The dollar is down again after the negative retail sales data and the pound is above the 1.43
The US Dollar fell anew after failing to gain ground on upbeat US Retail Sales which bettered forecasts. US Yields were up with the Two years rising to 2.38% (2.36% yesterday), its highest since 2008. Risk appetite rose, lifting stocks as markets viewed the US-led air strike over Syria as a one-off event.
Outlook: Fed speakers Dudley (New York) and Kashkari (Minneapolis) saw prospects for continued Fed rate increases. The yield on the US Ten-year treasury was flat at 2.83%. Germany’s Ten-year Bund yield rose to 0.52% from 0.51% yesterday.
Bearish negative sentiment continues to weigh on the US Dollar which continues to find few friends then
marketplace. The Dollar Index (USD/DXY), which tracks the Greenback against a basket of six currencies, fell 0.45% to 89.428 (89.77 yesterday).
Trading View: The warning signs are there that a Dollar rebound is ripe. Neil Kashkari, Minneapolis Fed President, a noted dove said he saw three Fed rate hikes this year and is sounding… well, bullish. Can a leopard change its spots? It seems the dove has turned bullish…
The price action though suggests that sentiment toward the Greenback is overwhelmingly bearish.
The Dollar Index (USD/DXY) – closed down at 89.428 just above immediate support, currently at 89.40. The next support level is at 89.20 and then 89.00. A break of 89.00 could see us back to 88.50, this year’s lows. Immediate resistance can be found at 89.60 and then 89.80 (overnight high was 89.82). We would need to see a break above 89.80 to get more topside mileage. Look to buy dips, respect the ranges. Likely range today 89.60-90.00
EUR/USD – rallied back from the daily low (1.2323) to close at 1.2385. Immediate resistance in the EUR/USD can be found at 1.2400 (1.2395 overnight high). A breakthrough 1.2400 could see 1.2430-1.2450. Immediate support lies at 1.2350 and then 1.2320. We have yet to see a decent correction in the market positioning in spite of less than stellar Euro-area economic data. Likely range today 1.2340-1.2400. Prefer to sell rallies.
GBP/USD – outperformer, soaring up to 1.4344 overnight, January highs, close to post-Brexit highs as well. The British Pound has found new optimism on a Brexit transition deal between the European Union and the UK and the prospect of a BOE rate hike next month. Sterling also advanced against the Euro. The EUR/GBP crossed slipped further to 0.8627, lows not seen since May 2017. UK employment, wages, and inflation data releases tonight (see below) are key to the BOE rate decision next month. Immediate resistance lies at 1.4350 and then 1.4380. Immediate support can be found at 1.4300 and 1.4280. Likely range today 1.4280-1.4350.
USD/JPY – closed slightly lower at 107.15 from 107.35 yesterday weighed by overall weakness in the Greenback. A report showed that polls in Japan showed falling support for Prime Minister Abe. Which was highlighted in one currency report I read this morning as Yen positive! In fact, this should put a base to any further USD/JPY downside. USD/JPY has immediate support at 107.00 and then 106.80. Immediate resistance lies at 107.40 and then 107.60, which was the overnight high. Over the weekend, the USD/JPY topped out at 107.80. This should serve as a temporary top. Likely range today 107.00-107.60. Look to buy dips
USD/ZAR – As trade tensions and the Syrian conflict roiled markets this month, South Africa’s rand (USD/ZAR) has been stuck in an unusually narrow range for one of the world’s most volatile currencies.
It can’t last, according to analysts at Rabobank and Danske Bank. With the currency holding between R11.80 and R12.15 per dollar.
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