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AETOS Market Commentary 18/03/2019

AETOS Capital Group


The Aussie rode modestly on Friday, closing at 0.7084(+17 pips) against the greenback.

Most of the uplift in the AUD/USD on Friday occurred as Chinese markets opened, seeing the AUD/USD rise back towards the .7100 level as reports emerged that officials from the US and China had made “substantive progress on trade talks” in recent weeks.

That news, helping to lift risk appetite among investors, helped to keep the AUD/USD supported on dips during the session.

Mixed US economic data also helped the Aussie’s cause, seeing US bond yields and the greenback pullback a touch. In terms of domestic economic conditions in Australia, traditionally March is a seasonally strong month for Australia’s housing market, 2019 is different. While auction clearance rates have lifted from record lows struck late last year, they remain well below the levels of a year ago.

Those weekly declines extended the price falls in Sydney and Melbourne since the start of the month to 0.6% and 0.5% respectively. Prices have also fallen 0.2% in Brisbane and Adelaide since the end of February. Mirroring the weekly result, prices in Perth have been flat so far in March.

AUDUSD 4 Hour Chart


Based on the chart above, the pair is currently trading below its 100SMA(Blue Line), as prices are still struggling to get past it.

Based on the RSI, downside risk remains ample. Support and resistance set to 0.7072 and 0.7092.


The Euro rose on Friday, closing at 1.1323(+17 pips) against the greenback.

This week brings a busy macroeconomic calendar ahead with updates on growth and monetary policy scheduled.

Concerns about the Union's growth keeping demand for the EUR subdued. The shared currency, however, posted a modest advance, with the pair settling around 1.1330, as the Union's economic downturn made it unattractive.

On Friday, the EU released unimpressive February inflation figures, up by 0.3% MoM and 1.5% YoY as expected.

US Industrial Production and Capacity Utilization posted modest advances in February, up by 0.1% and 78.2% respectively, although the preliminary Michigan Consumer Sentiment Index for March beat expectations, jumping to 97.8 in March, falling short anyway on triggering dollar's demand by the end of the week. Monday will be light in terms of macroeconomic releases, as the EU will release January Trade Balance while the US will unveil the NAHB Housing Market Index, both minor reports that usually don't affect the price.

The week, however, will have plenty of macro-action, with the US Federal Reserve monetary policy meeting, fresh updates on EU growth in the form of Markit PMI, and more UK Parliamentary discussions on Brexit.

EURUSD 4 Hour Chart


The pair the latest daily decline from 1.1419 to the yearly low set this March at 1.1175, the 61.8% Fibonacci retracement stands at 1.1330, a level that the pair has pressured since mid last week, but so far, capped the upside.

The daily chart shows that the pair has spent the last three trading days seesawing around a directionless 20 DMA, while below bearish 100 and 200 DMA.

Technical indicators in the mentioned chart hovered around their midlines, lacking directional strength, all of which keeps the risk skewed to the downside, although an upward corrective movement is not out of the cards, particularly if the pair can advance beyond 1.1375, now the immediate resistance.


Risk Disclaimer

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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