US dollars withdraw overnight
Currency markets are operating in Asia after a non-descriptive session overnight. The US dollar returned some of its most recent gains overnight, with the dollar index retreating 0.28% to 90.78. It has hardly changed in Asia, it rises by two points to 90.80 as trading between the most important currencies remains deadly this morning.
It would be too early to say that the American card press has gone its course with the American data set to impress this week, which can see that the US return is firm again. The technical picture still points to more downward pressure on EUR / USD and GBP / USD, and more upward pressure on USD / JPY. Support for EUR / USD remains its 100-day moving average at 1.2025, followed by 1.1950. GBP / USD has support at 1.3860, followed by the rising wedge at 1.3785. USD / JPY withdrawals should be limited to the 106.50 range.
Both Australian and New Zealand dollars tested several weeks of support yesterday before recovering. However, their overnight meetings remain modest, and all bubbles are likely to see them re-test these channels. The support for AUD / USD is 0.7740 today and for NZD / USD 0.7200. Errors fail with 200 points for both in the coming week.
Asian currencies are quiet, with the PBOC setting USD / CNY lower at 6.4565, comfortably in the middle of the comfort zone of 6.4000 / 6.5000 PBOC. The Thai baht, the Philippine peso and the Indonesian rupee have eased somewhat today, reflecting the investor nerve on US bond yields. Otherwise, however, the Singapore dollar and the Malaysian ringgit have gained somewhat.
Central banks are generally “on message” and release as many pigeons as possible and rightly concentrate on the fragile employment due to the pandemic. Overall, the picture of the foreign exchange markets is a wait and see, with the US dollar rising still the path of least resistance. We can expect the rest of the week to be busy for the dollar, with the release of US ADP employment, the ISM survey and non-farm wages.
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