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FXStreet (Mumbai) - US dollar strength remained the underlying theme in Asia, as the greenback continued to ride higher on the back of the recent upbeat macro data releases from the US which re-ignited earlier rate lift-off talks.
USD/CAD emerged the best performer this session followed by the USD/JPY pair, which remained strongly bid above 119 handle, however, failed to breach 119.50 levels on several occasions.
On the losing end, the entire Antipodean complex trades in red, with the Australian dollar leading the pack mainly driven by a dovish speech by RBA Governor Stevens yesterday. RBA Stevens pitched for further rate cuts if necessary which send the Aussie tumbling back on the 0.76 handle. However, a non-event RBA minutes released early today calmed rate cut concerns and drove the Aussie higher circa 0.77 barrier.
Meanwhile, the NZD/USD pair also followed suit and remained in red around the mid-point of 0.76 handle as concerns over softer NZ CPI print also weighed on the Kiwi.
Key headlines in Asia
RBA minutes: Appropriate to hold interest rates steady for the time being
RBA Stevens say's Aussie will likely fall further - Westpac
AUD/USD testing commitments at 0.7700 post RBA minutes
USD/JPY rejected at 119.50
Heading into Europe
A data-light calendar extends in today’s session as well with German ZEW economic sentiment the only major driver for EUR, GBP trades.
The key ZEW German indices will be published at 9GMT. Current condition (expect 56.5 rising from 55.1) and economic sentiment (expect 55.3 rising from 54.8) are both likely to improve. There is also a ZEW Euro zone economic sentiment index. It should rise from 62.4 to 65.
Later in the North American session, we have Canadian Wholesale volumes data to be reported at 12.30GMT. Canadian wholesales sales data is expected to show a rise of 0.2% in the reported month versus the previous drop of -3.1% in the previous month.
EUR, GBP Technicals
Camilla Sutton, Chief FX Strategist at Scotiabank, expects the pair to trade range bound in the recent 1.0458-1.1052 band in the near term. She notes, “Data this week is light across Europe, however PMIs will be important in order to maintain the tone of progress”.
“We see Greece and liquidity risk as a major weight against EUR; but outside of that the bigger broader outlook has become far more balanced, leaving EUR still trading within its broad 1.0458 to 1.1052 range. The currency will need a significant catalyst to break outside of this range”.
While for GBP/USD, Valeria Bednarik, chief analyst at FXStreet explains,
“The pair maintains a short term bearish tone, as the 1 hour chart shows that the price develops below a bearish 20 SMA, whilst the technical indicators head lower below their mid-lines."
"In the 4 hours chart the price broke below its 20 SMA and the 200 EMA, both converging in the 1.4910 region acting now as the immediate intraday resistance, while the technical indicators head lower around their mid-lines, supporting the shorter term view."