Varengold Bank Research Team
Varengold Wertpapierhandelsbank AG
Good morning from beautiful Hamburg and welcome to our latest Daily FX Report. Deutsche Bank is studying the potential impact of Britain’s exit from the European Union on the firm’s business in the country and weighing options that may include moving activities to its home nation. Germany’s biggest bank this month formed a working group that comprises senior executives from Deutsche Bank’s strategy, risk and U.K. management teams, a spokesman for the lender said late Monday. Prime Minister David Cameron, whose Conservative Party won a surprise majority in the Mai 7 election, has promised a referendum on EU membership by the end of 2017. Deutsche Bank has had a presence in Britain since 1873 and employs 9,000 people in the country.
Anyway, we wish you a successful trading day!
Market Review – Fundamental Perspective
The United States dollar jumped from a four-month low on speculation that the U.S. economy will rebound from a sluggish first quarter. The major currency climbed by the most in five weeks, snapping a four-day loss against the euro, before the release of U.S. housing and manufacturing data later this week. Improving indicators would bolster the case for the Federal Reserve to raise interst reates for the first time in more than a decade. The Bloomberg Dollar Spot Index, which tracks the greenback versus 10 major trading partners, rose 0.9 percent to 1,160.14 as of 5 p.m. in New York. The index had fallen for the past five weeks, its longest decline since October 2013. The U.S. currency rose 1.2 percent to $1.1315 per euro, reaching the biggest gain since April 9. It climbed 0.6 percent to 119.99 yen. The Fed will release minutes of April’s Federal Open Market Committee meeting on Wednesday, which may include clues about when the central bank may increase interest rates for the first time since 2006. The greenback rose 21 percent from July to April on speculation the Federal Reserve was moving closer to raising borrowing costs, contrasting with the European Central Bank and other global counterparts that were easing policy. Since then, the U.S. currency has shed 5.1 percent. The Dow Jones Industrial Average topped its all-time high Monday, adding 0.2 percent to 18,298.88, above a March 2 record. The S&P 500 fell as much as 1.8 percent from its April 24 record through May 6, before rallying 1.1 percent on Thursday to close at a fresh high. Gains Friday gave the gauge its first back-to-back weekly advances since April 10.
Daily Technical Analysis
AUD/CAD (Daily)
The Australian dollar versus the Canadian dollar is traded in a range since last year. Now the price touched the downward trendline the 3rd time and is interesting for bulls and bears. The MACD Indicator and both Exponential Moving Average’s showing the same development in price action. Both turned to long. This direction will be confirmed if the price break’s through the trendline significant.
Support & Resistance (Daily)
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Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.