Forex Today: Yen, Gold boosted by Libyan political woes; a light session ahead
Monday’s Asian trading session witnessed increased demand for the safe-havens such as the Yen, gold and the Swiss franc amid escalating geopolitical tensions concerning the Libyan capital, Tripoli. The higher-yielding Asian equities, Treasury yields and the US equity futures gave up early gains and turned south amid souring risk appetite.
Across the fx space, the USD/JPY pair failed once again near 3-week tops and dropped sharply to 111.30 region while the Antipodeans remained on the back foot amid risk-off trades. However, the losses remained cushioned by a broad-based rally across the commodities and the US-China trade optimism. Both crude benchmarks cheered Libyan political unrest and traded near multi-month tops, driving the Loonie higher. Meanwhile, gold prices on Comex regained the 1300 barrier. Copper futures on Comex also rallied to 2.91 levels.
Among the European currencies, both the Euro and the GBP attempted a bounce amid a broadly weaker US dollar, as markets took profits on the recent USD rally following Friday’s upbeat NFP data and ahead of the FOMC minutes release due later in the week ahead.
Main Topics in Asia
Theresa May facing intense cabinet pressure - The Guardian
China’s Gold reserves increased for fourth month with +11.2 tons addition in March
Italy will probably raise its 2020 budget deficit goal to around 2.1 percent of gross domestic product - Reuters
Brexit: Macron wants tough conditions on Brexit delay - FT
BoJ's Kuroda: Japan's economy expanding moderately – RTRS
US Sec. of State Pompeo urges Libyan National Army to stop its offensive on Tripoli
US Pres. Trump: “We will have no other choice than to Close the Border and/or institute Tariffs”
The CRB has just hit the 50% retracement of the late May 2018 highs to late Dec swing lows
IMF: Australia's housing market contraction is worse than first thought
China’s NDRC to relax residency curbs in some cities this year
Odds of a no deal Brexit slashed from 15% to 10% - Goldman Sachs
Key Focus Ahead
Markets look forward to a data-light start to a big week ahead, as Monday’s macro calendar offers a batch of second-liner economic releases from both sides of the Atlantic. In early European trading, traders see the release of the German trade and current account data at 0600 GMT, followed by the Eurozone Sentix Investor Confidence numbers slated for release at 0830 GMT.
In the NA session, the Canadian housing starts and building permits data will be published at 1215 GMT and 1230 GMT respectively while the US factory orders will drop in at 1400 GMT and are expected to drop by 0.6% m/m in February vs. +0.1% last.
EUR/USD testing daily highs near 1.1230 ahead of Sentix
The shared currency has started the week on a positive note and is now lifting EUR/USD to fresh session tops near 1.1230 ahead of the opening bell in the Old Continent. Moving forward, German Trade Balance figures are due later seconded by the Sentix Index for the current month.
GBP/USD recovers 50+ pips as USD decline supersedes Brexit worries
While early-day profit-booking is already fuelling the GBP/USD pair, an expected decline in the February month US factory orders by -0.6% from +0.1% could add further strength into the buying sentiment.
Gold Technical Analysis: Repeated upside failures, Bears to target a break of 1275
Daily stochastics are below 20 and RSI is neutral. Bears need to get below the 1280 level, which is feasible should price remain below 1307 and the 38.2% Fibo confluence of Feb support and resistances.
GBP/USD Forecast: Brexit becomes binary with either a long with a long extension or plunging on a hard exit
The primary event of the week is the emergency EU Summit on Wednesday, April 10th. The baseline scenario at the time of writing is that the EU will go with Tusk's plan, allowing enough time for the UK to sort itself out.