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By XE Market Analysis October 11, 2017 7:55 am
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    XE Market Analysis: North America - Oct 11, 2017

    The dollar is mostly lower, as U.S. stock futures register caution ahead of the FOMC minutes. EUR-USD fell back from highs in the mid 1.18s but at 1.1817 remains clearly above recent lows, after the Catalonian president appeared to back down from declaring independence from Spain, instead "suspending" the result of the separatist vote to give time for dialogue with Madrid. USD-JPY is trading at 112.22 amid broad JPY strength on the nervous geopolitical backdrop, before recovering marginally. Cable fell back below 1.32 as the Pound headed broadly lower, as Chancellor Hammond was forced to amid the risk of a Brexit related slowdown and investors highlight that the planned BoE rate hike is not so much the reflection of stronger growth, but reduced investor and production potential that is forcing the BoE into action. .

    [EUR, USD]
    EUR-USD managed a session high of 1.1844 before and thus above the 20-day moving average at 1.1835 but stopped short of the 50-day moving average at 1.1845. So resistance levels haven't been broken, and the pair has since retreated to levels around 1.1817. Last week's near 2-month low of 1.1670 remains as support.

    [USD, JPY]
    USD-JPY climbed back above 112, after posting a better than two-week low yesterday. At 112.24 he pairing is holding above 20-day moving average at 112.09, finding support above the 200-day moving average at 111.88.

    [GBP, USD]
    Cable fell back below 1.320, amid general pressure on the Pound, but remained above extended the recovery from Friday's one-month low at 1.3027. The pound last week posted its biggest weekly decline since August 2016. We still prefer selling into sterling strength in the case against the dollar. Support is at 1.3175.

    [USD, CHF]
    EUR-CHF rallied to a two-week high at 1.1534 amid a broader pick-up in the euro after the Catalan leader managed to de-escalate tensions with Madrid by calling for a pursuit of dialogue. Former EUR-CHF resistance at 1.1488-90 and 1.1500 now revert as supports. We expect the franc to remain on a generally softer path. The SNB stated at its quarterly policy review last month that it remained committed to ultra-accommodative monetary policy settings, and that the Swiss franc "remains highly valued," even in light of the relatively sharp weakening the currency saw from late July.

    [USD, CAD]
    USD-CAD has moved sideways, and oil prices above $51.00 failed to provide further support to the CAD. The pair is back above 1.25 and indeed, further downside is likely to be limited going forward, as the market has largely re-evaluated the BoC policy outlook, where additional rate hikes are expected to be delayed. The 50-day moving average, currently at 1.2465 provides the next support level.

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