(MENAFN - DailyFX) Asia Pacific Market Open Talking Points Eurodepreciates,DAXrallies as ECB's Draghi talks up stimulusAUDUSD ,NZDUSDrally on US-China trade deal expectationsCrude oil pricesclear resistance, more gains needed for reversal
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Ahead of tomorrow's critical Fed rate decision, risk trends roared to life as equities rose aggressively in Europe and in the Americas. Earlier in the day,ECB President Mario Draghi delivered dovish commentary , opening the door to further cuts in the near-term. The Euro was the worst-performing major as German 2-year government bond yields sunk over 10 percent in the worst day since May 2018.
Prospects of even loser credit conditions in Europe sent the Euro Stoxx 50 and DAX 2.06% and 2.03% higher respectively. But that didn't end there, in the US theS & P 500andDow Jonesrose 0.97% and 1.35% respectively. Gains in US equities picked up afterUS President Donald Trump tweetedabout meeting with his Chinese counterpart, Xi Jinping, at this month's G20 meeting.
Rising bets of a US-China trade deal, coupled with expectations of at least two Fed rate cuts this year, bolstered the pro-risk Australian and New Zealand Dollars after persistent declines on growing RBA and RBNZ rate cut bets. Sentiment-linked crude oil prices also rallied alongside US stocks as a trade deal could fuel a recovery in demand for the commodity as growth prospects rise. Anti-fiatgoldprices rallied.
Crude Oil Technical Analysis
As anticipated in this week'scrude oil technical forecast , the commodity cleared a descending resistance channel after fading downside momentum hinted of a turn higher. It rallied over 4 percent in its best day since January. But, it stopped short of a key resistance range between 54.55 and 55.41. As such, we still need confirmation of a near-term reversal, especially with the Fed rate decision due in the next 24 hours.
Yet,IG Client Positioningis offering a stronger oil bearish-contrarian trading bias as investors pile into long trades. Join me every week on Wednesday's at 00:00 GMT as I uncover how you can usemarket positioning in your own trading strategy .
Crude Oil Daily Chart
*Charts Created in TradingView
Asia Pacific Wednesday Session
With S & P 500 futures pointing higher heading into Wednesday's Asia Pacific trading session, gains in equities could weaken the anti-riskJapanese Yen . However, given the proximity of the Fed, investors may hesitate to commit in either direction until critical event risk passes. Prospects of a US-China trade deal may bolster ASEAN currencies such as thePhilippine Pesoin the near-term.
FX Trading ResourcesSee how crude oil is viewed by the trading community at theDailyFX Sentiment Page See our free guide to learn what are thelong-term forces driving Australian Dollar prices See ourstudy on the history of trade warsto learn how it might influence financial markets!
--- Written by Daniel Dubrovsky, Currency Analyst for DailyFX.com
To contact Daniel, use the comments section below or@ddubrovskyFXon Twitter