Daily Market Outlook, May 19, 2023
Asian equities are mostly positive heading into the weekend, taking their cue from the tech-led gains on Wall Street. The Nasdaq's strong performance and the S&P 500 reaching a nine-month high due to optimism surrounding the debt ceiling and solid economic data set a positive tone. The Nikkei 225 index surged 0.8% at the opening, reaching its highest level since August 1990. However, the index faced resistance near the 31k handle and trimmed some gains as investors digested the latest CPI figures, which mostly met expectations but showed a faster pace of acceleration. However, Chinese markets underperformed as Alibaba's revenue disappointed investors.
The remaining data docket lacks significant data releases. In the Eurozone, notable speakers from the European Central Bank (ECB) include President Lagarde and Executive Board member Schnabel. The ECB has signalled its intention to raise interest rates further in the upcoming policy update in June and potentially beyond. Canadian retail sales are anticipated to decline for the second consecutive month. Bank of England's Monetary Policy Committee member, Haskel, is scheduled to speak, focusing on productivity measurement issues rather than monetary policy.
In the United States, investors will focus on the Federal Reserve Chair Powell and New York Fed President Williams who will participate in a monetary policy conference. Their statements will be closely monitored, particularly regarding the possibility of a Fed policy "pause" next month.
FX Options Expiries For 10am New York Cut
(1BLN+ represent larger expiries, more magnetic when trading within daily ATR)
EUR/USD: 1.0750 (758M), 1.0820-25 (601M)
1.0835-50 (1.36BLN), 1.0880-85 (301M), 1.0900 (842M)
USD/JPY: 136.00 (600M), 136.25 (285M), 138.00 (484M)
138.50 (200M), 139.00 (376M), 140.00 (290M)
EUR/JPY: 148.00 (250M)
USD/CHF: 0.8875 (250M), 0.9000 (565M)
GBP/USD: 1.2280-90 (732M), 1.2500 (481M)
AUD/USD: 0.6600 (249M), 0.6645-50 (746M), 0.6685 (211M)
0.6700 (235M)
USD/CAD: 1.3420-30 (718M), 1.3455-65 (688M)
1.3475-85 (561M), 1.3500 (1.44BLN)
CFTC Data As Of 12/05/2023
USD net spec short position grew in May 3-9 period; $IDX -0.24$
EUR$ -0.38% in period, specs +5,933 contracts now long 179,422
Net EUR long position highest since Oct 2020, was +212k in Aug 2020
$JPY -0.96% in period, specs +7,309 contracts yen short pared to -61,015
GBP$ +1.2%, trade to new 2023 high; specs buy 3,463 contracts now long 4,528
$CAD -1.77%, specs cut CAD short +7,833 contracts; AUD$ +1.52%, specs -4,183
BTC -3.62% in period, specs buy dip add 255 contracts now long 423 (Source RTRS)
Overnight News of Note
Tsy’s Coffers Dwindle To Lowest Since 2021 Under Debt Cap’s Shadow
US Agrees On Taiwan Trade Terms, Clouding Plans For China Talks
G-7 Restricts More Goods But Avoids Near-Total Russia Export Ban
UK Household Confidence Extends Rebound Despite 10% Inflation
China's Commerce Minister To Meet With Raimondo, Tai Next Week
China Considers Moving Stakes In Bad Banks To Sovereign Wealth Fund
Japan’s Inflation Quickens Again, Putting Pressure On BoJ View
Dollar Buoyed By Hawkish Fed Expectations As Debt Deal Eyed
Yuan’s Biggest Weekly Loss In Three Months Tests PBoC Tolerance
Oil Set For Best Week Since Mid-April On US Debt-Deal Optimism
Japan's Nikkei Rises To Hit The Highest Since August 1990
Applied Materials Forecasts Third-Quarter Revenue Above Estimates
Disney To Yank Shows From Streaming Service In Savings Push
FDA Vote In Support Of Pfizer RSV Vaccine To Protect Newborns
(Sourced from Bloomberg, Reuters and other reliable financial news outlets)
Technical & Trade Views
SP500 Bias: Intraday Bullish Above Bearish Below 4180 - Target Hit - New Pattern
Below 4090 opens 4040
Primary support is 4000
Primary objective is 4207
20 Day VWAP bearish, 5 Day VWAP bullish
.png)
EURUSD Bias: Intraday Bullish Above Bearish below 1.0860
Below 1.0850 opens 1.0710
Primary support is 1.07
Primary objective is 1.1128
20 Day VWAP bearish, 5 Day VWAP bearish
.png)
GBPUSD Bias: Intraday Bullish Above Bearish below 1.2430
Below 1.2370 opens 1.2310
Primary resistance is 1.2540
Primary objective 1.23
20 Day VWAP bearish, 5 Day VWAP bearish
.png)
USDJPY Bias: Intraday Bullish above Bearish Below 137.50
Below 135.90 opens 135
Primary support is 133
Primary objective is 138.80
20 Day VWAP bearish, 5 Day VWAP bullish
.png)
AUDUSD Bias: Intraday Bullish Above Bearish below .6650
Below .6620 opens .6590
Primary resistance is .6710
Primary objective is .6580
20 Day VWAP bearish, 5 Day VWAP bearish
.png)
BTCUSD Intraday Bias: Bullish Above Bearish below 26500
Below 26000 opens 25800
Primary support 26000
Primary objective is 34600
20 Day VWAP bullish, 5 Day VWAP bullish
.png)
Disclaimer: The material provided is for information purposes only and should not be considered as investment advice. The views, information, or opinions expressed in the text belong solely to the author, and not to the author’s employer, organization, committee or other group or individual or company.
Past performance is not indicative of future results.
High Risk Warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% and 75% of retail investor accounts lose money when trading CFDs with Tickmill UK Ltd and Tickmill Europe Ltd respectively. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Futures and Options: Trading futures and options on margin carries a high degree of risk and may result in losses exceeding your initial investment. These products are not suitable for all investors. Ensure you fully understand the risks and take appropriate care to manage your risk.
Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!