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    Morning Report – Tuesday 20th August

    THE DAILY REPORT

    MORNING REPORT

    TOP THINGS TO KNOW

    Yen, Swiss franc fall on hopes of global stimulus measures

    (Reuters 20/08/2019) - The safe-haven yen and Swiss franc retreated against the dollar on Monday, as risk sentiment improved after a week of turmoil on hopes major central banks would launch fresh stimulus measures to lift their sluggish economies.

    Optimism about government action to calm U.S. recession concerns, triggered by last week’s inversion of the bond yield curve, grew ahead of the Federal Reserve’s symposium later in the week in Jackson Hole, Wyoming, where analysts said central bankers could announce new measures.

    China also unveiled interest rate reforms expected to lower corporate borrowing costs, which helped lift the market’s mood, while the prospect of Germany’s coalition government ditching its balanced budget rule to take on new debt and launch stimulus steps also boosted risk appetite.

    “We think the more accommodative central bank backdrop should help insulate the downside in risk markets,” said Mazen Issa, senior FX strategist at TD Securities in New York.

    “We would prefer to see additional dollar gains through the close of this week to confirm last week’s reversal and think a daily close above 106.80 yen... would support the outlook for dollar strength,” the bank said.

    “The Jackson Hole summit would be the perfect venue for the Fed to set or reset market expectations,” said Kathy Lien, managing director of FX strategy at BK Asset Management. “If they’re committed to lowering interest rates in September, we should hear central bankers downplay the improvement in spending and retail sales.”

    GBP/JPY technical analysis: Short-term support-line limits pullback inside a week-long rising wedge

    (FXStreet 20/08/2019) - GBP/JPY rests on an immediate rising trend-line as it trades near 129.27 during the early Asian session on Tuesday.

    While a break of the three-day-old support-line, at 129.20 now, can drag prices to the short-term rising wedge support of 128.70, pair’s further downside will confirm the bearish technical pattern and can drag the quote towards last week's low of 126.55.

    However, 127.50 and 126.80 could offer intermediate halts during the pair’s south-run.

    Alternatively, an upside clearance of 129.75 negatives the bearish formation and can trigger fresh run-up to 130.00 round-figure. It should also be noted that 130.30 and 130.65 will entertain buyers past-130.00 breakout.

    AUD/USD stays below 0.6800 ahead of RBA minutes

    (FXStreet 20/08/2019) - With the improvement in global risk sentiment and the US Dollar (USD) rise confusing the Aussie traders, the AUD/USD pair seesaws near 0.6765 during early Tuesday morning in Asia.

    On Monday, investors welcomed China’s step towards free-floating currency and Germany’s readiness to announce fiscal measures while the news that the US delaying restrictions on China’s Huawei offered additional upside momentum to the risk-tone.

    Investors will now keep an eye over the Reserve Bank of Australia’s (RBA) monetary policy meeting minutes for the August 06 decision, up for publishing at 01:30 GMT. Although the central bank didn’t alter its monetary policy at the meeting, clues for further rate cuts and/or dovish economic outlook can further please Aussie sellers.

    Additionally, trade/political news will continue entertaining market players post-minutes as no major data/events appear on the economic calendar then after.

    Technical Analysis: 0.6750/45 and 0.6735 will be on the sellers’ radar unless the quote rallies beyond 0.6822, which in turn opens the door for a fresh leg up to June low surrounding 0.6831 and then to May bottom near 0.6860.

    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.

    USDJPY 30 Minute – Long positions above 106.30 with targets at 106.95 & 107.25.

    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 0.6775 with targets at 0.6755 & 0.6745.

    CRUDE OIL 30 Minute – Long positions above 55.35 with targets at 56.53 & 57.31.

    EURUSD 30 Minute – Short positions below 1.1115 with targets at 1.1065 & 1.1035.

    GBPJPY Daily – Buy above 125.93, rebound towards 136.57.

    GOLD Daily – Long positions above 1465.00 with targets at 1565.00 & 1600.00.

    ASX 200 Daily – Short positions below 6630.00 with targets at 6210.00 & 6100.00.

    SILVER Daily – Long positions above 16.6000 with targets at 17.8000 & 18.2000.

    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 20, 2019 | 5:49 AM