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AETOS Market Commentary 15/03/2019

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AUDUSD

The Aussie fell on Thursday, closing at 0.7066 (-19 pips) against the greenback.

After opening the session at .7093, the AUD/USD reduced lower in Asian trade, adding to losses in the second half of the session from the announcement of Chinese industrial output, fixed asset investment and retail sales data that was either in line or slightly below market expectations.

Reports that US President Donald Trump and Chinese President Xi Jinping were unlikely to sign off on a trade deal in the near-term also weighed on the Aussie, seeing the AUD/USD fall to as low as .7042 before gradually recovering in late European and North American trade.“Reports that a Trump-Xi meeting might not take place at least until late April, but which could be expanded to a full state visit rather than just a photo-op to sign a trade deal, were greeted with some disappointment,” said Ray Attrill, Head of FX Strategy at the National Australia Bank. “Since then, US Treasury Secretary Steve Mnuchin has been out on CNBC confirming that there will be no Trump-Xi meeting this month at least but that he is pleased with progress on trade talks.” The latter comments, along with remarks from Donald Trump that the US is “getting what we have to get” and getting it “relatively quickly” in relation to trade negotiations, may explain the Aussie’s modest recovery towards the close.

Turning to the day ahead, it looks set to be a quiet session for markets with little on the economic calendar to speak of.

There’s no data released in Australia. Elsewhere, Chinese new home prices is the only major release scheduled in Asia.

AUDUSD 4 Hour Chart

AUDUSD-4-Hour-Chart-15-03-2019

Based on the chart above, the 20 SMA(Red line) is proven to be a good area of resistance after being tested several times in the past.

The short term outlook for the pair will be bearish considering the meeting of President Trump and Xi will only happen during the late of April, this would create extra selling pressure on the commodity currency.

EURUSD

The Euro fell on Thursday, closing at 1.1305(-25 pips) against the US dollar.

The EUR/USD pair fell this Thursday to 1.2938, easing ever since the day started on the back of soft Chinese data and market talks suggesting the Japanese government will review its growth assessment this month spurring risk aversion.

The dismal sentiment was exacerbated during London trading hours by news suggesting that China is considering delaying the Trump-Xi meeting to at least April, triggering concerns about an escalation in the trade war.

Furthermore, German February CPI missed the market's expectations and resulted slightly below expected, up by 0.4% MoM and by 1.5% YoY. US data disappointed, halting dollar's advance, as weekly unemployment claims resulted at 229K in the week ended March 8, while New Home Sales plunged by 6.9% in January.

Meanwhile, the market continues being all about Brexit, with the ups and downs in GBP/USD triggering some directional moves in the pair. The EU will unveil final February inflation figures this Friday, with the core monthly reading already revised to 0.3% from an initial estimate of -1.5% The core annual reading is expected unchanged at 1.0%. The US will publish the March NY Empire State Manufacturing Index, forecasted at 10.0 vs. the previous 8.8, February Industrial Production and Capacity Utilization, and the preliminary Michigan Consumer Sentiment Index for March, foreseen at 95.3 vs. 93.8 previously.

EURUSD 4 Hour Chart

EURUSD-4-Hour-Chart-15-03-2019

The pair finishes the American session hovering around the 1.1300 level, the 50% retracement of the latest daily decline, after failing to establish itself beyond the 61.8% retracement of the same slide, which skews the risk to the downside.

In the 4 hours chart, the 20 SMA has continued advancing, now a few pips below the daily low, while technical indicators corrected overbought readings, now lacking directional strength just above their midlines, indicating that sellers are not ready to give a decisive downward push at the time being.

Major Economic Events happening this week (AEDT Time Zone)

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The information above is of general nature only and does not take into consideration your objectives, financial situation or investment needs. The products and services provided are issued by AETOS Capital Group Pty. Ltd. (AFSL: 313016, ACN: 125113117). Trading Forex margin and CFDs carries a high level of risk, and losses can exceed your deposits. You are strongly recommended to seek independent financial advice before you make an investment decision. Please refer to our Product Disclosure Statement which you can obtain from our website for more details. AETOS has the ownership of the contents of this FX commentary. Copying, reprinting or publishing to a third party is not permitted.

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Source: https://www.aetoscg.com/uk/market-commentary
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