US Dollar back on the front foot but jury remains out
Thursday 23 August 2018
After a few days under the cosh we've now seen some strong USD demand again helped by last night's FOMC Minutes pointing to another 0.25% rate hike in September. There's also talk of Powell's Jackson Hole speech tomorrow dismissing Trump's call against further tightening. These are fragile Summer markets though and the jury remains out so we can expect some good two-way business still.
GBPUSD has capped around the decent resistance line at 1.2920 and duly fallen back to 1.2855, taking out the interim support at 1.2870 along the way.Immediate support/buying interest still around 1.2850 then more into 1.2830 and 1.2800.Sellers building at 1.2900 and still there between 1.2920-30 with more interest between 1.2950-60. Rallies can still be sold for short term plays while respecting the dip demand as I've been warning of late.
EURGBP remains underpinned but tightly bound after its failure to break 0.9000(GBPUSD 1.1110) this week. Sellers still poised around 0.9000 then 0.9030. Buying interest building now at 0.8970 then more into 0.8950 still with larger interest at 0.8930 and 0.8900 still.
EURUSD rallied further to test key resistance around 1.1625-30 where large option expiry interest also rolls off today but has also retreated amid the renewed USD demand and fallen back to test the 1.1550 support lines. Sellers now building between 1.1580-1600 where more option expiry interest lays in wait today, then 1.1620-30 still and 1.1650.Buyers still between 1.1540-50 then more into 1.1520 and 1.1500.
USDJPY has finally broken up through the 110.50-55 resistance area and rallied to test 111.00.Sellers still poised there with large option expiry interest between 110.80-00 expected to contain further rallies still. More sell interest behind that at 111.30. Buyers now lining up at 110.50 which becomes pivotal for short-term moves with more at 110.30 and 110.00 again. USDCHF has held 0.9800 with the SNB never too far away albeit with EURCHF retreating but still holdig above 1.1350.Sellers remain poised on both though as I've been warning but we can continue to expect dip demand still.
AUDUSD has fallen sharply overnight with the Aussie government in disarray still as I've highlighted. The Finance Minister has resigned and PM Turnbull faces increased calls for him to go too. Immediate buying interest now around the 0.7280 area I mentioned yesterday,0.7250 and 0.7230. Sell interest building around 0.7300 and 0.7320. USDCAD found fresh support below 1.3000 but has failed to make the most of the USD demand with the C$ still wanted helped by positive tones on NAFTA deal and the BOC expected to hike rates again.Buyers still lined up at the 1.2980 area I mentioned yesterday with interim support expected around 1.3000 again. Sellers still into 1.3050 the 1.3080-00.
Fickle Summer markets still prevailing so get your orders in to take full advantage of these moves.
Congrats to India's cricketers for a comprehensive 3rd Test victory over England which pegs back the home side's 2-0 lead and now sets up the series for a fascinating final two Tests.
Have a good day out there one and all.
Interbank Rate 08.40 BST GBPUSD 1.2878 EURUSD 1.1569 EURGBP 0.8984 GBPEUR 1.1130 USDJPY 110.80 USDCAD 1.3036 USDCHF 0.9835 GBPAUD 1.7662 GBPCAD 1.6786 GBPCHF 1.2663 GBPZAR 18.5085 GBPHKD 9.9833 EURHKD 8.9700