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By XE Market Analysis February 21, 2018 2:58 pm
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    XE Market Analysis: Asia - Feb 21, 2018

    The dollar edged higher through the morning session in N.Y. on Wednesday, taking the DXY to six-session highs of 89.99. The greenback later moved lower on the FOMC minutes, as the Fed said a gradual approach to tightening remained appropriate, and as it sees few signs of broad wage growth increases (which got markets in a tizzy following the strong earnings outcome in the last jobs report). EUR-USD rallied to session highs of 1.2359 from 1.2315, as USD-JPY fell to 107.30 from 107.75.

    [EUR, USD]
    EUR-USD found support into 1.2300, a six-session low, later bouncing over 1.2330 in fairly light trade. Sellers stepped in overnight following softer EU and Germany PMI figures, though reported option backed buying more recently limited downside to 1.2301. The FOMC minutes later saw the pair rally to 1.2359 highs. Under 1.2300, the next support region comes at 1.2276, the February 14 low. Resistance is at the 20-day moving average of 1.2379.

    [USD, JPY]
    USD-JPY posted three straight higher daily highs and lows, topping at 107.90 in Asia, though remaining firm through the N.Y. session, peaking at 107.72 ahead of the London close. Aside from being dragged higher by a general resurgence in the dollar this week, overnight comments from Japan's vice minister of finance for international affairs appeared to have helped lift the pairing. Asakawa said he thought yen movements were "one-sided (to the upside), but added that recent Treasury yields gains are the "beginning of a sea-change". Following the FOMC minutes, the pairing dipped to 107.30 lows.

    [GBP, USD]
    Cable picked up following BoE official comments, where a hawkish leaning tilt provided support. Carney said, as he has in the past, that rates will have to move higher earlier and to a greater extent going forward. Cable bounced to 1.3990 highs from N.Y. lows of 1.3910, then after the FOMC minutes, topped over 1.4005.

    [USD, CHF]
    EUR-CHF has been in consolidation mode in the mid 1.1500s over the last week after breaking lower in the week before, when a four-month low at 1.1446 was seen. The revival in risk appetite has helped prop up the cross.

    [USD, CAD]
    USD-CAD topped at a near two-week high of 1.2683 earlier in the session, with the pairing responding to the greenback's general bid tone. Oil price gains seen last week have petered out, providing some support as well. The CAD market has been in the process of positioning itself for Canada retail sales on Thursday, and CPI on Friday. The FOMC minutes later took the pairing to 1.2626 lows.

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