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By XE Market Analysis July 17, 2018 2:20 pm
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    XE Market Analysis: Asia - Jul 17, 2018

    The DXY rallied to a four-session high of 95.03, up from 94.30 lows into the N.Y. open. The dollar found support from Fed chair Powell testimony, as he remained upbeat on the U.S. economy, and indicated further gradual rate hikes. EUR-USD fell from 1.1710 at the open to a low of 1.1651. USD-JPY ran into sellers just under 113.00, after opening near 112.60. USD-CAD moved over 1.3200 on soft oil and gold prices, while cable fell under 1.3110 on ongoing Brexit angst.

    [EUR, USD]
    EUR-USD printed intra day lows of 1.1657 into the London close, coming from opening highs over 1.1710. The Dollar perked up some as Fed Chair Powell signaled more gradual rate hikes, while giving testimony to the Senate Banking Committee. A close under the 20-day moving average of 1.1664 can be expected to result in a test of Friday's 1.1610 low. Resistance comes at the 50-day moving average, currently located at 1.1708.

    [USD, JPY]
    USD-JPY peaked at new six-plus month highs of 112.93, since falling back under 112.80 on reported profit taking. Japanese exporter offers continue to be reported from the 113.00 level, helping to cap the pairing for now. The January 10 top of 113.19 is resistance now, with buy stops expected to emerge over the level.

    [GBP, USD]
    Cable traded lower into the N.Y. open, dropping from 1.3269 highs seen in London, to 1.3130. Brexit concerns remain a driver, with the latest being the potential for PM May to lose a vote which would maintain a customs union should U.K./EU negotiations fail.

    [USD, CHF]
    EUR-CHF printed seven-week highs above 1.1700 before pulling back. SNB's Maechler said late last month that the Franc "remains highly valued" despite the depreciation seen over the last year, arguing that "we are in extraordinary times and we are using unconventional measures." The comments affirm that the SNB is firmly on hold, with Maechler admitting that the SNB's monetary policy room for manoeuvre is "necessarily" affected by the actions of ECB and Fed.

    [USD, CAD]
    USD-CAD dipped to 1.3145 lows in the aftermath of better Canada manufacturing data, then peaked at four-session highs of 1.3189, coinciding with WTI crude's bottom at $66.47. Oil prices have since bounced moderately, allowing USD-CAD to pull back under 1.3170. Looking ahead, given the wobbly state of the oil market, USD-CAD downside will likely be limited for now. The pairing later topped at 1.3219.

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