Home > XE Currency Blog > XE Market Analysis: Asia - Jun 02, 2015

AD

XE Currency Blog

Topics7223 Posts7268
By XE Market Analysis June 2, 2015 3:14 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 5147
    XE Market Analysis: Asia - Jun 02, 2015

    The dollar got clobbered in N.Y. trade on Tuesday, led by EUR-USD's fast rise to highs over 1.1190, after opening near 1.1000. Stop loss buying was a key driver of the euro's rally, with buyers surging in on the break of 1.1010, and again at 1.1100. The EUR-USD move spilled over to the other major dollar pairings, resulting in USD-JPY touching 123.75 lows, after making multi-year highs over 125 in Asia. Cable surged from near 1.52 to highs over 1.5365, as USD-CAD fell under 1.2370, with weight there coming from surging oil prices. WTU crude rallied over $61.50 from $60.30 lows. On the data front, weak factory orders had some negative dollar impact, while firmer Treasury yields, and a modestly positive Wall Street did little to support the greenback.

    [EUR, USD]
    EUR-USD broke sharply higher in early N.Y. trade, advancing to 1.1194, levels last seen on May 22. Apparent improved prospects for an EU/Greece deal saw the speculative market test EUR-USD's upside, with little resistance in sight, as sellers stepped aside. Large stops were tripped at 1.1010, which resulted in a gap up to 1.1089 highs initially, then more stops at 1.1100 were reportedly targeted, taking the pairing to its highs. Offers are noted into 1.1200, with yet another round of stops expected on a move over 1.1211, the May 22 peak. EUR-USD later retreated from 1.1194 session highs in the aftermath of comments from Dijsselbloem, the chairman of the EU finance ministers said Greece will not meet creditors half-way. The euro then fell back to 1.1105, as perhaps once again, the market was drawn into believing the hype of a deal, which still isn't. The ECB raising of the ELA cap for Greek banks by 500 mln euro to 80.7 bln, later saw the euro climb back over 1.1180.

    [USD, JPY]
    USD-JPY remained above its 123.75 intra day low, after sliding from 124.80 after the open, though subsequently ran into good sellers on forays above 124.20. After trading over the key 125 level overnight, profit taking was a main feature, and those who missed the sharp drop from 124.80 to 124.00 in early morning N.Y. trade, appeared to be willing at this point to throw in the towel on moves over 124.00. While further gains may be in the cards in the coming days, for now at least, over-extended long positions may need to be shaken out.

    [GBP, USD]
    Cable followed EUR-USD's lead, and rallied from under 1.5200 in London trade to highs over 1.5365. he break of Monday's high of 1.5304 prompted stop loss buying, and as the USD continued its broad advance, able eventually make it to its intra day highs.

    [USD, CHF]
    EUR-CHF surged over 1.0400 on Tuesday, as EUR-USD's recovery toward 1.1200 supported. SNB's Zurbrugg said last week that negative rates in force for as long as policy requires. This is the new boilerplate rhetoric of Swiss policymakers, who have been in a fight to curtail EUR-CHF's downside, though their options will be limited in context of any broad euro underperformance.

    [USD, CAD]
    USD-CAD made 1.2431 lows after the U.S. data, on its way from 1.2530 highs into the North American open, and from a 1.5 month peak of 1.2563 posted on Monday. A good chunk of this morning's losses came on the back of a broadly weaker greenback, though elevated oil prices so far this week have helped CAD sentiment. The market may now begin to position ahead of trade data on Wednesday, Ivey PMI Thursday, and May employment data on Friday. USD-CAD support was seen into 1.2400, though the pairing eventually pressed through the 1.2400 mark to lows of 1.2368, as the greenback remained pressured, and as oil prices topped $61.50. Sell stops were seen on the move under 1.2391, which was the May 27 low. USD-CAD may now be primed to fill in the daily chart "gap" up seen on May 26 from 1.2301 to 1.2450.

    Paste link in email or IM