background image background image background image

NY Open: Verbal intervention guiding sentiment

Forex 4 minutes to read
MO
Michael O’Neill

FX Trader, Loonieviews.net

Summary:  Markets are trying to stabilise after a very volatile end to 2018, and a rocky start to 2019, while various officials are trying talk them into the "right" direction.


Financial markets have been rather fickle of late, particularly equities. Wall Street was in a free-fall as traders fretted about the US government shutdown, slowing global growth prospects because of the US/China trade dispute and worries that the Fed would not deviate from its rate hike path. Those fears were alleviated somewhat on Friday with a bit of hard data and a lot of hot air.

This morning, US Secretary of Commerce Wilbur Ross was putting the US/China trade talks in a positive light saying “I think there’s a very good chance that we will get a reasonable settlement that China can live with, that we can live with and that addresses all of the key issues. And to me those are immediate trade. That’s probably the easiest one to solve.” His comments followed on the heels of a Chinese government spokespersons comments that his government had “the good faith, on the basis of mutual respect and equality, to resolve the bilateral trade frictions".

GBPUSD ticked higher, rising from 1.2732 to 1.2775 supported by a UK Guardian article that the EU will offer Theresa May an “exchange of letters” to help her win the January 15 vote. EURUSD inched higher as well, supported by the earlier better than expected Eurozone Retail Sales data. EURUSD is locked inside the 1.1220-1.1500 range which has contained price action since October 23/18. US ISM non-manufacturing PMI fell to 57.6, a tad worse than the 59.0 forecast.

USDCAD dipped despite a drop in WTI oil prices from $49.27/barrel to $48.83/b since the New York open. There is significant support in the 1.3310-30 area which should contain downside moves until after Wednesday’s Bank of Canada interest rate decision and Monetary Policy Report. The modestly better than expected Canada Ivey PMI dropped USDCAD back to its overnight low of 1.3333.

Wall Street opened flat. Traders may be reluctant to get too enthused about a recovery until they get more information from the current round of US/China trade talks. The extended US government shutdown may also be taking a toll.
Chart: EURUSD 4-hour.   Source: Saxo Bank

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer)

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
London
United Kingdom

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

©   since 1992