AETOS daily forex market commentary

ASIC and FCA licensed Retail FX broker AETOS Capital Group have provided their daily commentary on traditional markets for May 29, 2019. 

EURUSD

The Euro closed lower on Tuesday, closing at 1.1166(-27 pips) against the greenback. The greenback surged on the back of positive data from the CB Consumer Confidence Index up in May to 134.1 following an increase in April of 129.2. Lingering tensions between the US and China added to the dollar’s strength, following the latest comments from US President Trump, who announced Monday that the country is not ready to make a deal with China.

European stocks closed in the red, while US indexes trimmed most of their early gains ahead of the close amid the prevailing risk-off mood. Germany released the GFK Consumer Confidence Survey, which resulted at 10.1 in June, from a downwardly revised 10.2 in May. The country’s Import Price Index increased just modestly in April, up by 0.3% MoM and by 1.4% YoY. On Wednesday, the macroeconomic calendar won’t include relevant data coming out from these two currencies.

EURUSD 4 Hour Chart

In the 4 hours chart, the pair broke below its moving averages, with the 20 SMA(Blue Line) advancing and the 100 SMA(Magenta Line), both converging around the 23.6% retracement of the same advance at 1.1190, the immediate resistance. Technical indicators have extended their declines, entering negative ground, all of which skews the risk to the downside and favors a re-test of the multi-year low at 1.1106.

GBPUSD

The cable pair fell to 1.2657(-13 pips) against the greenback. Sterling remains under selling pressure amid political turmoil correlated to Brexit and the upcoming election of a PM.

Speculation that May’s replacement won’t hesitate to pull the UK out of the EU even without a deal continues increasing, following comments from different UK politicians. Among those, Irish PM Leo Varadkar said that there was a growing risk of a no deal Brexit, while Trade Minister Fox earlier today said that it would be unfortunate if the EU didn’t want to negotiate changes to the Brexit deal, to which EU’s Junker responded that there won’t be a renegotiation of the withdrawal agreement. PM May, though her spokesman, reiterated that a no-deal Brexit was still the “legal default.” Late in the US afternoon, UK PM candidate, Esther McVey, said that the only way to deliver the referendum result is to embrace leaving without a deal.

GBPUSD 4 Hour Chart

In the shorter term, and according to the 4 hours chart, the pair was unable to recover above a flat 20 SMA(Blue Line), while the 200 EMA(Green Line) heads south far above the current level. The Momentum indicator lacks directional strength just below its mid-line, while the RSI indicator keeps declining, currently at 38, skewing the risk toward the downside.