After being on the back foot all day weaker German data, politics and China reserve data give the USD a boost into Europe trading.
The USD hadn’t had a great day in Asia generally, but a confluence of events seems to be for now taking attention away from the Trump put that has been hanging over it. No doubt a lot of USD long positioning has been unwound in general over the past couple of weeks, as disappointed bulls retreat to the sidelines to lick their wounds.
China reserve data recently released dropped below $3 Trillion pushing the USD and USD Index higher again.
Since trading near 1.0830 a few days ago, it has been steady downward spiral for the Euro. the single currency has been weighed down with the increasing political risk now being priced into the French elections. Greece to has played its part, finally making the news again as the IMF digs its heels in on debt relief for the Greeks as a sustainable path to the future. This has in fact been their official and most sensible position for quite a long time now but has been subsumed into louder “noise” in the past few months. With Dutch, French and German federal elections this year, event risk will be aplenty in 2017.
EUR/USD had the knife twisted into it late in Asia trading as German Industrial Production came in much lower than expected.
In the short term, EUR/USD has support at 1.0660 on the hourly chart, followed by 1.0620 with resistance at 1.0705 and 1.0730.
Gained 60 ticks in the Asia session but the rally still looks somewhat unconvincing here. Yen is benefiting from a lot of safe-haven flows at the moment and has the Trump “currency manipulator” threat hanging over its head. At present, USD/JPY is flirting with an hourly trendline resistance at 112.17. resistance behind this comes in at 112.67 the 100-hour moving average. Key support remains at the 111.60 level.
The RBA left rates unchanged as expected this morning. The statement was more upbeat than in recent times citing higher China demand for all the things Australia digs out of the ground. AUD rallied to 7680 before falling in the face of a stronger USD generally to the lows around 7620. 7615 and then 7598, the 200-hour moving average are initial support. Resistance is at 7643 to 100 hour, and then the day’s highs at 7680.
Should have been the star of the day and for a while it was. With the RBNZ having to deal with a high currency, increasing inflation expectations, a roaring economy and an on fire housing market. Making them the envy of just about every other central bank in the world I should think. Things aren’t that simple of course but inflation expectations this morning came in much higher then expected.
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