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By XE Market Analysis November 8, 2019 3:08 pm
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    XE Market Analysis: Asia - Nov 08, 2019

    The DXY printed near four-week highs of 98.40 in N.Y. trade on Friday. There was little reaction to slightly softer than expected consumer sentiment numbers, and weaker wholesale data. The Dollar made gains against most major currencies, with the Yen the exception, which rallied modestly on a downturn in risk taking levels that were seen throughout much of this past week. USD-JPY slipped to 109.08 after Trump said he had not decided whether or not to roll back China tariffs. EUR-USD touched trend lows of 1.1017, down from early highs of 1.1038. USD-CAD rallied to 1.3237 on a weaker Canada jobs report, while cable fell to near one-month lows of 1.2869.

    [EUR, USD]
    EUR-USD faded to fresh near one-month lows of 1.1017 in N.Y. on Friday, printing lower daily lows every day but one, since last Friday. The pairing is set to close under its 50-day moving average for the first time since October 15. Given the relative strength of the U.S. economy over Europe, and a Fed that is likely on hold from its rate cutting regime, versus an ECB that may still have more easing ahead, we look for further Euro downside to come. Initial support comes at the psych 1.1000 level, with the October 15 low of 1.0991 the next downside target.

    [USD, JPY]
    USD-JPY stopped just shy of the 109.48 five-month high of 109.49 seen on Thursday, easing under 109.30 at the N.Y. open, then falling to 109.08 lows following Trump trade talk. The president said he has not yet signed off on rolling back China tariffs, which saw equities turn lower, and weighed on the risk-sensitive USD-JPY. The pairing did find support ahead of its 200-day moving average, which is currently at 109.03. Risk taking levels will continue to drive direction going forward.

    [GBP, USD]
    Cable printed better than three-week lows of 1.2769 on Friday, marking five straight sessions of lower daily highs and lows. Focus remains on the upcoming U.K. general election. As things stand, PM Johnson's Conservative Party is retaining a commanding lead in opinion polling that suggests they could win and be returned to government with a majority. That in turn implies Brexit being implemented in January.

    [USD, CHF]
    EUR-CHF was rangebound in N.Y. on Friday, sticking inside of Thursday's range and bouncing back from three-week lows of 1.0975, following apparent progress on the U.S./China trade war. The pairing remains relatively buoyant overall, lifted recently by the diminishing in no-deal Brexit risks, which has been generally supportive of the euro. The cross last week printed a two-and-a-half-month high at 1.1059 and besides the early part of this week, has largely remained over 1.1000 of late.

    [USD, CAD]
    USD-CAD shot up to near one-month highs of 1.3237 from near 1.3200 following the big Canada employment miss. The pairing had been on the rise through the overnight session, with the CAD taking its cue from softer WTI crude prices. The weak jobs report, along with last week's disappointing trade figures will remind traders that the BoC could cut rates at its next meeting in December. For now, a buy-the-dip strategy will apply to USD-CAD. The next upside target is the October 14 high of 1.3239, with support now at the 50-day moving average of 1.3209.

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