The sentiment-linked Australian and New Zealand Dollars rose alongside stocks as sentiment brightened in Asia Pacific trade. The anti-risk Japanese Yen and US Dollar dutifully declined. A positive lead from Wall Street seems to be the catalyst at work.
The markets may be forgiven a degree of optimism. The possibility that Brexit will be delayed is now higher after last week’s voting marathon. China’s official Xinhua news agency claimed, “concrete progress” has been made on a US-China trade deal. The Fed is due to lower official rate hike bets this week.
All this in the absence of top-tier scheduled event risk that might have derailed momentum could add up to cautious risk-on follow-through. Indeed, bellwether S&P 500 futures are pointing higher to hint that APAC-session price dynamics have scope to extend, at least in the near term.
CHART OF THE DAY – GBP/USD MAY BE TOPPING
The British Pound may be starting to show signs of topping. The currency touched a 9-month high against the US Dollar last week but negative RSI divergence hints at ebbing upside momentum, which may precede reversal. Traders might look for confirmation on a daily close below the rising trend line guiding the latest from mid-December lows – now at 1.2956 – for an actionable short trade setup.
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