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By XE Market Analysis October 30, 2017 3:28 pm
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    XE Market Analysis: Asia - Oct 30, 2017

    Stocks, yields and the dollar were all lower in N.Y. on Monday, with upcoming events and data keeping the markets nervous overall. The FOMC meeting kicks off on Tuesday, while an announcement on who the next Fed chief will be could come anytime this week. ADP jobs figures, and the October jobs report come later in the week, and FX could remain contained until then. EUR-USD traded between 1.1604 and 1.1626 through the session, while USD-JPY dropped to a 113.10 low from opening highs of 113.68. USD-CAD topped at 1.2861, while cable traded over 1.32, though couldn;t hold the figure.

    [EUR, USD]
    EUR-USD rallied to 1.1646 highs after bottoming at 1.1604 at mid-morning. The pairing has remained inside of Friday's trading range, indicative of market directional uncertainty. With ADP data due tomorrow, prospects for a Fed chief announcement this week, the FOMC meeting, and the U.S. jobs report on Friday, traders may remain near the sidelines for now.

    [USD, JPY]
    USD-JPY printed seven-session lows of 113.02, after trading over the 114.00 mark for five straight sessions last week, and unable to close the N.Y. session over the figure on any of those days. The risk backdrop is a bit soft today, adding some weight, but the rally from 111.65 in mid-October, to 114.45 seen on Friday, looks to have about run its course for now. The 20-day moving average of 112.91 marks the next support level.

    [GBP, USD]
    The pound gained on the dollar and euro on Monday, averaging an 0.3% advance against the two. Cable logged a two-session high at 1.3215, returning the pair to the midway point of the sideways range that's been seen for almost a month now. The pound is in the meantime trading at four-week highs versus the euro. The Brexit negotiation process is generating headlines in the UK press almost daily, but are have been having little effect on the forex market, with market participants waiting on concrete developments. Sterling markets are fully discounting a 25bp rate hike from the BoE this Thursday. Resistance remains at 1.3261-63.

    [USD, CHF]
    EUR-CHF has settled around 1.1600 after diving sharply last week amid a broader euro selloff following the ECB announcement on Thursday, which drove the lower after logging a 33-month highs just above 1.1700. We have been anticipating an eventual return to 1.2000, which is the former trading floor of the SNB's, though this assumes that political tensions (Catalonia in particular) don't worsen, as the franc tends to find demand on news developments that might be threating to the political integrity of the Eurozone.

    [USD, CAD]
    USD-CAD has moved moderately higher since the North American open, rising to 1.2859 highs from just under 1.2820. Buying ahead of tomorrow's Canadian GDP data, along with testimony from BoC chief Poloz may be the driver this morning, though USD friendly yield differentials continue to provide support. Friday's spike up to better than three-month highs of 1.2917 provides initial resistance, though we look for an eventual test of the 200-day moving average, currently at 1.3008, as U.S. rates are set to move higher, with the BoC on hold for now.

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