Talking Points
- The commodity currencies are showing increasing strength in recent days, in line with global equity markets continuing their surge higher.
- Battle lines are being drawn up in the EU-US trade dispute as US President Trump insists that agricultural issues are included – while the EU’s negotiating directives have explicitly said otherwise.
- Retail traders[1] are buying EURUSD[2] now, bringing into question the viability of the recent move higher.
Looking for longer-term forecasts on the US Dollar? Check out the DailyFX Trading Guides[3].
The US Dollar (via the DXY[4] Index) is showing signs of technical stress once again, with price action thus far on Wednesday shaping into a bearish outside engulfing bar – typically an indication that more downside may be forthcoming. While there’s still a long day ahead before the candle closes out, much of the economic data released during the Asian and European sessions should help relieve concerns over a near-term global slowdown – which in turn, reduces demand for the safe haven currencies like the Japanese Yen[5] and US Dollar.
Chinese Economic Data Offers Relief
The commodity currencies have been riding high the past few days, largely following the uptick in global equity markets. But data out of China overnight has provided another reason for traders to be optimistic that the global economy didn’t slow down significantly at the start of 2019. Q1’19 Chinese growth came in at 6.4% annualized, slightly higher than the 6.3% estimate provided by Bloomberg News. Strong retail sales and better industrial production figures undergirded the better growth figure
