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By XE Market Analysis December 7, 2017 3:14 pm
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    XE Market Analysis: Asia - Dec 07, 2017

    The dollar was firmer in N.Y. trade on Thursday, taking the DXY to 12-session highs of 93.80 in the process. EUR-USD printed 1.1778 lows into the close, marking four days of lower lows. USD-JPY broke above its 50-day moving average topping at 113.04, as risk-off conditions abated. USD-CAD fell to 1.2813 from 1.2868 as oil prices firmed up, though later climbed over 1.2855 on recurrent dollar strength into the close. Cable shot up to 1.3485 from 1.3320 lows, as reports circulated that the U.K. and Ireland were "a few hours" from a Brexit deal.

    [EUR, USD]
    EUR-USD ranged between 1.1777 and 1.1814 through the N.Y. session, finding sellers over the 20-day moving average of 1.1810. The pairing has since settled back to 1.1787 lows. Today marks the fourth consecutive session of lower daily highs and lows. A move under the 50-day moving average at 1.1760 will see the November 22 base of 1.1733 targeted. That move could come as soon as tomorrow morning, depending on how the U.S. jobs report plays out.

    [USD, JPY]
    USD-JPY buy-stops reported over 112.80, which was the top seen into the open, and after the London close. In addition, the break over the 112.83 50-day moving average brought buyers into the fray as well. The pairing peaked at 113.04, though offers are seen in place from Japanese exporters and option backed players. A break over 113.10 will be needed to shift near term sentiment.

    [GBP, USD]
    GBP-USD fell to eight session lows of 1.3320 into the N.Y. open, later recovering over 150 points to top at 1.3485. The timing of the rally coincided with headlines of remarks by EU commissioner for budget and human resources, Oettinger, that there had been "noticeable progress" on the divorce bill, although he reminded that the Irish border issue remains a "challenge," being "very complex." It was also reported that the U.K. and EU had resolved Brexit issues over the U.K.'s participation in the European Court of Justice. Later, reports than Ireland and U.K. were near agreement on Brexit borders took the pairing to sessio highs. The earlier slide came on reports the EU said it will not prolong the deadline for an agreement on key Brexit issues, putting PM May in a difficult situation, having to come up with a solution by Sunday.

    [USD, CHF]
    EUR-CHF has seen volatile price action over the last several sessions, having on Friday turned sharply lower, to a low of 1.1599 after clocking a 35-month high of 1.1737, and subsequently lifting briefly back above 1.1700. There have been multiple failures to sustain gains above 1.1700 over the last month, and market participants will be wary of supply above this level. We remain bullish over the medium term, however. Assuming the Eurozone has conquered, or can conquer, existential political threats, and assuming the SNB remains anchored to ultra-accommodative monetary policy, which looks likely to be the case for the foreseeable, we anticipate EUR-CHF will make an eventual return to 1.2000. Support is at 1.1650.

    [USD, CAD]
    USD-CAD came off of early highs of 1.2868, a one-week top, trading under the 1.2840 level. WTI crude rallied over $56.50, up better than 60 cents from earlier lows, which appeared to have prompted some USD-CAD profit taking. The pairing had unwound most of the sharp losses that were seen last Friday following above-forecast GDP and employment data out of Canada. The BoC's cautious guidance following its policy meeting yesterday, when it left rates at 1.0%, as had been widely anticipated, has weighed on the Canadian buck. Downside is likely to be limited going forward, as traders look to next week's FOMC meeting, where a 25 basis point hike remains in the cards.

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