Home > XE Currency Blog > XE Market Analysis: Asia - Mar 25, 2019

AD

XE Currency Blog

Topics6446 Posts6491
By XE Market Analysis March 25, 2019 2:46 pm
    XE Market Analysis's picture
    XE Market Analysis Posts: 4423
    XE Market Analysis: Asia - Mar 25, 2019

    The Dollar was rangebound in N.Y. on Monday, with the DXY inside a narrow 96.63 to 96.41 trading band. There was little in the way of data to drive the market, and following last week's volatility, a period of consolidation may set in. EUR-USD was stuck inside of 1.1304 and 1.1331, while USD-JPY fell under 109.80 late in the session, after peaking at 110.13 early. Stock market losses weighed on that pairing. USD-CAD topped at 1.3444, later falling to 1.3400 lows as oil prices recovered above $59.00. Cable was heavy on ongoing Brexit uncertainty, falling to 1.3176 after the London close.

    [EUR, USD]
    EUR-USD remained above the 1.1300 mark through the N.Y. session, after rallying in London morning time following better Germany Ifo figures, and an uptick in Bund yields. The pairing spent the day on either side of its 20-day moving average, currently at 1.1322, in a trading band of 1.1304 to 1.1331. Given the relative outperformance of the U.S. economy over the Eurozone, we look for sell-the-rally mindset to prevail for EUR-USD.

    [USD, JPY]
    USD-JPY attempted to rally following a positive Wall Street open, topping at 110.13, up from opening lows of 110.00. Since then, stocks rolled over into the red, resulting in the risk-sensitive pairing testing under the 110.00 mark again. The theme of global slowing and lower Treasury yields that has been building of late, can be expected to keep a lid on USD-JPY going forward. The 50-day moving average at 110.42 now provides resistance, with support at the February 7 low of 109.60.

    [GBP, USD]
    Cable printed a three-session high at 1.3246 before falling to 1.3165 after the London close. The Brexit news flow remained thick. Notable developments include: UK Prime Minister May has still not confirmed that a third vote on her Withdrawal Agreement will take place, suggesting she remains uncertain whether there is enough support for it; the EU has stated that it is "increasingly likely that the UK will leave without a deal on April 12"; and a cabinet member, cited by the Spectator magazine, said that May is "for the first time" -- and "definitely" -- moving towards ruling out a no-deal Brexit eventuality. The EU last week agreed to extend the Brexit deadline to April 12, by which time the UK needs to have approved May's deal or come up with an acceptable alternative plan.

    [USD, CHF]
    EUR-CHF has settled in the lower 1.1200s after diving sharply last week to a 10-week low at 1.1212. The rotation lower was a reflection of a broader decline in the Euro, which came amid disappointing Eurozone data (especially the preliminary March PMI survey readings) and a sharp drop in Bund yields, which saw the 10-year benchmark yield go negative for the first time since 2016. The cross has been seeing choppy directional impulses since the start of the year, often times characterized by bouts of pronounced underperformance in the Swiss franc that have often been accompanied by talk/suspicions of SNB intervention.

    [USD, CAD]
    USD-CAD printed two-week highs of 1.3440 in Asia overnight, later falling back under 1.3405, before rallying to 1.3436 highs into the North American open. Soft Canada retail sales seen last week, along with general risk-off conditions have weighed on the Loonie of late, as have oil prices, with WTI crude trading abut $1.50/bbl under last week's trend high. USD-CAD resistance is now at 1.3467, the March 7 tops, with support at 1.3332, the 20-day moving average.

    Paste link in email or IM