “both sides ... had a candid, highly effective, constructive and deep exchange on major trade and economic issues of mutual interest.” It said negotiators discussed more Chinese purchases of U.S. agricultural products, but did not say there was any agreement to buy more.
    The White House said China restated its commitment to buy more U.S. farm goods and said negotiations on “an enforceable trade deal” would continue in Washington in early September, but gave no details about expected agricultural purchases.

    Dollar Bears and Trump Both Dealt a Blow by Fed’s Hawkish Cut

    (Bloomberg 01/08/2019) - With Jerome Powell downplaying the size and scope of future Federal Reserve rate cuts, the U.S. dollar looks poised to extend its 2019 rally. It’s yet another setback for bears and a move that’s certain to attract Donald Trump’s ire.

    The central bank trimmed interest rates on Wednesday, but disappointed many -- including the U.S. president -- as Powell said this wasn’t the start of a prolonged series of reductions. Before the announcement, many had wagered the Fed would be more dovish to match other major central banks concerned about a slowdown in global growth.

    The greenback surged in the aftermath, with the Bloomberg dollar index jumping to a two-month high. Another benchmark from Intercontinental Exchange Inc. got to a level last seen in 2017. Hedge funds and speculators weren’t positioned for this, having gotten the least bullish on the dollar since June 2018 as of a week ago, the date of the most-recent government tally.

    Trump -- who has complained about the strength of the dollar -- didn’t seem pleased either. “As usual, Powell let us down,” he tweeted. Before the Fed’s decision, he’d called for a “large” rate cut. Instead, the central bank delivered a standard one, a 25-basis-point reduction.

    Many observers see more dollar gains ahead, given that the Fed’s peers are even more dovish.
    Economic weakness is compelling central banks to take “more aggressive steps to weaken their currencies,” said Greg Anderson, New York-based global head of currency strategy at the Bank of Montreal. “If the Fed’s not going to play that game, the dollar is going to take off.”

    The greenback has outperformed most Group-of-10 currencies this year, except for the Canadian dollar and the yen. The Bloomberg index surged 1.9% in July, the biggest monthly gain since October.

    “It’s hard to see an argument for the dollar to be weaker from here over the next month,” said Eimear Daly, currency strategist at Macquarie Bank. “In an environment where other central banks are advocating a trajectory of policy easing, a one-and-done Fed rate cut won’t be enough to temper strength. Being the least dovish central bank in the pack means currency strength.”

    TRADE OPPORTUNITIES

    Below are Trading Central's Intraday preference recommendations. Short (SELL) positions and long (BUY) positions have two targets issued which may be used as take profit levels. Above or below a certain figure indicates the pivot level which may be used as a level for stop loss.

    EURUSD Daily – Short positions below 1.1110 with targets at 1.1060 & 1.1035.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    AUDUSD 30 Minute – Short positions below 0.6875 with targets at 0.6805 & 0.6785

    CRUDE OIL 30 Minute – Short positions below 60.80 with targets at 54.80 & 50.60.

    EURAUD 30 Minute – The downside prevails as long as 1.6230 is resistance.

    DOW JONES 30 Minute – Long positions above 26825 with targets at 26980 & 27070.

    NZDUSD 30 Minute – The downside prevails as long as 0.6575 is resistance.

    NIKKEI Daily – Long positions above 20950 with targets at 22350 & 23000.

    This is general advice only and does not take into account your personal circumstances. “It is the Policy of ForexCT to recommend the use of stop/loss function to reduce risk of significant losses to customers.

    Economic Announcements
    (times in AEST)

    Risk Warning
    Trading FX and CFDs involves a substantial degree of risk and should only be undertaken with risk capital. Please consider our PDS and FSG before trading with us. A copy can be found on our website www.forexct.com.au. Forex Capital Trading Pty Ltd provides general advice that does not take into account your objectives, financial situation or needs. Investors do not own or have rights to underlying assets. Forex Capital Trading Pty Ltd is regulated by ASIC (AFSL 306400), ABN (69119086270). Forex Capital Trading Pty Ltd’s AFS license and Australian regulation only applies to the financial services being provided in Australia only.

    Posted: August 01, 2019 | 5:56 AM