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By XE Market Analysis December 20, 2019 2:12 pm
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    XE Market Analysis: Asia - Dec 20, 2019

    The DXY rose to two-week highs of 97.73 in N.Y. trade on Friday. The reaffirmation of Q3 GDP, along with firmer earnings and consumption figures supported the USD. Wall Street rose to fresh record highs, while Treasury yields were little changed in holiday-mode trade. EUR-USD dipped to eight-session lows under 1.1070, after opening near 1.1100. USD-JPY topped at 109.53, up from under 109.30, as USD-CAD rose over 1.3180 from 1.3130 lows following soft Canada retail sales. GBP-USD gave back losses following the Brexit vote, dipping under 1.3020.

    [EUR, USD]
    EUR-USD fell under both its 20- and 50-day moving averages, currently at 1.1080 and 1.1081, respectively, on its way to eight-session lows under 1.1070. A lack of liquidity has seen the move lower today, with reports of one-off sell orders hitting the market, said to be related to year end book squaring. Three consecutive lower daily lows have put a bit of technically backed pressure on the pairing, though support is seen near 1.1060-50.

    [USD, JPY]
    USD-JPY traded over 109.50 highs, in afternoon trade, up from opening lows of 109.29. Friday marks the fifth-straight session on the 109.00 handle, with the pairing managing just a 109.69 to 109.18 range for the entire week. Further consolidation can be expected into year end, though given the strong U.S. economic outlook, and flagging Japanese economy, a USD-JPY trend higher may be in the cards for the start of 2020.

    [GBP, USD]
    Cable firmed to 1.3080 highs in N.Y. morning trade, up from overnight lows near 1.3010. The pairing later fell under 1.3020 following the Brexit vote in the U.K. parliament. The Brexit bill was passed by a 358 to 234 margin, and included a ban on an extension to the transition period beyond the end of 2020, leaving open the possibility of a no-deal Brexit at the end of the year, should negotiations on trade fail

    [USD, CHF]
    EUR-CHF steadied in the high 108s on Friday, just under Thursday's sharp drop from the seven-week peak of last Friday, at 1.1033. The high was seen on news of the strong election victory of the Conservative Party at the UK's election, though the euro, tracking sterling, came back under pressure after UK PM Johnson this week implied that the no-deal threat was still an option.

    [USD, CAD]
    USD-CAD popped to four-session highs of 1.3181 from 1.3140 following the very weak Canada retail sales outcome, and up from the better than one-month low of 1.3100 seen on Wednesday. A modest sell-off in WTI crude has added some support, though holiday conditions prevail, and will likely limit much follow through movement. The 50-day moving average at 1.3193 provides resistance, with support at 1.3100.

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