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By XE Market Analysis June 30, 2020 3:11 pm
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    XE Market Analysis: Asia - Jun 30, 2020

    The DXY printed a near one-month high of 97.80 early in the N.Y. session on Tuesday, before spending much of the morning session pulling back to 97.23 before steadying. Incoming data was mixed, revealing a weaker than consensus Chicago PMI, and a better consumer confidence outcome. Wall Street was mixed as well, with the NASDAQ and S&P 500 outperforming and the Dow kept under pressure by losses in Boeing shares. EUR-USD fell to 1.1191 early on, later rallying to 1.1262 highs. USD-JPY bucked the trend, heading to 107.93 highs from early lows of 107.53. USD-CAD slipped from 1.3689 to 1.3594 lows, while Cable headed to 1.2392 from opening lows of 1.2264. Wednesday's U.S. calendar features the June ADP employment survey, where we expect 2.300 mln private payrolls to be added.

    [EUR, USD]
    EUR-USD rallied from four-session lows of 1.1191 seen in early trade, later peaking at 1.1262 at mid-morning, before steadying near 1.1245. The mostly risk-on session, including gains on Wall Street and firmer Treasury yields prompted some unwinding of USD safe-haven plays, while the pairing's failure to take out last Thursday's 1.1190 lows likely prompted some general short covering as well. Resistance now stands at 1.1269, the 20-day moving average, with support remaining at 1.1190.

    [USD, JPY]
    USD-JPY headed to intra day lows of 107.53, down from opening highs of 107.79. The move came after the Wall Street open, which saw negative futures flip to cash gains at the open. The uptick in risk taking levels pushed the USD lower pretty much across the board. The pairing later headed to 107.93 highs before settling in over 107.75. Gains came on reported short covering ahead of the 20-day moving average, currently at 107.53. The 20-day moving average at 107.53 has provided initial support, and a break below there will bring the 50-day moving average at 107.39 into focus.To the upside, the psych 108.00 level provides resistance.

    [GBP, USD]
    Cable reversed Monday's losses, trading to 1.2392 highs from opening lows of 1.2264. UK data, released ahead of the London open, showed an unexpected downward revision in final Q1 GDP data, to -2.2% from -2.0% reported initially. The data was backward looking however, and had little impact on Sterling. A softening USD was ths catalyst for GBP-USD rise through the N.Y. session.

    [USD, CHF]
    EUR-CHF steadied near 1.0650 in N.Y. trade on Tuesday, After failing to hold the 1.07 mark overnight. Today's low was well above Friday's one-month low of 1.0623. The cross had fallen back over the last couple of weeks, though has continued to trade comfortably above the series of lows near 1.0500 that were seen from March through to mid May. Committed SNB intervention prevented the 1.0500 level from being breached over this period, when the consequences of the pandemic increasing bets about a possible breakup of the euro area, and even the EU. The SNB policy meeting was on Thursday, which stuck with negative rates for the foreseeable future and strengthened its commitment to intensify FX intervention if necessary to keep the CHF under control.

    [USD, CAD]
    USD-CAD showed little reaction to the April Canada GDP report, which was horrible, but close to consensus forecasts. The pairing remained steady on either side of 1.3680 through mid-morning, later dropping to four-session lows of 1.3594, as risk taking levels remained positive for the CAD, and WTI crude prices topped the key $40 mark for the first time in a week.

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