FX traders won’t be in any hurry to drive the US dollar very far from its current levels against the majors until they hear from the FOMC on Wednesday afternoon. The Fed is almost unanimously expected to raise interest rates by 0.25%. The volatility will come from forecast changes and from discussions or news about when they will start shrinking the balance sheet.
Asia got off to a quiet start thanks to a holiday in Australia. USDJPY stutter-stepped lower in Asia and Europe, dropping from 110.43 to 109.89. A decline in global equity markets and position adjustment ahead of Friday’s BoJ meeting undermined USDJPY.
AUDUSD and NZDUSD traded in tight ranges. Aussie opened in New York with a tiny gain compared to Friday’s close, while Kiwi had a tiny loss.
EURUSD inched higher throughout the overnight session, buoyed by French elections that gave Emmanuel Macron’s party (La Republique en Marche) a landslide victory which is rather impressive for a party that was only established one year ago. Improving Eurozone economic data and expectations that the ECB’s QE program is drawing to a close have underpinned EURUSD.
Sterling was tranquil. GBPUSD traded in a 1.2693-1.2768 range as traders analyzed what the UK election will mean to Brexit.
Oil prices flat-lined in Asia and Europe but popped up from $45.92 to $46.54 just as New York started. There wasn’t any news to explain the move.
The Canadian dollar consolidated Friday’s post employment report gains (Canada added 55,000 jobs in May) and traded in a 1.3439-92 range. A recovery in oil prices would lead to additional USDCAD selling.
There isn’t any US or Canadian data due today, leaving traders to focus on the fall-out from the Comey testimony, Trump’s hostile tweets about Comey and Tuesday’s Senate testimony by Attorney General Jeff Session’s. It shouldn’t have any impact on FX markets, but stranger things have been known to happen.
|12-Jun-17||Open-6 am EDT||High||Low|
USDCAD Technical outlook:
The USDCAD technical’s are bearish. A decisive break below 1.3400 would target 1.3035, although the move would not be a one-way street due to the proximity of major support levels. Fibonacci support is at 1.3385 representing the 50% level of the February-May range. The 100-day moving average is at 1.3378 and the 200-day moving average is at 1.3330. The intraday downtrend is at 1.3470 which guards the short-term downtrend line at 1.3510. for today, USDCAD support is at 1.3430, 1.3400 and 1.3390. Resistance is at 1.3470 and 1.3510
Today’s Range 1.3410-80
Chart: USDCAD 4 hour
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