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AETOS Market Commentary 24/05/2019

AETOS Capital Group


AETOS Market Commentary

Global markets had been subdued by unstable political sentiments throughout this week with continuous escalation of the trade war between U.S. and China, sanctions on Iran, and British Prime Minister Theresa May’s resignation. Most recently Sterling fluctuated in a range before settling higher after May announced she will step down as party leader June 7th.

Ahead of a long weekend for both the U.S. and U.K., concerns are mounting that the trade dispute could cripple global growth, with disappointing American factory data Thursday hinting at the fragility of the expansion. After the close on Wall Street, President Donald Trump said that Huawei Technologies Co., which was put on a U.S. blacklist earlier this month, could be part of any trade pact with China.

Elsewhere, Australia’s 10-year bond yield reached another all-time low amid calls for as many as three central bank interest-rate cuts this year. Australian Dollar rose 0.3% to 0.68970, Euro remained flat and closed at 1.11814 whereas the British Pound increased 0.2% to $1.26583, the biggest increase in three weeks.


In a short run, we are expecting that AUDUSD will rebound to 0.6980 against the greenback as positive election results will bring hopes on revitalizing the Australia slowing economy. On the other hand, in a median term, with signals on further rate cuts from the RBA, the Aussie will remain under pressure where primary support would be 0.6750 against USD.

AUDUSD 4 Hour Chart



With the imminent departure of the British Prime Minister, both the Euro and Sterling are likely to remain subdued as uncertainty mounts on the future path between the EU and U.K. The Euro is seen meeting its resistance at 1.1193 and selling pressure continues to build pushing the currency down towards its primary support at 1.1100 against the greenback in the short term.

EURUSD 4 Hour Chart



Similar to the Euro, Sterling will continue to be under pressure due to the unknown fate of the Brexit deal and also its own political environment. In a short run, strong resistance is seen at 1.2800 however the currency had already encountered gusty headwind at 1.2700 which seems to be bringing the currency down further to the likely of 1.2500 level. Rebound of both the Euro and British Pound weighs heavily on the upcoming British PM policy on the economy and direction over the Brexit agenda.

GBPUSD 4 Hour Chart



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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/en/market-commentary
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