Forex News Analysis by LiteForex

Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair is stable and is trading near local highs of early May, renewed yesterday. On Monday, EUR was growing steadily, as investors got rid of long USD positions amid the development of a new crisis in Washington and Beijing relations. They began to escalate after US President Donald Trump repeatedly accused China of hiding information about the threat of coronavirus. Last weekend, White House adviser Peter Navarro sharply criticized the PRC and reproached the government for not restricting the movement of its citizens outside the country in time, which contributed to the rapid spread of the epidemic in the world. On Tuesday, European investors are focused on the publication of data from the ZEW Research Institute on business sentiment in Germany and the EU, as well as on the meeting of the Council of Ministers of Finance and the EU Economy.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing within the correction, retreating from the lows of March 26, renewed against the backdrop of a steady decline in the instrument throughout the past week. Yesterday's positive dynamics was due to technical factors of the correction of the American currency, while the pound remained under pressure against the backdrop of deterioration in the prospects for the British economy. Investors sharply negatively reacted to the statement of the Bank of England representative Andrew Haldane, who noted that the regulator is considering the idea of ​​introducing negative interest rates. Earlier, the head of the Central Bank, Mark Carney, officially rejected such an idea. On Tuesday, investors expect the publication of March information on the dynamics of the UK labor market over the past 3 months.

AUD/USD

Today, during the Asian session, the AUD/USD pair shows ambiguous dynamics, trading near the opening level at 0.6523. The instrument keeps a “bullish” momentum generated yesterday due to the strengthening of correctional sentiment in the US currency but there are no new growth drivers yet. The published protocol of the RBA meeting did not help clarify the situation on the market, and investors fear the most decisive actions from all the world's leading regulators. However, optimism is present on the market due to the gradual abolition of restrictive measures that give hope for the restoration of industrial activity in all regions. In China, despite the aggravation of trade relations with the USA, industrial activity is growing, which leads to the growth of the import of the raw materials.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing moderately, keeping the flat nature of trading in the short term. Despite the rather poor position of the US currency, investors are actively selling the yen amid the publication of disappointing macroeconomic data from Japan, which indicates the plunge of the economy into recession for the first time since 2015. According to today's publications, industrial production in March fell by 3.7% MoM and 5.2% YoY, which coincided with market expectations. The percentage of capacity utilization for the same period fell by 3.6%, while analysts expected a slighter decrease, by 0.2%.

XAU/USD

Today, during the Asian session, gold prices are rising moderately, consolidating after a sharp decline yesterday, which replaced the increase, due to which gold has renewed its record highs since October 2012. The instrument is still supported by rumors about possible negative interest rates by the Fed. However, while the American regulator does not confirm this information and officially considers such measures less effective than what it currently has. US housing market data for April will be released on Tuesday. Also, during the day, the head of the US Federal Reserve Jerome Powell will speak in Congress.

Morning Market Review

EUR/USD

EUR shows moderate growth against USD during today's Asian session, continuing to develop an upward momentum, which led to the renewal of local highs from May 4. The instrument adds about 0.19% and is actively testing the level of 1.0940 for a breakout. The euro is supported by the announced plan to support the European economy. Germany and France have reached a consensus on the formation of a fund for economic recovery in the amount of EUR 500B. The countries most affected by the crisis will be able to receive grants from this fund, while the debt burden will equally fall on all countries of the block, since the fund will be filled through the EU budget. Additional support for EUR was provided by data from the ZEW Institute. ZEW Economic Sentiment in Germany in May rose significantly from 28.2 to 51 points, which was significantly better than market expectations of 32 points.

GBP/USD

GBP shows the flat dynamics of trading during today's Asian session, maintaining a "bullish" sentiment from the beginning of the current week. GBP is supported by rather optimistic market sentiment regarding the gradual completion of the period of restrictive measures, which contributes to increased demand for risk. More confident growth of GBP is hindered by extremely poor macroeconomic statistics from the UK, published on Tuesday. In April, Claimant Count Change jumped from 12.1K to 856.5K, while analysts had expected growth to 150–200K. Average Earnings Including Bonus slowed down from 2.8% 3MoY to 2.4% 3MoY, which also turned out to be worse than market expectations of 2.7% 3MoY. In March, ILO Unemployment Rate fell from 4% to 3.9% 3M, which turned out to be better than market forecasts suggesting an increase to 4.4%. Today, British investors are focused on the statistics on Retail Price Index and consumer inflation for April.

NZD/USD

NZD is showing steady growth against USD during today's Asian session, trading near local highs, updated the day before. The instrument adds about 0.50% and is trying to consolidate above 0.6100. The gradual lifting of quarantine restrictions around the world has a positive effect on the dynamics of NZD, which is counting on the restoration of world trade. In particular, the most notable recent support is provided by news from China, which, however, is overshadowed by rising trade tensions between Beijing and Washington. The macroeconomic statistics from New Zealand published recently was contradictory. Producer Price Index Out in Q1 2020 showed a slowdown from +0.4% QoQ to +0.1% QoQ despite the expected growth to +0.7% QoQ. Producer Price Index Input for the same period decreased by 0.3% QoQ after growth by the same amount a month ago.

USD/JPY

USD is stable against JPY during today's morning session, trading near the local highs since April 13, updated the day before. JPY is losing to USD in the battle for the title of safest asset in recent days amid the publication of weak macroeconomic statistics, which indicates the onset of a recession in the Japanese economy. However, American statistics can hardly be called more optimistic. During today's Asian session, Japan managed to somewhat surprise investors with its releases. Machinery Orders in March fell by 0.4% MoM after an increase of 2.3% MoM. Analysts expected a much more significant drop in volumes by 7.1% MoM. In annual terms, the indicator even reduced its decline from –2.4% YoY to –0.7% YoY with a negative forecast of –9.5% YoY.

XAU/USD

Gold prices show a slight increase during today's Asian session, continuing the development of the "bullish" trend, which received a new impetus for development on Tuesday. Demand for the asset is supported against the backdrop of continuing uncertainty around the prospects for recovery in the global economy. In addition, the instrument is supported by a rather weak USD against the background of discussing the expansion of economy support program in the US Senate. However, investors are optimistic about the gradual lifting of restrictions, as well as interested in news regarding the development of a vaccine against coronavirus.

Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair is correcting, retreating from local highs of May 1, renewed yesterday. The decrease is due to technical factors, as investors are cautious against the background of a high level of uncertainty in the market. Yesterday, published macroeconomic statistics from the EU strengthened the "bearish" sentiment. So, the consumer price index for April slowed down from +0.5% MoM to +0.3% MoM, which coincided with the expectations of traders. In annual terms, the indicator decreased from +0.4% YoY to +0.3% YoY, while it was predicted that the previous value of +0.4% YoY will maintain. At the same time, the May level of consumer confidence slightly increased from –22 to –18.8 points, while forecasts assumed its further decrease to –24 points. On Thursday, investors focused on business statistics from Markit in Germany, France, and the EU in May.

GBP/USD

Today, during the Asian session, the GBP/USD pair is falling, retreating from the local highs, renewed last Tuesday. Now, the pound is trying to consolidate below 1.2200, waiting for new drivers. On Wednesday, a large number of UK key statistics entered the market. In April, the consumer price index fell by 0.2% MoM, which was below market expectations of –0.1% MoM. In annual terms, the indicator slowed down from +1.5% YoY to +0.8% YoY, also being worse than expected. On Thursday, investors focused on Markit data on business activity in the manufacturing and services sectors for May. Analysts expect a moderate increase in indicators, so the instrument can win back part of the morning loss.

AUD/USD

Today, during the Asian session, the AUD/USD pair is falling within the correction, retreating amid the widespread strengthening of the US currency. Market optimism declined after the media criticized Moderna’s recent press release, saying it had made significant headway in creating a coronavirus vaccine. Australia's macroeconomic statistics released on Thursday was ambiguous. So, the PMI in the manufacturing sector from Commonwealth Bank for May fell from 44.1 to 42.8 points against the forecast of growth to 46.5 points. A similar indicator in the service sector increased from 19.5 to 25.5 points, while the composite index for May rose from 21.7 to 26.4 points.

USD/JPY

Today, during the Asian session, the USD/JPY pair is strengthening, recovering from the “bearish” trading on Wednesday. Positions of the American currency are growing across the entire spectrum of the market; however, there are still few fundamental reasons for such dynamics. It is worth noting only a slight decrease in optimism about the imminent invention of the vaccine after the report of the biotechnological company Moderna was subjected to extensive criticism in the media. Japanese macroeconomic statistics released on Thursday was ambiguous. Thus, export volumes in April decreased by 21.9% YoY, which was only slightly better than the expected decrease of 22.7% YoY. Imports for the same period fell by 7.2% YoY against expectations of –12.9% YoY. The total trade balance in April reached the level of –930.4B yen, which was significantly lower than the forecast assuming a surplus of 67.4B yen. Jibun Bank's manufacturing PMI fell from 41.9 to 38.4 points.

XAU/USD

Today, during the Asian session, gold prices are falling, retreating after two sessions of slight growth. Pressure on the instrument is exerted by the rising dollar, which again interested investors amid declining optimism in the market. The instrument is positively influenced by the continued expectations of new support measures from the leading Central Banks of the world, as well as the general negative mood of the market regarding the prospects for a quick recovery of the global economy. On Thursday, traders are focused on the publication of Initial Jobless Claims data for the week of May 15. Analysts expect a slight slowdown from the previous value of 2981K to 2400K, which may support the dollar. At the end of the day, Fed Chairman Jerome Powell will speak, which may shed light on new measures to support the US economy.

Morning Market Review

EUR/USD

EUR declines against USD during today's Asian session, developing a correctional impulse that formed yesterday, when EUR retreated from its local highs since the beginning of May. In addition to purely technical factors, pressure on the instrument was exerted by Thursday's US macroeconomic statistics, which increased investor interest in safe assets. The number of Initial Jobless Claims in the US for the week ending May 15 increased by 2.438M after an increase of 2.687M in the previous period. Analysts had expected an increase of 2.400M. In turn, the statistics on business activity from Markit in Europe turned out to be very optimistic. Markit PMI Composite in May rose sharply from 13.6 to 30.5 points, which was significantly better than market expectations of 24 points. Today, investors are awaiting the publication of the ECB meeting on monetary policy, as well as the speech by the representative of the European regulator Philip Lane.

GBP/USD

GBP maintains a weak downtrend against USD during today's morning session, maintaining a flat trend in the short term. The instrument is testing the level of 1.2200 for a breakdown. GBP is under pressure from the prospect of introducing negative interest rates by the Bank of England, which has been actively discussed by investors recently. Thursday's macroeconomic statistics from the UK turned out to be ambiguous. Markit Manufacturing PMI in the UK rose from 32.6 to 40.6 points, which turned out to be better than market expectations of 36 points. Markit Services PMI rose from 13.4 to 27.8 points, which also exceeded expectations of 25 points. At the same time, CBI Industrial Trends Survey on Production Orders in May showed a decrease in volumes from –56 points MoM to –62 points MoM, while the forecast assumed a decrease only to –59 points.

NZD/USD

NZD is showing a slight decline against USD during today's morning session. The instrument is trying to consolidate below 0.6100, under pressure from the correctional sentiment in USD. Additional pressure on NZD is exerted by ambiguous macroeconomic statistics from New Zealand. Retail Sales excluding Autos in Q1 2020 increased by 0.6% QoQ after a decrease of 0.1% QoQ in the previous quarter. The overall Retail Sales for the same period collapsed by 0.7% QoQ after zero dynamics of the previous period. The growth in demand for USD is also facilitated by the fact that relations between the USA and China are aggravating. Donald Trump continues to actively accuse Beijing of spreading the coronavirus pandemic, which significantly reduces the prospects for consensus between the parties in the second round of trade negotiations.

USD/JPY

USD declines slightly against JPY during today's morning session, while maintaining the flat nature of trading in the short/ultra-short term. On Friday, Japanese investors are focused on the Bank of Japan decision on interest rates, as well as information on the dynamics of consumer inflation in April. As expected, the Japanese regulator kept the key rate at the previous level of –0.1%, noting the presence of significant risks for the economy due to the widespread introduction of restrictive measures. National Consumer Price Index in April slowed down from +0.4% YoY to +0.1% YoY. National CPI excluding Fresh Food for the same period fell by 0.2% YoY after rising by 0.4% YoY in March. Analysts had expected negative dynamics at –0.1% YoY.

XAU/USD

Gold prices are relatively stable during today's Asian session, consolidating after an active decline yesterday, which was caused by positive dynamics in USD and the growth of optimistic sentiments regarding the global economic recovery. The US data on business activity in the manufacturing and services sectors in May added some optimism to the market, although traders were somewhat cautious about the publication of information on the dynamics of Initial Jobless Claims. In turn, demand for gold remains high amid expectations of new measures to support the economy by leading global financial regulators. In addition, the confrontation between the US and China, which threatens to destroy the previously reached trade agreement, adds to the market’s uncertainties.

Morning Market Review

EUR/USD

EUR shows a slight decrease against USD during today's Asian session, continuing to develop a "bearish" momentum formed at the end of last week, when EUR retreated from its highs since the beginning of the month. Investors are again inclined to buy a "safe" USD amid worsening relationships between the US and China, which threaten to cross out all the progress made earlier in the framework of the signed trade agreement. Last week, the US Senate approved a bill according to which Chinese companies that cannot prove their independence from the government may lose access to US stock exchanges. Investors are focused on macroeconomic statistics from Germany today. The finalized data on the dynamics of GDP in Germany for Q1 2020 will be published, as well as statistics on the level of business optimism from the IFO in May.

GBP/USD

GBP shows the flat dynamics of trading against USD during today's morning session. Low investor activity is due to a bank holiday in the UK and US markets on Monday. At the same time, GBP remains slightly downward, as Friday's macroeconomic publications from the UK turned out to be negative. Retail sales in April decreased by 18.1% MoM and 22.6% YoY, which turned out to be worse than market expectations of –16% MoM and –22.2% YoY. Retail sales excluding fuel for the same period decreased by 15.2% MoM and 18.4% YoY, which also did not meet forecasts. Gfk Consumer Confidence index fell from –33 to –34 points in May.

NZD/USD

NZD shows a slight increase against USD during today's Asian session, again testing 0.6100 for a breakout. US markets are closed on Monday due to Memorial Day, so NZD is gaining momentum for a minor correction. Meanwhile, it is worth noting that the currencies of the commodity block are still under pressure from a sharp deterioration in relations between the US and China. Donald Trump, who has repeatedly accused official Beijing of hiding information on the coronavirus, has moved to action. Last week, the Senate approved a bill restricting Chinese companies from accessing the US stock market. Next in line is a law that provides for the introduction of new sanctions against China, if the latter introduces a previously announced bill to protect national security in Hong Kong.

USD/JPY

USD strengthens slightly against JPY during today's Asian session, continuing the development of a flat trend in the short/ultra-short term. Activity on the market on Monday remains low due to markets closed in the USA on the occasion of Memorial Day. Investors continue to analyze statistics on consumer inflation from Japan published last Friday. National Consumer Price Index in April slowed down from +0.4% YoY to +0.1% YoY. National CPI excluding Fresh Food for the same period went to the negative zone amounting to –0.2% YoY after rising by 0.4% YoY in March. The data released today was contradictory. Coincident Index in March fell from 90.5 to 90.2 points. Leading Economic Index for the same period strengthened from 83.8 to 84.7 points.

XAU/USD

Gold prices are slightly reduced during the morning trading session, offsetting the positive results of last Friday. At the end of last week, the instrument managed to demonstrate a positive trend, as investors again focused on the disappointing prospects for a global economic recovery, especially against the backdrop of a sharp aggravation of relations between the US and China. Additional support for gold is provided by the expectations of new incentive measures from the world's leading financial regulators. Last week, Fed Chairman Jerome Powell noted that the regulator is considering providing credit to additional borrowers.

Morning Market Review

EUR/USD

Today, during the Asian session, the EUR/USD pair is growing moderately, recovering from a decline at the end of the last trading week and yesterday's ambiguous dynamics. Some support for the euro is provided by macroeconomic data released in Germany yesterday, which confirmed investors' hopes for a recovery in economic activity in the region. Thus, the German business optimism index from the IFO for May rose from 74.2 to 79.5 points, which was even better than analysts' forecasts of 78.3 points. The economic expectations index for the same period strengthened from 69.4 to 80.1 points against the forecast of 75 points. Only the indicator for assessing the current situation was worse than expected. The indicator for May fell from 79.4 to 78.9 points, while the market was counting on its growth to 80 points.

GBP/USD

Today, during the Asian session, the GBP/USD pair is growing, recovering from the predominantly “bearish” dynamics of trading at the end of the last trading week. Demand for the pound is supported by growing optimism about the prospects for global economic recovery, as many countries are gradually lifting the previously imposed restrictions due to the COVID-19 epidemic. Investors also positively assess the idea of ​​creating a European fund, from which the most affected sectors of the bloc’s economy are supposed to be financed. On the other hand, the aggravation of relations between the USA and China, as well as the vague future of trade negotiations between the EU and the United Kingdom does not allow the instrument to form a stable upward trend even in the short term.

NZD/USD

Today, during the Asian session, the NZD/USD pair is growing, continuing to develop a poor “bullish” impulse that formed yesterday. Now the instrument has added about 0.45% and is testing the level of 0.6130 for a breakout. NZD grows against a downward correction of USD, which came under pressure after a sharp deterioration in relations between the US and China. Yesterday in Hong Kong, protests against the Chinese intellectual property law flared up again. The US is opposed to the adoption of this law. A day earlier, Washington imposed additional sanctions against 33 Chinese companies, accusing them of violating human rights and freedoms.

USD/JPY

Today, during the Asian session, the USD/JPY pair is growing, developing a poor uptrend in the short term. Now, the instrument is testing the level of 108.00 for a breakout, adding about 0.19%. Despite the corrective sentiment on the US dollar, it moves quite confident against the Japanese yen. It is partly due to today's publication of poor macroeconomic statistics from Japan. Thus, the activity index in all sectors for March fell by 3.8% MoM after falling by 0.7% MoM for February, although analysts expected zero dynamics. Corporate services prices for April slowed down from +1.6% YoY to +1.0% YoY, which also did not meet investors' forecasts of +1.9% YoY.

XAU/USD

Today, during the Asian session, gold prices are growing slightly, correcting after the “bearish” dynamics on Monday. The instrument is supported by increased geopolitical tensions after the media got information about new protests in Hong Kong. Recently, markets have been actively discussing the US-China confrontation, which began with Washington’s accusations of Beijing hiding true information about the coronavirus. Later, US President Donald Trump turned to more general claims, and as a result, the United States imposed new sanctions against 33 Chinese companies, suspecting them of violating human rights and freedoms in China. Investors fear that the current crisis in relations between the two countries will erase all the progress achieved earlier in the framework of trade negotiations, and will also slow down the global economic recovery after the COVID-19 pandemic.

Morning Market Review

EUR/USD

EUR declines against USD during today's Asian session, correcting after yesterday's active growth, which again pushed EUR to the area of 20-day highs. The situation on the market remains ambiguous. On the one hand, optimism about the gradual lifting of quarantine restrictions contributes to the growth of risky currencies; on the other hand, investors are afraid of the second wave of the epidemic, as well as the extremely long and painful process of restoring the world economy to previous levels. Uncertainties are also added to the market by the deterioration of US-China relations, which threatens a new round of trade war. Today, European investors are focused on the speech of the head of the ECB Christine Lagarde, who is likely to touch on the prospects for recovery of the European economy and may reveal the regulator’s plans for monetary policy in the near future.

GBP/USD

GBP is stable against USD during today's morning session, consolidating near the local highs since May 12, updated the day before. GBP is supported by improved prospects in the global economy amid weakening quarantine in many countries, which helps to restore demand for risk. However, further growth of GBP is hindered by uncertain prospects regarding trade negotiations between the UK and the EU. Given the current situation, progress in resolving critical issues could not be achieved; meanwhile, the deadline for extending the Brexit transition period expires already in June, and Boris Johnson’s voiced position on this issue does not change. British investors also fear the possible introduction of negative interest rates, which has been quite actively discussed recently not only by the British regulator.

AUD/USD

AUD shows ambiguous trading dynamics during today's Asian session, consolidating after active growth on Tuesday, which allowed the instrument to update its highs since March 9. The improvement in market sentiment caused by the gradual weakening of quarantine supports the demand for the commodity currencies; however, investors still show increased caution, which is fraught with frequent corrective movements. Macroeconomic statistics from Australia published on Wednesday turned out to be rather optimistic, but still did not have a significant impact on the dynamics of the instrument. Construction Work Done in Australia in Q1 2020 decreased by 1% QoQ after a decrease of 3% QoQ in the previous period. Analysts had expected a decrease of 1.5% QoQ.

USD/JPY

USD is stable against JPY and again shows the flat dynamics of trading during today's Asian session. The approximate parity of the instrument indicates a still high demand for safe assets and weak trust of traders in investments. At the beginning of the week, Japan lifted the previously introduced state of emergency, but fears of the second wave of the epidemic still persist. In addition, the head of the Bank of Japan Haruhiko Kuroda said that the regulator is considering the possibility of changing interest rates, if required by the economic situation in the country. No interesting macroeconomic statistics from Japan is expected on Wednesday, so investors are likely to focus on US data. It is worth paying attention to the publication of Richmond Fed Manufacturing Index for May, as well as the release of a monthly economic review from the US Fed, the Beige Book.

XAU/USD

Gold prices are falling amid a gradual recovery in risk demand due to weakening quarantine. During today's Asian session, asset quotes approached the level of 1700.00, below which the instrument was last traded on May 13. At the same time, geopolitical risks, which intensified with the new trade conflict between the USA and China, still keep gold near record highs. In addition, new support measures from leading global financial regulators, up to the introduction of negative interest rates in some countries, should not be ignored.

EUR/USD

Today, during the Asian session, the EUR/USD pair shows ambiguous trading dynamics, trying to consolidate above the psychological level of 1.1000, where the instrument managed to rise for the first time in three months. The course is supported by the EU proposal to create a restoration fund in the amount of 750B euros, which Germany and France had previously actively called for. It is anticipated that the most affected countries of the bloc will be financed from this fund, which certainly cannot do without additional support, given the current difficult situation. However, there are enough opponents of this idea, so for now there are only general concepts of the fund. On Thursday, investors are focused on the publication of statistics on consumer inflation in Germany, as well as a block of May data on business sentiment in the EU.

GBP/USD

Today, during the Asian session, the GBP/USD pair is consolidating after yesterday's decline, which was formed under the influence of growing rumors about the Bank of England's negative interest rates. Also, investors are concerned about the lack of progress in the UK-EU negotiations on Brexit. Yesterday, it became known that the British side still opposes the extension of the transaction deadline, which practically leaves no chance for a positive outcome of the negotiations, given the existing differences. The current negotiation deadline expires in December 2020, and if no agreement is reached by this time, the UK may leave the EU without a deal.

AUD/USD

Today, during the Asian session, the AUD/USD pair is moderately falling, continuing the development of the “bearish” impulse formed yesterday. Now, the instrument has lost about 0.17% and is actively testing the level of 0.6600 for the breakdown. The optimism of the markets regarding the gradual lifting of quarantine restrictions changes to alarming sentiments regarding the prospects for a global economic recovery. Investors are also concerned about the sharp increase in tension in US-China relations, which threatens to nullify the preliminary results achieved in the framework of trade negotiations. Today’s speech by the head of the RBA, Philip Lowe, had virtually no effect on the position of the Australian currency. Lowe's speech was of a generalizing informational character and did not pursue any specific goals. The official only noted that the March support package has the expected effect and helps “it is helping build the necessary bridge to the recovery.”

USD/JPY

Today, during the Asian session, the pair USD/JPY is growing moderately, continuing to develop flat dynamics in the short term. The market situation does not change much, so investors are in no hurry to open any positions. US macroeconomic statistics are gradually improving, which moderately supports the dollar. So, yesterday, the index of business activity in the manufacturing sector of the Federal Reserve Bank of Richmond for May rose from –53 to –27 points with a forecast of growth of only –47 points. The mortgage lending index for the week of May 22 from the Mortgage Lending Association (MBA) grew by 2.7% MoM after a decrease of 2.6% MoM during the previous period. On Thursday, US investors expect the publication of the final annual data on the dynamics of US Q1 GDP, as well as statistics on Durable Goods Order. Key data from Japan, April statistics on industrial production and retail sales, will be released on Friday

XAU/USD

Today, during the Asian session, gold prices are rising moderately, recovering from the “bearish” beginning of the current week. Demand for the instrument is supported by continuing uncertainty in the market, which is pushing investors to buy shelter assets. Also, the price is strengthening amid expectations of new stimulus measures by the leading Central Banks of the world, including the introduction of negative interest rates, which traders have been actively talking about lately. Finally, investors are noticeably concerned about the growing tension between the US and China, which is likely to prevent the parties from continuing negotiations within a trade deal, the first stage of which was signed at the beginning of this year.

Brent Crude Oil: oil is trading sideways

Current trend

For more than a week, oil prices have been trading in an extremely narrow range of 34.20–36.20, and even unexpected data on energy reserves could not make it to leave this channel.

First of all, the slowdown was caused by ambiguous data on the reserves of "black gold" from the API and EIA institutes. The weekly reserves, according to API data, were 8.700 million, which is significantly higher than –4.800 million last week. On Wednesday, the EIA published corresponding data, which also reflected a significant increase to 7.928 million against analysts' forecasts of –1.944 million. Only the excess oil reserves in Cushing’s storage decreased, whose dynamics was –3.395 million against the forecasted decrease of –4.261 million.

Support and resistance

The price continues to form a global upward correction and is consolidating between the levels of the basic and initial Fibonacci corrections. Technical indicators keep the global buy signal: the range of the Alligator indicator’s EMA fluctuations is still wide, and the histogram of the AO oscillator is in the positive zone.

Resistance levels: 38.70, 44.70.
Support levels: 31.70, 23.90.

Morning Market Review

EUR/USD

EUR is trading up against USD during the morning trading session. EUR continues a fairly confident "bullish" trend, which was formed last week and is being traded near the local highs of last Friday (highs since March 27). Investors buy EUR under their own momentum, expecting a further improvement in the epidemiological situation that will allow the global economy to begin the recovery process. Today, investors are focused on Markit macroeconomic statistics on business activity in the manufacturing sector of the eurozone. Similar data from ISM will be published in the US.

GBP/USD

GBP is strengthening against USD during today's Asian session, updating local highs since May 11. The instrument is trying to consolidate above 1.2400, receiving support from the correctional sentiment in USD. Additional pressure on USD was exerted by Friday's macroeconomic statistics from the US, as well as a press conference by Donald Trump, which marked the intensification of the US confrontation with China. Chicago PMI in May fell from 35.4 to 32.3 points with a positive outlook on the growth rate to 40 points. Michigan Consumer Sentiment Index for the same period fell from 73.7 to 72.3 points, which also turned out to be worse than market expectations of 74 points. During his speech, Donald Trump announced the cessation of the WHO funding, once again accusing China of hiding information about the dangers of coronavirus.

AUD/USD

AUD shows strong growth during today's Asian session, updating highs since February 17. The instrument adds about 1% and is trying to consolidate above 0.6740. The main source of growth for the pair is the correctional sentiment in USD. At the same time, quite optimistic macroeconomic statistics from Australia and China entered the market on Monday. AiG Manufacturing index went up from 35.8 to 41.6 points in May. Commonwealth Bank Manufacturing PMI fell from 44.1 to 44 points over the same period, which also turned out to be significantly better than expectations of decline to 42.8 points. Chinese data showed the steady growth of Caixin Manufacturing PMI. In May, the index consolidated at 50.7 points, rising from the previous 49.4 points (the forecast implied an increase to 49.6 points).

USD/JPY

USD is going down against JPY during today's Asian session, testing 107.50 for a breakdown. USD is correcting downwards at the beginning of the week across the entire spectrum of the market, reacting to the publication of not-so-confident macroeconomic statistics from the USA last Friday. In addition, the further lifting of quarantine restrictions has a positive effect on the prospects for the restoration of the global economy. At the same time, it is worth noting the extremely unsuccessful report from Japan on the dynamics of industrial production and retail sales for April, which still does not allow JPY to demonstrate more confident growth. Japanese statistics at the beginning of the week was largely neutral. Jibun Bank Manufacturing PMI in May remained at the same level of 38.4 points. At the same time, Capital Spending for Q1 2020 unexpectedly increased by 4.3% QoQ after a decrease of 3.5% QoQ over the past period. Analysts had expected negative dynamics to remain at –4.2% QoQ.

XAU/USD

Gold prices are rising during today's Asian session, continuing the development of a "bullish" impulse that formed in the middle of the last trading week, when the instrument managed to retreat from its local lows from May 11. The development of the uptrend in gold proceeds against the background of the growth of correctional sentiment in USD, as well as due to a further escalation of tension between the US and China. Last Friday, Donald Trump again made charges against China, which also served as a formal reason for the termination of funding for the WHO. The speech of the Fed Chairman Jerome Powell, who shared his concerns about the second wave of the epidemic, but emphasized the regulator’s readiness for new tests added negative sentiment to the market.