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Greenback Strength Extends, EURUSD Cracks Support

FOREX
  • The dollar index has made fresh three-week highs on Thursday, and has extending just shy of 1% to reach 1.0750 as we approach the APAC crossover. Greenback support was underpinned throughout the US session by stronger than expected Philly Fed data and lower initial jobless claims.
  • Notable declines in EUR and GBP as price action has gained momentum following the breaks of short-term supports at 1.0123 and 1.2004 respectively. Both currencies trade with steep 1% losses on the day, extending their gaps lower from last Friday's close.
    • 1.0007/0.9952 Low Jul 15 / 14 and the bear trigger remain the key levels for EURUSD on the downside.
  • Despite the move lower in US yields, the bid for the dollar spread across the currency space in late US trade, prompting USDJPY to spike through resistance at 135.50/58, promptly rising to a high of 135.90. The first level on the topside is 135.96, 61.8% retracement of the Jul 14 - Aug 2 downleg which has held for now. Above here targets 136.58, the Jul 28 high.
  • In emerging markets, the firmer greenback weighed on LatAm FX as well as the South African Rand. USDTRY looks set to close above 18.00 for the first time, following the CBRT’s surprise 100bp cut in the face off surging domestic inflation.
  • UK and Canadian retail sales data round off the week. There is no US data on Friday which should keep any FedSpeak and geopolitical developments in focus.
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  • The dollar index has made fresh three-week highs on Thursday, and has extending just shy of 1% to reach 1.0750 as we approach the APAC crossover. Greenback support was underpinned throughout the US session by stronger than expected Philly Fed data and lower initial jobless claims.
  • Notable declines in EUR and GBP as price action has gained momentum following the breaks of short-term supports at 1.0123 and 1.2004 respectively. Both currencies trade with steep 1% losses on the day, extending their gaps lower from last Friday's close.
    • 1.0007/0.9952 Low Jul 15 / 14 and the bear trigger remain the key levels for EURUSD on the downside.
  • Despite the move lower in US yields, the bid for the dollar spread across the currency space in late US trade, prompting USDJPY to spike through resistance at 135.50/58, promptly rising to a high of 135.90. The first level on the topside is 135.96, 61.8% retracement of the Jul 14 - Aug 2 downleg which has held for now. Above here targets 136.58, the Jul 28 high.
  • In emerging markets, the firmer greenback weighed on LatAm FX as well as the South African Rand. USDTRY looks set to close above 18.00 for the first time, following the CBRT’s surprise 100bp cut in the face off surging domestic inflation.
  • UK and Canadian retail sales data round off the week. There is no US data on Friday which should keep any FedSpeak and geopolitical developments in focus.