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Coming up in the Asia-Pac session on Monday:

USDCAD TECHS

Impulsive Rally Extends

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Late Eurodollar/SOFR/Treasury Option Roundup

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USD Index Matches Wednesday Low And Bounces

FOREX
  • The first half of Thursday’s session in currency markets saw general dollar weakness as markets continued to ponder the latest dip in US CPI data. As such, the USD index gravitated slowly towards Wednesday’s low print but momentum to the downside abruptly halted, and the greenback found firm support at this level.
  • Fed rhetoric since the data points to officials being closely aligned that victory should not be declared and that the path for monetary policy in the short-term does not necessarily change. In similar price action to late yesterday, market participants were happy to sell rallies in US rates and the bear steepening of the yield curve appeared to support the US Dollar during the second half of the session.
  • USDJPY once again traded in a volatile manner and was able to trade down to 131.74 amid the initial greenback weakness. However, the turnaround prompted a significant 125 pip rally back to the 133 mark as we approach the APAC crossover.
  • EURUSD price action was considerably more subdued and the pair was unable to make a new high above 1.0368. A slow grind lower to 1.0315 as of writing indicates the pair may once again close below the channel top intersection (1.0344) and the notable breakdown pivot at 1.0341 dating back to Jan 2017. Note that a deeper pullback would be a bearish development and suggests a reversal lower inside the channel. Watch support at 1.0123, the Aug 3 low.
  • Overall, daily adjustments for majors have remained subtle with NZD (+0.41%) outperforming and CNH (-0.31%) the laggard.
  • First estimate of Q2 GDP from the UK highlights Friday’s European data calendar before Eurozone Industrial Output figures. In the US, UMich Consumer Sentiment data rounds off the week.
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  • The first half of Thursday’s session in currency markets saw general dollar weakness as markets continued to ponder the latest dip in US CPI data. As such, the USD index gravitated slowly towards Wednesday’s low print but momentum to the downside abruptly halted, and the greenback found firm support at this level.
  • Fed rhetoric since the data points to officials being closely aligned that victory should not be declared and that the path for monetary policy in the short-term does not necessarily change. In similar price action to late yesterday, market participants were happy to sell rallies in US rates and the bear steepening of the yield curve appeared to support the US Dollar during the second half of the session.
  • USDJPY once again traded in a volatile manner and was able to trade down to 131.74 amid the initial greenback weakness. However, the turnaround prompted a significant 125 pip rally back to the 133 mark as we approach the APAC crossover.
  • EURUSD price action was considerably more subdued and the pair was unable to make a new high above 1.0368. A slow grind lower to 1.0315 as of writing indicates the pair may once again close below the channel top intersection (1.0344) and the notable breakdown pivot at 1.0341 dating back to Jan 2017. Note that a deeper pullback would be a bearish development and suggests a reversal lower inside the channel. Watch support at 1.0123, the Aug 3 low.
  • Overall, daily adjustments for majors have remained subtle with NZD (+0.41%) outperforming and CNH (-0.31%) the laggard.
  • First estimate of Q2 GDP from the UK highlights Friday’s European data calendar before Eurozone Industrial Output figures. In the US, UMich Consumer Sentiment data rounds off the week.