GBPUSD
Sterling volatility rose yesterday, the highest rose to 1.2713, refreshing the new high since last week, the day`s increase of 0.36%. The UK Manufacturing Purchasing Managers Index, released on Monday, fell to its lowest level in nearly three years, and data released on Tuesday further indicated that the UK`s economic growth has slowed. Yesterday, the UK construction industry purchasing managers index in May was very different from the market expectation, recording 48.6, lower than the previous value of 50.5, the lowest level since March 2018. Due to the uncertainty of Brexit, investors delayed investment in British companies, and some investors even withdrew their investments from the UK, adversely affecting UK companies and dragging down the economic outlook. In the case of the uncertain future of Brexit, the rise in the pound may be just a short-lived. US President Trump recently showed a friendly attitude towards the United Kingdom. He believes that the possibility of a trade agreement between the United Kingdom and the United States is quite high. Once the UK leaves the EU, it will sign an extraordinary trade agreement with the United Kingdom. In addition, Fed Chairman Powell said on Tuesday that in the face of global trade wars and economic downside risks, the current federal base rate has limited space to offset the economic recession, and appropriate measures will be taken to maintain economic expansion. The market interpret this speech as the US monetary policy may be loosened, and the dollar is hit by the pound. From a technical point of view, the current action under the pound can be exhausted, from falling to rising, further rising test 1.2746, if the breakthrough is to see 61.8% rebound position 1.2822, the lower support level is 1.2550.
EURUSD
Yesterday, the euro fell back after hitting a high of 1.1276 since April 18 in the European market, and the trend was relatively stable in the post-market trend at 1.1226 and 1.1276. Eurozone inflation data released yesterday did not perform well, with the eurozone`s core CPI recorded 0.8 per cent in May from a year earlier, below the previous 1.3 per cent and forecast 0.9 per cent. The euro zone`s CPI is expected to record 1.2 percent in May from a year earlier, below the previous 1.7 percent and 1.3 percent forecast. The euro zone`s unemployment rate fell from the previous and expected 7.7 percent in April. Euro zone inflation data show weakness, which could have been bearish for the euro, although the dollar weighed on the euro as expectations of a Fed rate cut rose. The euro zone composite purchasing managers` index and the services purchasing managers` index are due to be released today, with market expectations in line with previous values of 51.6 and 52.5, respectively. If the figures fall short of expectations, pressure will be put on the ECB`s interest rate resolution on Thursday to release the voice of the dove faction. Overall, Brexit, the political situation in Germany and Italian debt have hit the stability of the euro zone, and investors are likely to take a more cautious approach and wait for the situation to become clearer. Euro growth is expected to be limited in the short term. From the technical point of view, the euro broke through the downward trend line since late April and recorded a three-day increase, with an upper resistance level of 1.1282. If the breakthrough is made, it is expected to further test the 1.1324 level. The lower support level is 1.1106 level.
AUDUSD
The Australian dollar moved well yesterday, rising as high as 0.7002, rising more than 0.6% in the day. The Bank of Australia, which held interest rates unchanged at 1.5 percent in its interest rate resolution in May, finally chose to cut interest rates after a series of inflation and economic pressures. Yesterday, the central bank of Australia announced a 25 basis point cut in cash interest rates to 125 percent, a record low, the first rate cut after keeping interest rates unchanged for nearly three years. The RBA said it was adjusting its policy to support sustained economic growth and increase confidence in inflation, and did not rule out a policy adjustment until inflation reached its target level. Potential inflation is expected to be 1.75 percent this year and 2 percent in 2020. Economic growth is expected to be 2.75% in 2019 and 2020. At present, the main uncertainty in the country comes from household consumption. After the rate cut, household income prices are expected to rise in part, which should provide a boost to consumption. As the Australian dollar has been depreciating recently and the Australian central bank has cut interest rates in line with market expectations, the market reacted to positively rather than a massive sell-off after the interest rate resolution was announced, and the Australian dollar rose more than 10 points in the short term. Although the RBA did not specify in its interest rate resolution whether it would cut interest rates further, it is highly likely that the RBA will cut interest rates again this year, given the continuing domestic and global economic risks. In addition, first-quarter GDP data will be released today, and employment data will be released next week. Investors can pay attention to the attitude of the RBA. From the technical point of view, Australia dollar mild rebound, short-term bullish, the upper resistance level can be seen at 0.7020, the lower support level is 0.6745.
The above risk statement is a general information and does not take into account your investment objectives, financial position and investment needs. AETOS Ito Capital Group is the issuer of all products (AFSL: 313016, ACN: 125113117). Trading foreign exchange margin and price difference contract products involves high risk and the loss may exceed your initial investment funds. We strongly recommend that you seek advice from an independent financial adviser before making an investment decision. For more details, please visit AETOS Ito`s official website for more details and refer to our Product disclosure statement. All the contents of this review are owned by AETOS Ito and may not be copied, reproduced and published to third parties without permission.
