The
breakthrough in NAFTA negotiations between the United States and Mexico,
coupled with optimism over Canada joining the agreement was certainly a
positive step forward to easing trade war fears. However, two steps could be
taken back if the Trump administration raises tariffs on $200 billion of
Chinese goods on September 5th. This caution has slightly impacted risk
sentiment this morning with Asian stocks edging marginally higher. Although
European equity markets rose slightly higher at open, gains could be limited as
investors continue to closely monitor the latest developments revolving around
global trade.
Dollar steady
ahead of US GDP
The
Dollar slightly appreciated against a basket of major currencies on Wednesday
as investors awaited the latest estimate for second quarter US GDP scheduled
for release later in the day.
Dollar
weakness has been a recurrent market theme since the middle of August thanks to
US President Donald Trump, cautious Fed minutes and a fading safe-haven appeal.
Although market expectations remain heightened over the Federal Reserve raising
interest rates in September, the rate outlook for December and beyond may be
heavily data dependent. The Dollar could receive a solid boost if US GDP shows
robust growth in the revised second-quarter figures.
Focusing
on the technical picture, the Dollar Index has staged a modest rebound from the
94.50 level. A breakout above 95.00 could inspire a move towards 95.45.
Alternatively, a break back below 94.50 could open a path towards 94.20 and
94.00.
GBPUSD pressured
below 1.2900
Sterling
is likely to remain vulnerable to downside losses as fears of a no-deal Brexit
weigh heavily on the currency and haunt investor attraction.
Although
a vulnerable Dollar initially offered the Pound some support, prices remain
capped below the 1.2900 resistance level. If the Dollar finds support this
afternoon from the US GDP report, the GBPUSD could trade back towards 1.2820
and potentially lower. However, a technical breakout above 1.2900 may invite an
incline towards 1.3030.
Bitcoin breaks
above $7000
Bitcoin
bulls both found ample support in the form of a vulnerable Dollar and improving
risk sentiment this week with prices breaking above the $7000 level.
There
seems to a be a strong sense of anticipation building ahead of the U.S.
Securities and Exchange Commission’s (SEC) decision in approving a Bitcoin ETF
in September. If a Bitcoin ETF becomes reality, cryptocurrencies could receive
a solid welcome boost.
Focusing
on the technical picture, Bitcoin is looking bullish on the daily charts with
prices trading marginally above $7050 as of writing. A breakout above $7100
could encourage an incline higher towards $7153 and $7200, respectively.
No comments:
Post a Comment