Risk Sentiment Improves on Reports of US-China Tentative ‘Truce’

Risk Assets Gain, Safe Havens Slide on US-China Tentative Agreement

The dollar traded lower against most of the other G10 currencies on Wednesday and during the Asian morning Thursday. It gained only against the safe-havens JPY and CHF, while it underperformed versus NOK, NZD, AUD, CAD and SEK in that order. The greenback traded virtually unchanged against EUR and GBP.

DAX 30 — Technical Outlook

From Thursday last week, when it reached its May high, the DAX 30 index had been on gradual move lower. This led to another test of the lower side of the rising channel that the price is trading in from the end of May. DAX 30 managed to rebound from that line and it seems it is now trying to make its way back up to the highs of this week. Our oscillators are somewhat in support of the upside scenario, hence why we will aim for slightly higher areas, at least in the short run.

AUD/CHF — Technical Outlook

After trading for a couple of months below a short-term downside resistance line taken from the high of April 23 rd, AUD/CHF has finally broken the downside line and is now slowly drifting higher. Our oscillators show that the upside momentum is picking up again, which may lead the rate a bit higher. For now, we will continue aiming a bit more to the upside, but we will stay careful, in case the market sentiment changes quickly, which could bring the pair back down again.

As for Today’s Events

During the European morning, we get Germany’s preliminary inflation data for June. Expectations have changed since Monday and now suggest that both the CPI and HICP rates have held steady at +1.4% yoy and +1.3% yoy respectively. This would raise speculation that Eurozone’s headline CPI rate, due out tomorrow, may stay unchanged as well.



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