Dollar bulls dominate markets

24 April, 2018

The USD has exploded back onto the scene today as USD bulls kicked well into gear and lifted the USD higher against all the major pairs and commodities. This was sparked by the recent jump in US yields which is nearly at the 3% mark for 10 year yields, and more importantly it was all backed up with positive economic data today to really push things along. US manufacturing PMI had a strong reading lifting to 56.5 (55.2 exp) showing that the US economy is continuing to expand. Existing home sales also lifted strongly to 5.6M (5.55M exp), showing that consumers are also positive about the state of the US economy - even with all the recent trade issues and recent political turmoil.

One of the key movers today was of course the USDJPY, which has absolutely exploded in the face of all the bullish movement. Clearly traders were keen to exist from the traditional safe haven and seek risk elsewhere. As such the USDJPY has been a keen target, especially with Abenomics still being a factor and the Japanese economy likely to stand still compared to the volatile nature of the US economy.  For the most part the rises pushed through previous resistance at 107.718, and have lifted up in to the high 108 levels with a potential target of 109.347 for bullish traders. It's likely that any bearish movement would come up hard against support at 107.718 as this level has been strong in recent times.

One of the other key movers has of course been the AUDUSD, which has slipped down the charts. Comments just earlier before were that the Reserve Bank of Australia was looking to lift rates in the future. However, in the present climate, that seems like it may be some time off. With markets not even pricing in an increase in the next few months, based off the current economic data at home I would largely expect that a large increase in inflation would be the catalyst for the RBA to move rates, as right now unemployment is gradually drifting lower and it's only inflation which has been lagging in recent times. That being said with the recent currency moves we could in fact see inflation increase via the exchange rate mechanism.

That being all said and done, the AUDUSD continues to be under the paw of the bears, and drifting lower and lower at this stage. Traders will likely have a long term target of 0.7546 for bearish movements lower. Any reversal of fortune is likely to come unstuck at 0.7658 which will be acting as key resistance in this market - that entire area being very hard for traders to crack unless the fundamentals are completely behind them. So for now the AUDUSD is under pressure and this looks set to continue with the downward movements we are seeing.


Source link  
Dollar index drops after US retail sales contraction

The Dollar index (DXY) immediately fell by some 0.2 percent, dropping below the 98.0 psychological level once more...

Dollar's fall halted at 98.4 support level

The Dollar index (DXY) fell by about 0.38 percent before paring back losses, as the 98.4 support level kicked in. Although the September US inflation...

Dollar paring early October losses

The Dollar index (DXY) continues to pare losses seen earlier this month, as investors await the minutes from the September FOMC meeting...


Gold hammered by resurgent Dollar

Gold tumbled more than $30 on Wednesday, almost breaking below $1500 as political uncertainties in the United States and Brexit...

Time to prepare for 100 in the Dollar Index?

The Greenback is on a tear and the breach above 99 in the Dollar Index makes 100 look very appetizing on the menu. The stunning run of buying...

Time to expect a jump to $60 in WTI Oil?

The breaking development that transpired throughout the weekend, where attacks on Aramco Oil plants in Saudi Arabia could take away up to 5.7...


Risk sentiment brightens

A wave of optimism is sweeping across financial markets with stocks in Asia pushing higher on renewed optimism over a potential breakthrough...

Pound regains mojo on positive GDP

It has not been a bad start to the trading week for Sterling which is standing tall against every single G10 currency as of writing. Mildly encouraging remarks...

Gold finds comfort near six-year high

Everyone wanted to piece of Gold yesterday after US manufacturing activity decelerated in August for the first time in three years...

  


Share it on:   or