Forex Today: Risk-on in play amid trade progress, a quiet session ahead

Markets cheered the renewed optimism induced by the US-China trade progress, boosting the appetite for the risk assets across the financial markets in Asia. Across the fx space, broad-based US dollar weakness remained the underlying theme, as weaker US fundamentals and risk-on trades weighed negatively. Meanwhile, the Antipodeans tracked the gains in the Chinese Yuan, oil and gold prices. The Kiwi emerged the top gainer this session, as the sentiment around the New Zealand dollar was further boosted by upbeat New Zealand January services PMI report. The Yen bulls stood resilient to the risk-on flows, keeping the USD/JPY range-bound around the 110.50 levels.

The Asian equity markets picked-up strength and rallied near 2%, led by the sharp gains in the Chinese stocks. Meanwhile, both crude benchmarks traded firmer, with WTI hovering near 3-month tops while Brent oil traded near 66.50 levels. Gold prices on Comex are on thier way to test the YTD highs of 1326 amid softer dollar and dovish Fedspeak.

Main Topics in Asia

Fed to keep rates unchanged until December - JP Morgan

Australia to fast-track UK trade pact on no-deal Brexit: FT

France denies it has softened stance on Brexit - Reuters

Canada’s Freeland: USMCA is concluded, tariffs must be removed

Survey: UK businesses plan to raise pay by most since 2012 - Reuters

China's State Media: Endless US-China trade negotiations are making a final sprint - CNBC

ECB’s Rehn: Most recent data point to weakening economy

New Zealand PM Arden: Relationship with China `robust and mature'

US Commerce department sends White House report on autos tariff probe - Reuters

USD/INR Technical Analysis: Bounced off ascending trendline

Key Focus Ahead

We have a quiet start to a busy week ahead, with no first-tier macro news from both the Eurozone and UK docket while the risk trends amid US-China developments will continue to drive the sentiment across the fx board. Low volumes and minimal volatility may prevail in the day ahead, as both the US and Canadian markets are closed today in observance of their respective holidays.

However, Germany’s central bank, the Bundesbank, monthly economic assessment report will be eyed at 1100 GMT, given the recent weakness in the Eurozone economy.

EUR/USD: Trade optimism could bode well for EUR, focus on Tuesday's close

Essentially, EUR/USD created a long-legged doji candle, which is widely considered a sign of bearish exhaustion/indecision. A bullish trend reversal, however, would be confirmed only if the spot closes tomorrow above 1.1307 (high of Friday's doji candle). 

GBP/USD rises to 1.2920 as UK PM May again heads for Brussels

GBP/USD trades around 1.2920 ahead of London open on Monday. 1.2930 and 1.2980 can act as immediate resistances with 1.2840 likely being nearby rest.

Gold Technical Analysis: Nears YTD high of $1,326, weekly RSI highest since September 2011

Gold is fast closing on a year-to-date high of $1,326 reached on Jan. 31 and may break higher toward $1,354 (100-month moving average) if trade optimism continues to hurt the US dollar. 
RBA minutes to reveal some of the downside risks - ANZ

Analysts at Australia and New Zealand Banking Group (ANZ) offer a brief preview of what to expect from Tuesday’s Reserve Bank of Australia (RBA) minutes release of its February monetary policy meeting.

Week Ahead: Productive US-China trade talks support risk appetite - for now

The economic calendar looks a tad quieter next week in comparison to this week, although this does not necessarily mean less volatility, as Chinese and US official continue their trade negotiations in Washington.