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Currencies on hold awaiting US return

A US holiday overnight was enough to send currency markets into hibernation, with the majors almost unchanged from yesterday and showing few signs of life in Asia. The dollar index rose 0.10% to 92.20, only to edge lower to 92.15 in Asia as the major currencies remain in range-trading mode. 

 

One exception was GBP/USD, which slipped 0.20% to 1.3835 overnight, only retrace all those losses, rising to 1.3850 in Asia. As long as its 200-day moving average (DMA) holds at 1.3820, it remains on track to rally through 1.3900 on its way to retesting 1.4000 over the next week, perhaps sooner. Similarly, EUR/USD should rise through 1.1900 and retest 1.2000. 

Both AUD/USD and NZD/USD appear to be consolidating before resuming their recoveries once New York returns. The RBA will be good for some short-term volatility on AUD/USD, but I can’t see it falling through 0.7400, even if the RBA is uber-uber dovish.

 

Asian currencies are very quiet, content to consolidate their recent gains. The Malaysian Ringgit has outperformed over the past few sessions, helped by a new Prime Minister and rising oil prices. With oil rising today, USD/MYR is poised to fall from 4.1400 to 4.1200. 

 

Of course, much of this outlook assumes that New York will return to work with an invigorated risk appetite after Fridays’ Non-Farms torpedoed the Fed taper anytime soon. That should see the Commonwealths and Asian currencies continue to outperform, and the US Dollar selling is resuming. Mrs Halley “fondly” calls me a Kiwi Kentang. (Bahasa Indonesia for potato) Let’s see if I am a genius tomorrow or a potato. 

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Jeffrey Halley

Jeffrey Halley [4]

Senior Market Analyst, Asia Pacific
With more than 30 years of FX experience – from spot/margin trading and NDFs through to currency options and futures – Jeffrey Halley is OANDA’s senior market analyst for Asia Pacific, responsible for providing timely and relevant macro analysis covering a wide range of asset classes. He has previously worked with leading institutions such as Saxo Capital Markets, DynexCorp Currency Portfolio Management, IG, IFX, Fimat Internationale Banque, HSBC and Barclays. A highly sought-after analyst, Jeffrey has appeared on a wide range of global news channels including Bloomberg, BBC, Reuters, CNBC, MSN, Sky TV, Channel News Asia as well as in leading print publications including the New York Times and The Wall Street Journal, among others. He was born in New Zealand and holds an MBA from the Cass Business School.
Jeffrey Halley
Jeffrey Halley

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