Home > XE Currency Blog > XE Market Analysis: Asia - Jan 07, 2019


XE Currency Blog

Topics6203 Posts6248
By XE Market Analysis January 7, 2019 3:04 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 4238
    XE Market Analysis: Asia - Jan 07, 2019

    The Dollar traded lower in N.Y. on Monday, taking the DXY to two-plus month lows of 95.64. A softer than expected services ISM had little impact. Wall Street was higher on hopes for trade progress between the U.S. and China. EUR-USD ranged between 1.1439 and 1.1486, while USD-JPY peaked at 108.68, bucking the trend, as risk-on conditions prevailed. USD-CAD slid again on firmer oil, and a generally softer Greenback. Cable meanwhile, was sideways over 1.2750.

    [EUR, USD]
    EUR-USD was fairly steady, trading between 1.1439 and 1.1485 since the N.Y. open. A less aggressive Fed tightening outlook has supported the pairing, while economic softening in the EU has limited Euro gains. EUR-USD has been largely sideways since mid-November, and it appears more of the same will be in store for the time being. Support is seen at the 20-day moving average of 1.1387, with resistance at last Wednesday's 1.1497 top.

    [USD, JPY]
    USD-JPY has printed four-session highs of 108.68, up from opening lows of 108.21. Wall Street is currently mixed, though in better shape than futures indicated earlier, which has put a floor under the pairing. Risk taking levels will largely be tied to trade negotiation news from China, where signs of progress there will likely support risk assets, and USD-JPY.

    [GBP, USD]
    Cable opened at session lows near 1.2750, later topping at 1.27887, before settling over 1.2750. The pairing is back to near flat from month-ago levels, but is down by 5.9% from year-ago levels and by about 14% down from the levels that were prevailing just ahead of the vote to leave the EU in June 2016. Parliament will vote on the Brexit deal on January 15. It's looking highly probable that it will be voted down. We anticipate that the Pound will remain a sell-into-gains trade for now.

    [USD, CHF]
    EUR-CHF has recouped to around the 1.1250 level amid a backdrop of revived risk appetite in global market. The cross had last week punched out a four-month low at 1.1184, which was seen as the Swiss franc picked up safe haven demand in the wake of Apple's revenue warning (which in turn followed December manufacturing PMI data showing weakening across key global economies). The SNB remained firmly on hold at its quarterly policy meeting last month, continuing to rely on the combination of negative interest rates and the threat of intervention to limit appreciation in the currency in times of heightened uncertainty about the global outlook.

    [USD, CAD]
    USD-CAD fell to levels last seen on December 13, bottoming at 1.3337 early in the session. General USD softness, along with higher oil prices weighed on the pairing. From a technical perspective, last Thursday's close under the 20-day moving average of 1.3504 was taken as a bearish signal. Later, sellers emerged on the break under the 50-day moving average, currently at 1.3334, bottoming at 1.3277.

    Paste link in email or IM