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By XE Market Analysis July 24, 2014 7:24 am
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    XE Market Analysis: Europe - Jul 24, 2014

    The dollar perked up some in quiet N.Y. trade, though as is becoming commonplace in the FX market, ranges were narrow. EUR-USD tested London's trend low of 1.3455, though failed to make further downside progress. Sellers in place from 1.3475 capped the euro off. USD-JPY moved modestly higher on better risk levels, though was contained by a 101.37 to 101.53 trading band. USD-CAD held support into 1.0710, and moved over 1.0740 on an ex-auto Canadian retail sales print. There was no U.S. data, leaving Wall Street modestly higher, and yields largely steady. Thursday's calendar brings weekly jobless claims, new home sales data, and the flash Markit manufacturing PMI.

    [EUR, USD]
    EUR-USD ran up to 1.3473 highs after opening near 1.3460, stopping just short of the London high of 1.3474. Sellers a now seen lined up from 1.3475 all the way to 1.3500, as those who missed the boat on Wednesday's break lower, were back on the offer today. It will take a move under 1.3450 to shift sentiment, though it appears EUR-USD is content to take a pause, and consolidate recent losses for now.

    [USD, JPY]
    USD-JPY moved to intra day highs of 101.53 on better risk appetite, though bigger picture, nothing much has changed, with the pairing trading the 101 handle for 12 straight sessions. Thick selling interest, reportedly led by Japanese exporters is in place from 101.65 up to 102.00, while domestic retail bids are seen from 101.20. The BoJ's policy stance is likely to remain steady for the medium term, and as a result, more sideways yen action can be anticipated.

    [GBP, USD]
    The pound erased its advance against the EUR and fell against the USD as the BoE minutes showed a unanimous vote to keep rates unchanged. There had been some speculation one MPC member might have voted for a rate hike, though this was not the case, and sterling suffered a bit as a result. Cable stalled at 1.7050 in N.Y., later easing to 1.7035.

    [USD, CHF]
    EUR-CHF remains entrenched near the 1.2150 mark. The situations in the Mideast and Ukraine are continuing to underpin the Swiss currency's safe-haven premium, though the cross has remained above the Jun-30 low at 1.2133, which was the lowest level seen in three-and-a-half months. Technically, the break of a former uptrend channel support line at 1.2190 opened the way to the mid-1.21s. The cycle low of 1.2104 and 1.2100 are key support levels. We would expect that the threat of SNB intervention into its 1.2000 peg to deter franc buying below 1.2100. SNB's Jordan repeated recently that the central bank remains committed to defending the currency cap.

    [USD, CAD]
    USD-CAD slipped marginally overnight ahead of the Canadian retail sales data, touching 1.0715. The pairing's inability to trade over 1.0760 this week, has shifted sentiment to the downside though it based at just 1.0711 following the Canadian retail sales data, which matched consensus on headline, though fell a bit short ex-autos. USD-CAD later topped out at 1.0745. Friday's 1.0709 low is seen as support, while good bids are in place at 1.0700.

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