Markets were quite uncertain after what was to be done after the UK elections and the first phase of a first-phase trade agreement between the United States and China, which would soon be formally in force. After initial optimism, traders returned to the ground with their feet, realizing that both events would not change much, so there was a quiet price movement for a few weeks that led to the last week of 2019. the past week and markets have turned against the USD, money has flowed especially towards safe shelters such as . Today, markets seem to be trading in the mood again, which seems positive as risk assets rise higher as shelters retreat.
Final production reports on Europe were released today. Data for showed a slight improvement, but production nevertheless contracted deeply. Some members of the ECB were referring to the economic recovery, after some green shoots that we saw in the data recently, but the improvement was pretty anemic, and today’s production reports show just that. There will be an upward battle that will try to turn the economy around, especially if tariffs on U.S. producers begin this year for European producers.
The European session
- Shanghai-London stock market breaks – Reuters reported that China has temporarily suspended the Shanghai-London Stock Connect system. The report cites five sources familiar with the case, saying that China has temporarily blocked the cross-border listing of the Shanghai and London stock exchanges due to political tensions with Britain over the Hong Kong issue. The Chinese Foreign Ministry said they are not aware of the specifics of the stock link suspension. No comments were made on the signing of the first phase trade agreement.
- Final production in the eurozone PMI – Today’s final production in France, Germany and the eurozone was slightly higher than at first reading, rising by 50.4, 43.7 and 47.5 points. In Italy and Spain, manufacturing activity continued to decline, with the PMI falling 47.4 points from 47.5 in November and 46.2 for Spain from 47.6 points.
- UK Manufacturing PMI – In the UK, the manufacturing industry has slipped higher than this, by 47.5 points, but it is still in recession. “The UK manufacturing sector turned worse at the end of 2019. Production fell at the fastest rate in seven and a half years as the influx of new orders and Brexit’s safety stocks declined. As demand is weak and confidence remains subdued, input buying will fall sharply and jobs will be lost for the ninth consecutive month.
The American session
- Initial Unemployment Claims of the United States – The weekly initial unemployment claims of the United States kicked in at 222,000 forints, compared to the expected 220 per thousand. The previous week was 222 thousand, but it was upgraded to 224 thousand. Continuous receivables were also higher, at HUF 1,728 thousand than the expected HUF 1,680 thousand.
- U.S. Challenger Job Opportunities – The U.S. challenger’s job vacancy in December was -25.2%, compared to 16.0% in November. The redundancies decreased to HUF 32.84 thousand, compared to HUF 44.57 thousand in November. This is another positive news for employment in the United States.
- US CB Consumer Confidence – US CB consumer confidence has just been released. Confidence is expected to jump 128.0 points among U.S. consumers. although it improved by 126.5 points from the previous 125.5, it nevertheless fell short of expectations. The current situation also improved to 170.0 points from 166.9 points last month. However, expectations fell slightly to 97.4 points from 97.9 points last month.
He is looking for vision
Bullish aud/usdAgain
- The trend lasts for more than 2 months
- Development is gaining momentum
- Provides 100 SMA support
- The stripping seems complete
100 SMA stands on the H1 chart
The AUD / USD has been rising since the beginning of this month as the USD shows a declining trend based on a weaker manufacturing report from the US ISM, which showed that the sector declined more deeply during November. The upward momentum faded, and by the third week, the pair had stepped back lower. But sentiment continued to improve after the U.S. and China agreed on a first-phase deal, helping with risk instruments such as stock exchanges and staples.
Last week, the USD plunged lower before the new year, and as a result, the AUD / USD rose even more for about a week. Today, however, we are experiencing a retreat in this pair as the USD finally finds some bids. But 100 SMA (green) kept the decline in the H1 chart, and this pair had previously jumped from this moving average. The price isn’t exactly running out after the rebound, which has given us some time to open a buy signal now, in the hope that the trend will continue soon.
In conclusion
After trading the dollar last week, as traders adjusted their positions for the new year and multinationals moved cash where they needed it, markets returned to the mood to trade. The report that China has temporarily suspended the Shanghai-London Stock Connect system has slightly worsened the mood, leading to a decline in risk assets.