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21 Aug 2015
Risk-off market profile dominates Asia, EZ PMIS – Next up
FXStreet (Mumbai) - The demand for safe-haven assets such as gold, yen, long-end US treasuries soared in Asia on the back of flight to safety amid a number of key global events which diminished investors’ risk appetite. The European currency also gained along as the US dollar remained undermined led by the recent FOMC minutes. While Antipodean currencies battering extends on China stocks rout and poor Chinese PMI reading.
Key headlines in Asia
China's Caixin PMI at shocking 6 1/2 yr low
Risk-off moods grip Asian markets, sell-off extends
RBNZ announces changed to the proposed LVR
Dominating themes in Asia - centered on JPY, AUD, NZD
A volatile Asian session, with Asian equities extending their sell-off for the second day while the Japanese yen and the shared currency gained the most amid the persisting risk-off sentiment. Looming global concerns such as currency wars, China stocks rout, political tensions in the Korean Peninsula and Greece collaborated to the upside in the safety assets.
USD/JPY was smashed below 123 handle while the EUR/USD pair attempts a bounce to 1.1300. Gold rallied to multi-week tops at $1167 as risk aversion escalates.
The Aussie came under renewed selling pressure after the Chinese manufacturing PMI came in at 77-month lows, adding to recent China worries. The Caixin-Markit China manufacturing Purchasing Managers' Index (PMI) fell to 47.1 in August, its lowest in more than six years, from 47.8 in July. The Kiwi also remains weak with no fresh fundamentals to offer fresh momentum.
Asian markets extends its bearish tone with the Japanese benchmark Nikkei 225 tanking -2.53% at 19523. While Hong Kong's benchmark Hang Seng index is down -2.59% at 22169 and mainland China's benchmark Shanghai Composite is deep in the red at 3552, down -3%. The benchmark Australian S&P/ASX dropped -2% and trades at 5180.
Heading into Europe - centered on EUR, GBP
On the data space, not much has been going on this week; the first important data will be released on Friday when flash PMIs from the euro zone and from individual euro zone countries are scheduled.
Looking ahead, we have a busy NA session with a series of key releases from Canada to dominate. The Canadian Consumer Price Index (CPI) is projected to advance to 1.3% in July over the past year, following a quickening of pace to 1% in the previous month, according to consensus. While retail trade is estimated to edge up just 0.2% during June, following a surge of 1% in May.
While US flash manufacturing PMI report will fill in the otherwise data-quiet US macro calendar.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FX Street explained, “The EUR/USD pair ended the day around the 1.1200 figure, maintaining a clear short term bullish bias. Technically, the 1 hour chart shows that the 20 SMA has extended sharply above the 100 and 200 SMAs, and continues heading north below the current price, whilst the technical indicators are now consolidating near overbought levels.”
“In the 4 hours chart, the technical indicators are partially losing their upward strength near overbought levels, but far from suggesting a possible downward correction. The pair has a strong static resistance level at 1.1243, June 30th daily high, with a break above it favoring gains up to the 1.1400/10 price zone.”
Key headlines in Asia
China's Caixin PMI at shocking 6 1/2 yr low
Risk-off moods grip Asian markets, sell-off extends
RBNZ announces changed to the proposed LVR
Dominating themes in Asia - centered on JPY, AUD, NZD
A volatile Asian session, with Asian equities extending their sell-off for the second day while the Japanese yen and the shared currency gained the most amid the persisting risk-off sentiment. Looming global concerns such as currency wars, China stocks rout, political tensions in the Korean Peninsula and Greece collaborated to the upside in the safety assets.
USD/JPY was smashed below 123 handle while the EUR/USD pair attempts a bounce to 1.1300. Gold rallied to multi-week tops at $1167 as risk aversion escalates.
The Aussie came under renewed selling pressure after the Chinese manufacturing PMI came in at 77-month lows, adding to recent China worries. The Caixin-Markit China manufacturing Purchasing Managers' Index (PMI) fell to 47.1 in August, its lowest in more than six years, from 47.8 in July. The Kiwi also remains weak with no fresh fundamentals to offer fresh momentum.
Asian markets extends its bearish tone with the Japanese benchmark Nikkei 225 tanking -2.53% at 19523. While Hong Kong's benchmark Hang Seng index is down -2.59% at 22169 and mainland China's benchmark Shanghai Composite is deep in the red at 3552, down -3%. The benchmark Australian S&P/ASX dropped -2% and trades at 5180.
Heading into Europe - centered on EUR, GBP
On the data space, not much has been going on this week; the first important data will be released on Friday when flash PMIs from the euro zone and from individual euro zone countries are scheduled.
Looking ahead, we have a busy NA session with a series of key releases from Canada to dominate. The Canadian Consumer Price Index (CPI) is projected to advance to 1.3% in July over the past year, following a quickening of pace to 1% in the previous month, according to consensus. While retail trade is estimated to edge up just 0.2% during June, following a surge of 1% in May.
While US flash manufacturing PMI report will fill in the otherwise data-quiet US macro calendar.
EUR/USD Technicals
Valeria Bednarik, Chief Analyst at FX Street explained, “The EUR/USD pair ended the day around the 1.1200 figure, maintaining a clear short term bullish bias. Technically, the 1 hour chart shows that the 20 SMA has extended sharply above the 100 and 200 SMAs, and continues heading north below the current price, whilst the technical indicators are now consolidating near overbought levels.”
“In the 4 hours chart, the technical indicators are partially losing their upward strength near overbought levels, but far from suggesting a possible downward correction. The pair has a strong static resistance level at 1.1243, June 30th daily high, with a break above it favoring gains up to the 1.1400/10 price zone.”