Tools for Traders Top Movers | Heat Map | Pivot Point | Pivot Meters | Action Bias | Volatility Charts Action Insight Daily Report: Yen Pared Gains as Asian Markets Stabilized, Australian Dollar Steady after RBA US equities suffered steep selling overnight with DOW losing -1.9%, S&P 500 losing -2.23%. NASDAQ was worst hit as tech rout continued and closed down -2.74%. While Asian equities opened lower and stay in red, selloff is relatively much milder. Nikkei hit as low as 21056.02 but at the time of writing, it's down just -0.43% and is back pressing 21300 handle. Hong Kong HSI is also trading just down -0.7%. The reactions argues that the selloff is based on a US theme, not a global theme. In the currency markets, Yen is trading as the strongest one for the week but it's pared back much gain in Asian session. Yen, Dollar and Swiss Franc are broadly lower today. On the other hand, commodity currencies are staging broad based recovery, with Aussie leading Kiwi and Loonie higher. Technically, EUR/USD tried 1.2285 support again overnight but failed to sustain below. This level will remain a key focus for today. Hong Kong Dollar Weakest in Three Decades Due to Ample Liquidity USDHKD has continued flirting slightly below 7.85, the weak end of its trading band. Since late-February, the market has been speculating about what and when the Hong Kong Monetary authority HKMA, the de facto central bank of Hong Kong, would do to maintain the peg. We judge that the relative Hong Kong dollar weakness of late is driven by yield differential. If the weak end (7.85) of the peg is reached, the HKMA is obliged to intervene by buying Hong Kong dollar (HKD) in order to maintain the currency peg with the US dollar (USD). The intervention would drain interbank liquidity and cause HIBOR to increase. We do not expect the pace of interest rate increase would imitate that of the previous Fed's rate hike cycle in 2004-2006. Action Insight | Market Overview | Central Bank Views | China Watch | Special Topics | Oil N' Gold | Live Comments Technical Outlook AUD/USD Daily Outlook Daily Pivots: (S1) 0.7641; (P) 0.7668; (R1) 0.7687; More... Intraday bias in AUD/USD stays neutral as it's bounded in consolidation above 0.7642 temporary low. More sideway trading would be seen and stronger recovery cannot be ruled out. Still, near term outlook stays bearish as long as 0.7784 resistance holds, and further decline is expected. Break of 0.7642 will extend recent fall from 0.8135 to retest 0.7500 key support level. On the upside, however, break of 0.7784 will suggest near term reversal and turn bias to the upside for 0.7915 resistance first. Suggested Readings Can GBP/JPY Hold This Crucial Support? Wall Street Bloodletting Continues Gold Jumps As China Plays Tit-For-Tat With Trump EURAUD Edges Towards 2-Year High; Bullish in the Medium-Term Economic Data
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