FX Market Wrap: EUR dipping amid profit taking, ahead of tomorrow’s ECB meet.

JPY notably firmer across the board, largely owing to USD/JPY tripping through the 50,100 and 200DMA through 111.80-90 (overnight support) to 111.60. Levels of support at 111.50 where bids are reported. Aside from this, the JPY had been quiet for much of the session ahead of the BoJ where participants are looking for a CPI forecast downgrade with growth targets revised upwards.

EUR slightly pulled off the mid-1.15 with the rally likely to hold steady until the ECB monetary policy decision tomorrow. A move to 1.16 looks to be on the card unless Draghi deviates from his recent hawkish comments made at the Sintra conference.

AUD slightly firmer, however trading within a tight range throughout the day with AUD continuing to extend on its RBA inspired gains to hover around 0.7950. The sentiment for AUD has also been helped by the boost in iron ore prices. Focus will be on the Australian jobs data tonight before the RBA speakers at the end of the week, in which the rate-setters could look to tame the upside in the currency.

CAD: Relatively quiet day for the Loonie, although the currency continued to press lower levels against the greenback, which made a breach of 1.26. However, downside in the pair had been curbed by support situated at 1.2580. Levels ahead is the 2016 low at 1.2461. Additionally, the commodity linked currency had been somewhat unmoved by the larger than expected draw in the DoE crude report with the initial upside in crude prides pared amid the slight rise in US oil production.

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Dollar Index H1

Price moving sideways just below MM1. As mentioned in my post earlier today - we expect some Dollar strength in the near term. The target from MM1 is MPP. That's a lot of downside for Dollar pairs. Be prepared.

US10Y H4

Price pretty much in the same place as it was in our last post. Still struggling to break through WR1 with MPP still providing resistance. We are moving sideways at the moment though the market is still bullish.

10Y Gilts H4

As we can see price is above WR2 with WR3 and MPP above. Profit taking expected in the near term.

10Y Bunds H4

Target is WR2. Still a way to go before we get there, especially with tomorrow being Thursday. Maybe the ECB will help?

One thought on “Daily FX Wrap 19 July”

  1. Rana Haq says:

    Thank you for your analysis. Support on USDCAD can be see in level mentioned, but pair is still very bearish.

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