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Open discussion points in the Asia-Pacific market
- US dollar falls as GDP data fuel Fed rate cuts, S & P 500 and NZD gains
- Crude Oil Falls to Support Uptrend as Trump Presses OPEC to Lower Prices
- Markets Looking for an Illiquid Start, Offline Japanese Stocks for Golden Week
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FX News Friday
the US Dollars declined Friday, but he still managed to cap a solid week that had some episodes of risk aversion. Most of its weakness came after a mixed report on US GDP in the first quarter. While growth surprised the rise (3.2% against 2.3% expected), it was undermined by the weakness of personal consumption (1.2% against 2.5% previously). The latter accounts for about 70% of global GDP.
An increase in inventories, usually a volatile component, contributed to much of the growth. That said, yields on US government bonds at the beginning of the year have come down, which indicates a reduction in bets on the Fed's key rates. Futures on federal funds are now forecasting a reduction of about 66% by the end of the year, up from 61% on Thursday. At the end of the day, the S & P 500 increased by 0.47% while the sector at risk Australian and New Zealand Dollars climbed.
But it was not smooth. After the report on GDP, the US president Donald Trump took another shot at to bring OPEC to increase its oil production. This allowed the commodity to drop on its worst day in more than four months and conclude the most disappointing week of the past two months. As a result, energy stocks have weakened and deprived the S & P 500 of its full potential for the day.
Technical analysis of crude oil
Looking at the daily chart, crude oil closed right on the rising support line from late December. Its recent fall has occurred alongside divergence RSI negative which was referring to a future summit. Confirming a close below the trend line opens the door to a new dominant downtrend. On the other hand, the resumption of the uptrend implies a resistance above 66.58.
Daily chart of crude oil
Chart created in TradingView
Monday meeting in Asia-Pacific
As we begin a busy week with a risk of critical economic events in the United States, the Monday session for Asia-Pacific lacks particular data. As such, it focuses on risk trends. Japanese markets are offline for the Gold week vacations resulting in lower liquidity levels than usual, which may increase the volatility of surprise announcements. If other regional stock markets follow Wall Street higher, the anti-risk market Yen can weaken.
FX Trading Resources
— Written by Daniel Dubrovsky, Junior Forex Analyst for DailyFX.com
To contact Daniel, use the comments section below or @ddubrovskyFX on Twitter
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