Markets Patiently Wait For US Open

September 3, 2019

By Orbex

Dollar Marginally Higher On Upbeat Data Flow

Last Friday’s upbeat personal spending figures helped the US dollar rise to fresh highs, a narrative followed into Monday’s slow session and also into Tuesday’s London session. Should positive flows continue post-NY open, the US Index could move towards the 100 psychological barrier. However, this is highly unlikely considering today is the first NY session after last Sunday’s tariffs on new Chinese products. And market participants wait to see how the US markets will react to that latest trade development.

Euro Traders Seem Pessimistic As German Data Disappoint

Investors keep selling the euro below 1.10 in the first few trading sessions of September as German PMI remains deep into recessionary levels at 43.5 (a technical recession). Despite the fact that the European session started off on bad footing, FX traders have recovered some of the earlier losses but weakness remains intact. Traders are waiting for the NY open before taking any decisions on the direction of EURUSD.

Cable Crosses 1.20 As Brexit Uncertainty Soars

The worst performing currency pair today is the British Pound. GBPUSD fell on the back of poor Manufacturing PMI data (47.4 vs 48) as well as the continued Brexit drama. Boris Johnson ruled out a 3rd Brexit extension yesterday. Today, parliament is expected to vote against his will. The sentiment has been bearish but over the past hour or so blocks of long bets have managed to spike prices to the upside. It will interest to keep an eye on the pair near the day’s close.

Risk Currency Pairs Little Unchanged Despite Early Decline

The Australian, New Zealand and Canadian dollars traded only biased in the London session. Initial moves marked a short-term bearish spike benefiting the US counterpart. The former, which moved widely compared to kiwi and loonie on the back of RBA’s IR decision, was able to recover post-RBA losses as risk remains at muted levels ahead of markets reaction to the trade war escalation. Aussie looks somewhat upbeat on the bank’s neutrality and loonie on the back of a weaker oil. Note that all risk pairs bounced off at strong psychological levels.


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Commodities’ Breakout Held By Trade War Reaction Delay

While the reaction to the standoff between the US and China remains dry, gold and oil FX traders are likely to stay cautious when dealing with breakout flows. Gold trades quietly near 1531 per ounce. WTI oil found a bottom near 54.20 per barrel after bears reacted at 55 but the black gold slid to levels below 54. The sideways markets are tight, which is indicative of a breakout which has already occurred the US Oil. This is a likely scenario for gold too, but once the US goes live after a long weekend.

By Orbex