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US Holiday Prompts Narrow FX Ranges, DXY Marginally Lower

  • The greenback tracked marginally lower during the APAC session on Monday and has maintained the slightly softer price action to start the week. The USD index remains around -0.25% below NY closing levels from last Friday, residing around 104.40.
  • Firmer equity futures are appearing the main catalyst for this dip, boosting the likes of AUD, NZD and CAD which look set to post +0.3% gains for the session.
  • Strong leads from China stocks regionally bolstered the Chinese Yuan, which also outperforms to start the week.
  • As expected, global markets have remained very quiet amid the US market closures and FX ranges throughout NY trade have echoed this narrative. EURUSD and USDJPY remain very close to unchanged with the latter’s trend conditions remaining bullish.
    • The rebound from Thursday’s low suggests a recent USDJPY correction is over. The recent print above 135.00 maintains the positive price sequence of higher highs and higher lows. The focus is on a climb towards 136.04, a Fibonacci projection. Initial firm support is seen at Thursday’s low of 131.50, just below the 20-day EMA.
  • Looking ahead, RBA Governor Lowe is due to speak about the economic outlook and monetary policy at an event co-hosted by the American Chamber of Commerce and Australia and New Zealand Banking Group, in Sydney. Q&A expected.
  • Following this event, the RBA minutes from the June meeting are due for release.

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