Article / 14 November 2017 at 22:12 GMT

US Wrap: Mount Euro erupts

FX Trade Strategist /
NY Focus: EURUSD resistance and Italy’s FIFA World Cup dreams suffered the same fate: they were both blown away. Italy lost to Sweden and better-than-expected Eurozone data blasted EURUSD above the 1.1725-50 area to 1.1804.  At the same time, the US Dollar Index (USDX) broke support at 94.20 suggesting further US dollar weakness ahead.
The US dollar opened with gains against the majors except for the euro and Swiss franc. GBPUSD was eyeing support in the 1.3070 area. Perhaps disappointing CPI data wasn’t all that disappointing at 3.0% because sterling caught a bid and tracked EURUSD higher, rising from 1.3091 to 1.3182 before inching lower at the close.

USDJPY was already in retreat when it opened at 113.71 and it continued to slide to 113.32. The currency pair was undermined by a drop in US Treasury yields. Prices moved to 113.42 at the close.

AUDUSD and USDCAD moves mirrored each other. AUDUSD traded in a 0.7612-0.7647 range while USDCAD travelled in a 1.2702-1.2770 band. Both finished nearly unchanged from their opening levels.

Oil prices headed south throughout the morning on speculation of rising US crude inventories. WTI plunged 2.02%, from $56.58 to $55.44 on the rumour. It proved correct when the weekly API crude stocks change report showed a build of 6.5 million barrels.

Wall Street took note of global equity losses and the lack of progress on a tax reform deal and decided to sell stocks. The three major indices finished in the red.

 Blown away ... EURUSD resistance and Italy’s FIFA World Cup dreams both
suffered the same fate. Photo: Shutterstock

Wednesday Focus: If the drop below 94.20 support in USDX signals another leg lower in the US dollar, Wednesday may be sterling’s turn to shine. UK employment data is due, and an upside surprise in average earnings (forecast 2.1%) could be the catalyst.  

A gently descending trendline has contained topside moves since the middle of September. A break of 1.3230 would snap the downtrend and target 1.3350.

GBPUSD hourly
Source: Saxo Bank. Create your own charts with SaxoTrader; click here to learn more 

– Edited by Gayle Bryant

Michael O'Neill is an FX consultant, currency strategist and author of the Trade of the Day at Follow Mike or post your comment below to engage with Saxo Bank's social trading platform.
It was a low importance economic data from Eurozone, nothing new in policies.No future rate hikes, no tapering, same QE.... How could it get euro so high?.. The market is irrational.
Michael O'Neill Michael O'Neill
LOL "Markets can remain irrational longer than you can remain solvent". John Maynard Keynes
indeed :-)


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