The dollar continues to strengthen under optimistic signs

The dollar continues to strengthen under optimistic signs

The dollar continues to strengthen under optimistic signs

dollar continues to strengthen

 

Hawkish talk from NY Fed President William Dudley lifted US Treasury yields and the Dollar. Dudley said that inflation would pick up as the labour market improves and wages rise. The Dollar Index (USD/DXY) climbed back to close at 97.45 (97.14 yesterday).

Wall streets stocks rallied with the S&P 500 up 0.8% to record highs as risk appetite returned.

Brent Crude Oil prices fell to close at US$46.85 (US$ 47.33), fresh one month lows. Libyan oil output was boosted to the most in 4 years.

EUR/USD – dropped to close at 1.1148 (1.1202 yesterday). While President Macron won by a landslide in the French parliamentary elections, voter turnout was low.
USD/JPY – rallied to close up 0.65% to 111.52 (110.87 yesterday) on higher US bond yields.
GBP/USD – closed mildly lower at 1.2737 from 1.2777 yesterday.
AUD/USD – slipped to 0.7590 from 0.7617.

 

The confidence in the US expansion by the Fed’s Dudley saw yields rise, a strong pillar for the Dollar. Ten Year Treasury yields finished up at 2.19%, up four basis points. In contrast, ten year yields in Rival currency countries were mostly flat. Germany 10 year bund yields were flat (0.28%). Japanese 10 year JGB yields were lower to 0.04% from 0.05% yesterday. This will continue to be a driver for the Dollar, which is likely forming a base.
Remarks from other central bank and various Federal Reserve heads will be closely watched.

EUR/USD – Immediate resistance now lies at 1.1220. There is good support around 1.1140 (overnight low was 1.1143). The Macron party’s landslide win in the French parliamentary elections was widely expected and the voter turnout was low. We highlighted the fact the market positioning in the Euro is extreme. Net speculative Euro longs were at the highest in over 6 years. (CFTC/Reuters report for the week ended June 13). Look to sell rallies in the Single Currency.

 

EUR/USD

 

USD/JPY – The differential between the US and Japanese 10 year bond yields is the strongest driver in this currency pair. This started to widen yesterday. The Dollar climbed 0.66% against the Yen to end at 3 week highs. Immediate resistance lies at 111.70 and then at 112.00. Initial support comes in at 111.20 and then at 110.80. A week ago we were trading at the low 109.00 area. Now we are back near the top end of the recent range between 108.50-113.50. It’s wise to keep this in perspective given that the speculators are short in Yen. It would take a further widening in the yield differentials to see the topside resistance in USD/JPY break.

 

USD/JPY

 

GBP/USD – has struggled to gain above 1.2800 on the uncertainty of Brexit. There is immediate support at 1.2705. Resistance lies at 1.2770. Broad-based US strength combined with the uncertainty of Brexit will pressurise the Pound and we could see a grind lower. Initial discussions on Brexit appear to have gone well. The loss of PM May’s party in the election initially raised the possibility of “soft” Brexit. However, the uncertainty alone will weigh on Sterling. No currency like uncertainty. Likely range 1.2690-1.2760.

 

GBP/USD

 

AUD/USD – In true Aussie fashion, grinds lower. The Australian Dollar lost ground after failing to break through strong resistance at 0.7630. Today, there is support at 0.7580 and then at 0.7560. Immediate resistance has come lower to 0.7610. Yesterday Moody’s cut ratings on Australia’s big banks on housing concerns. The RBA releases it’s May Monetary Policy Meeting minutes later on today. Likely range 0.7565-0.7615. Prefer to sell rallies in this environment.

 

AUD/USD

 

Now is your chance to make a profit!

Open an account here!

 

***Information contained in this news letter are gathered from third parties and should not be regarded in any way as trade advice or recommendations by CM Trading. CM Trading does not recommend or advise traders or investors in their decision making, but merely provides information from the market for its clients as additional information being made available as per the events occurring in the financial markets.

 

 

HIGH RISK WARNING:

Trading Foreign Exchange (Forex) and Contracts for Differences (CFD’s) is highly speculative, carries a high level of risk and may not be suitable for all investors. You may sustain a loss of some or all of your invested capital, therefore, you should not speculate with capital that you cannot afford to lose. You should be aware of all the risks associated with trading on margin.

© Copyright 2015 – CM Trading – All rights reserved 

 
Share on facebook
Facebook
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on whatsapp
WhatsApp
Share on email
Email

Recent .

Dogecoin is going to the moon… literally!

Dogecoin is going to the moon… literally!  While the cryptocurrency markets have been put through the mill the past few weeks, Dogecoin managed to steal the spotlight …

Read More →
Stock of the Week: Apple in huge demand, beats estimates by billions.

Stock of the Week: Apple in huge demand, beats estimates by billions. Apple beat estimates for quarterly earnings by billions of dollars. We look at …

Read More →
Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!  

Stock of the week: Facebook makes CEO Mark Zuckerberg $8 billion in just one week!   It has been a momentous week for Facebook CEO Mark Zuckerberg who …

Read More →
Big Tech earnings roll in – Huge profits for Google, Microsoft and more! 

Huge profits for Google, Microsoft and more! Major big tech companies have released their quarterly earnings. We look at how some of the world’s biggest businesses performed so far this year!     Google, …

Read More →
MetaTrader 4 vs MetaTrader 5 – which is the better platform?
Bitcoin bounces back: Is buying the dip worth the risk?

Bitcoin bounces back: Is buying the dip worth the risk?  Bitcoin has recovered some of its losses following its fall from a record high of $65,000. Considering the crypto king’s astonishing performance in 2021, should …

Read More →
Oil summit: Waste of time
Oil market outlook: bumpy ride ahead?

2020 has been disastrous for the oil markets, however, it appears that oil has recovered most of its losses and is now hovering near pre-pandemic levels. In today’s article we will take a look at oil’s recent performance and explore the opportunities that may lie ahead.

Read More →
˄