4 July: US$ soft as risk-sentiment improves as China stocks rally, political woes in Germany subside. US holiday today.

By | July 4, 2018

 

While stocks have been choppy, with the US indices down around 0.5%, the US$ is also a little lower at the end of Tuesday trade as risk aversion eased. The news that Angela Merkel averted an immediate political crisis in Germany helped the Euro out although the late rally in Chinese stocks, yesterday, provided more broad based support, underpinning commodities as well as the commodity bloc currencies which benefited by rallying sharply in early European trade and holding on to most of their gains for the rest of the day. Sterling also had a better day because the construction PMI came in at 53.1 in June, up from May’s 52.5, better than forecast and the fastest rate of growth in seven months. In other markets, Gold had a sharp $20 rally, while WTI settled slightly higher, after a volatile session, as traders watched for the prospect of fresh supply flooding the market, offsetting ongoing disruption in Canada, Libya and Venezuela, after Saudi Arabia agreed to Donald Trump’s demand to pump more oil to stabilise the market.

Wednesday will be the US July 4, Independence Day holiday so liquidity will be thin later in the session. Before then, Australia will see the May Retail Sales (exp +0.3%mm) and the Trade Balance (exp +$1,200 mio), while the global Services/Composite PMIs are also due, beginning in Asia with Australia, Japan and the Caixin figure from China. The EU will also look to the PMIs for guidance but it will then become very thin, meaning we are likely to see a sideways session, I suspect.

CURRENCIES
EURUSD: 1.1657
Res  1.1670  1.1690  1.1720
Sup  1.1635  1.1615  1.1590
USDJPY: 110.57
Res  110.80  111.15  111.40
Sup  110.30  110.00  109.70
GBPUSD: 1.3191
Res  1.3215  1.3235  1.3255
Sup  1.3170  1.3145  1.3115
USDCHF: 0.9925
Res  0.9950  0.9965  0.9990
Sup  0.9910  0.9890  0.9855
AUDUSD: 0.7386
Res  0.7405  0.7425  0.7445
Sup  0.7370  0.7345  0.7310
NZDUSD: 0.6752
Res  0.6790  0.6825  0.6860
Sup  0.6715  0.6685  0.6650
INDICES / COMMODITIES
S&P: 2712
Res  2725  2735  2745
Sup  2705  2695  2685
DJ30: 24143
Res  24300  24440  24560
Sup  24060  23970  23860
SPI200.fs: 6148
Res  6165  6185  6200
Sup  6135  6115  6100
XAUUSD: 1252.60
Res  1255  1260.  1265
Sup  1245  1240  1235
XAGUSD: 16.00
Res  16.15  16.30  16.45
Sup  15.90  15.75  15.50
WTI.fs: 74.24
Res  74.45  75.20  76.00
Sup  73.40  72.75  72.20