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Currency markets continue to range

US dollar trading sideways

In a week loud on noise but thin on substance, currency markets ranged noisily last week. I expect more of the same this week, with things becoming more exciting next. US yields rose slightly on Friday, enough to lift the dollar index 0.13% higher to 92.64, where it remains in Asia. A 92.30 to 93.00 should contain the noise this week.

 

EUR/USD has edged lower to 1.1805 this morning after testing and failing at 1.1850 on Friday. Failure of 1.1800 could extend losses to 1.1750 this week 1.1750 to 1.1850 should contain. GBP/USD is almost unchanged at 1.3845 from Friday and looks to be mid-range between 1.3800 and firm resistance ahead of 1.3900.

 

Likewise, AUD/USD and NZD/USD closely barely changed on Friday, rising slightly to 0.7355 and 0.7110 today. Failure of support at 0.7345 for AUD/USD could extend losses to 0.7300, but NZD/USD looks well supported ahead of 0.7080. Both Antipodeans are well-placed to benefit from any quick rebound in risk sentiment this week, having weathered the worst of Covid-19 for now with markets, if not domestically.

 

USD/JPY remains firmly anchored in a sideways 109.50 to 100.50 range, as it has been for almost a month now. I am not taking my feet off the table or putting down my book until either 109.50 or 110.50 breaks on a daily closing basis.

 

That taper-talk has seen Asian FX edge lower today as the procession of neutral PBOC USD/CNY fixes continues, giving no alternative narrative for now. USD/KRW has climbed 0.40% to 1174.50 today after North Korea test-fired a cruise missile over the weekend. Such Pyongyang sell-offs are usually short-lived these days, and rightly so. USD/IDR, USD/MYR, USD/SGD and USD/THB are all 0.10% higher today, but Asian FX looks as adrift as the G-10 right now. I expect the non-descript range-trading to continue for the rest of the session barring a newswire surprise.

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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