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Daily Report

Traders Bet on China Growth Hopes15 April 2019 by Dave Evans

Morning Report: 07.00 London

Risk assets are on the back foot as traders renew bets on Chinese growth holding up against expectations following Friday’s better than expected trade balance data.

The dollar index is on the back foot, with follow-on selling that builds on Friday’s reversal.

Dollar pairs are enjoying the dollar’s weakness and building on Friday’s gains. The EUR/USD has gapped higher, above the 1.1300 level and set for its first close above the 1.1300 level for the first time this month. The GBP/USD is also gapping higher, though from a lower base. The EUR/GBP has gapped lower below resistance at 0.8650 as the pound builds quicker momentum.

The AUD/USD is underperforming however, with a small gap lower following Friday’s push towards 0.7180.

The USD/CAD gapped higher at the open, but this opening move is slowly reversing. There is a firm sell-off on the USD/CHF however as the pair dips below 1.0020 this morning. The EUR/CHF is now back to unchanged after gapping higher at the open and extending the recent winning run.

Yen pairs are mixed, with the USD/JPY slipping below the 112.00 level after holding above on Friday. The GBP/JPY has gapped higher at the open, while the EUR/JPY is posting small losses after large gains on Friday. The AUD/JPY is also experiencing a small reversal after smashing through the 80.00 level on Friday.

Coming up today

At 12.30, we have NY Empire State Manufacturing Index.

At 14.30, we have the BOC business outlook survey.

FOMC member Evans speaks at 17.00.

Trade Idea

The AUD/JPY saw tremendous gains on Friday as traders bet on a return to Chinese growth. There could be more to come as the yen weakens, making a HIGHER trade attractive.

Traders Bet on China Growth Hopes

A good way to play this is a HIGHER trade predicting that the AUD/JPY will close above 80.50 in 14 days for a potential return of 121%.

Traders Bet on China Growth Hopes