Mid week currency markets report

DISCLAIMER: The information produced by aQuant is of a general nature only. It is not personal financial advice. It does not take into account your objectives, financial situation, and personal needs.
USD is practically neutral so far, during the current week as nothing has changed regarding the expectations of the Monetary Policy from the Fed. The announcements in the US were not encouraging. The Manufacturing PMI was released significantly lower than the expectations and just the Factory Orders which does not have a great degree of importance was better than expected. The week will become more important from now on as there is much economic news to be announced: Services & Composite PMI in the US today, Interest Rates and Monetary Policy in the UK on Thursday, and of course, the NFPs (Non-Farm Payrolls) in the US on Friday.
EURUSD (current price 1.1862) is slightly bearish this week but it seems that the markets are waiting for the real action for the rest of the week since the volatility is low. There is a clear downtrend for the pair since the end of May which did not change after the bullish reaction last week and after the weakness of the USD. The Eurozone (Manufacturing PMI, Retail Sales) & Germany (Manufacturing & Composite PMI, Retail Sales) had better economic results but EURUSD could not take advantage of it. With no more important announcements till the end of the current week, the dominator of the pair will be USD. NFPs will play a great role in this. The sellers of the pair, still looking at the support of 1.17 as a target.
GBPUSD (current price 1.3930) continues the bullish trend of the last week. Markets and traders wait for the Bank of England Interest Rates decision and the Monetary Policy, followed by the Bailey speech and there are certain expectations that may be some hints for a tighter Monetary Policy. The economic calendar in the UK has nothing more important to contribute so after the Bank of England, the major importance will come from USD. Many traders dream of 1.40 though.
USDJPY (current price 108.98) is in a clear downtrend channel since the beginning of the last week, losing 109 after 110. The bond yields dropped more (US 10-year bond yield is under 1.20%), creating strong bearish pressure on the pair. Japan had good economic results this week, regarding inflation and PMI, making JPY stronger. For the sellers, the next important support is at 107.50.


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