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By XE Market Analysis February 4, 2019 2:42 pm
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    XE Market Analysis: Asia - Feb 04, 2019

    The Dollar moved higher in N.Y. trade on Monday, supported by last week's strong jobs and manufacturing reports. Treasury yields aided as well, as they remained elevated through the session. EUR-USD slipped to 1.1424 from 1.1455 highs, while USD-JPY topped at 110.17, before heading back under 109.90. USD-CAD was supported by softer oil price, while Cable gave back early gains, later bottoming at 1.3030.

    [EUR, USD]
    EUR-USD bounced from 1.1424 lows, right at its 20-day moving average, to 1.1441 highs into the London close. The pairing remains heavy though, as the Dollar overall continues to benefit from last week's strong U.S. data, and accompanying boost in Treasury yields. Last week's 1.1404 low is the next downside target, followed by the 50-day moving average at 1.1396.

    [USD, JPY]
    USD-JPY has eased back from its 2019 high of 110.17, trading back under 109.90 after the London close. The pairing has rallied sharply since Friday's slate of U.S. data, which included better jobs and manufacturing ISM reports. Buy-stops were reported just over the 110 mark earlier, though ongoing talk of Japanese exporter backed selling capped the upside.

    [GBP, USD]
    Cable traded to 1.3030 lows in N.Y. trade, after attempting to rally early in the session. The ongoing implacability of the EU against the UK government's desire to replace the Irish backstop with an "alternative arrangement" had been weighing on the Pound. Both the January manufacturing and construction PMI surveys painted an ominous picture of Brexit uncertainty directly leading to slowing momentum in the UK economy. This backdrop should keep the pound on an overall downward tack for now, though there is potential for the currency to rally should a no-deal Brexit be concretely ruled out. The market will keep an eye on the 1.3038 level, which represents the 200-day moving average.

    [USD, CHF]
    EUR-CHF has settled near the 1.1400 level, holding below last week's 11-week high at 1.1429. The cross has been going through phase of relatively high volatility, which has produced several bouts of pronounced underperformance in the Swiss franc, which have often been accompanied by talk/suspicions of SNB intervention.

    [USD, CAD]
    USD-CAD continues to trade on either side of its 200-day moving average at 1.3128. Softer oil prices resulted in a high of 1.3147 early on, while moderately risk-off conditions provided support as well. The pairing later settled back under 1.3120 as risk conditions improved. A close above the 200-dma today may result in follow through buying overnight tonight.

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