The dollar index closed tad below the April 2019 high on May 22nd as FOMC minutes echoed the Fed’s patience stance.
Among G10 currencies, GBP was the biggest intraday loser down by 0.4% to 1.2625 and closed at 1.2660. Brexit related headlines continue to weigh on the Pound.
Here is a gist of what analysts published on the latest developments of Brexit.
- “Political pressure has increased over the past 48 hours, and PM May is now at risk of being forced out of office sooner rather than later,” Westpac said in a note this morning.
- Ray Attrill, Head of FX Strategy at NAB said “Speculation Theresa May will be forced to step down as prime minister before she gets the chance to present her withdrawal agreement bill for the fourth time is intensifying. The 1922 committee of Conservative backbenchers are meeting on Friday and will reportedly discuss changes to its rules to allow an early leadership contest if May does not resign first (under the current rules, May cannot face a leadership contest until December)”.
EURUSD and AUDUSD have been trading in a tight range, closed at the lower end of the spectrum. Whereas NZDUSD continues to underperform.
In commodities, Brent crude oil price down by more than 1.5% on EIA inventory report. Finally, the price lost 50MA for the first time since January 2019. This morning in Aisa, the price again rejected at 50MA, now focus on its 200MA at 69.00$ below here 68.50$ its earlier swing low. A daily close below 68.50$ could retrace further to its 100MA coincides with 100.fe target at 66.50$.
The EIA reported “Gasoline inventories increased by 3.7 million barrels last week and are at the five year average for this time of year” Also reported crude oil inventory “increased by 4.7 million barrels from the previous week.”
Also read: Brent on Triple top pattern
Note that, OPEC meeting delayed could hurt the near-term trend. Warren Patterson at ING said, “The key OPEC meeting, which was scheduled to be held in Vienna on June 25th, followed by the
OPEC+ meeting on June 26th has been delayed until the first week of July, according to Ecuador’s Resources Minister.”.
This morning Japan PMI hits the screens. Flash Japan Manufacturing PMI falls to 49.6 in May, from 50.2 in April. The official data said, “Output and new orders decrease for the fifth successive month.”
Looking at the day ahead, it’s a reasonably busy day data highlighted by EZ PMI survey, German May IFO survey, and German 1Q GDP numbers. On top of these, we will also see minutes ECB’s April meeting.
Chart of the day: EURUSD
Ahead of today’s busy macro data highlights, EURUSD going to trade between 1.1140-1.1185 levels. Note that, a move above 1.1185 ONLY could strengthen the bulls towards 1.2220. Alternatively, below 1.1140, we could expect to re-test the 1.1100 and 1.1050 levels.
The daily RSI lacks conviction, and the oscillator has been propelling down.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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