FX Strategy 29 Jul 19

CHF and JPY are the top G10 FX gainers today, up 0.07% and 0.01% vs the dollar while GBP and NOK are the top losers, down -0.42% and -0.12% vs the dollar. The U.S. dollar edged to a two-month high in Asia today on better-than-expected U.S. GDP data seen last week which helped U.S. yields rally. The Market is now expecting the Fed to cut interest rates by 25 basis point this week but the key question is whether the Federal reserve will enter a full rate cut cycle or will this be a one-off move. In the Asian equities space, the Nikkei 225 closed down -0.19% at 21,616.80, Hang Seng closed -0.97% at 28121.32 and Kospi ended -1.78% at 2029.48. The European equities were trading mixed with the FTSE 0.93% at 7619.04, DAX 0.06% at 12427.04, and CAC -0.04% at 5607.58. In the rates market, global yields were trading mixed; the US 10-year yield was trading at 2.0633% and the Bund 10-year yield trading at -0.395%. In the energy space, the Brent (front month) is trading down (-0.74%) for the day at $62.99.




Economic Calendar



10-year Yields Chart (6-month)



USD-Index Daily Chart (6-month)



Brent Front Month Daily Chart (6-month)



Trade Weighted Basket Hourly (two-week)




Major Currency Pairs


EURUSD Chart (Two-week)



Strategy: Support at 1.1110 for 1.1200
Short-term view: EUR/USD support remains at 1.1110, a move higher targets key points at 1.1167 and 1.1200. Below 1.1110 to open 1.1078 and possibly 1.1019.


GBPUSD Chart (Two-week)



Strategy: Resistance at 1.2381 for 1.2306
Short-term view: GBP/USD resistance at 1.2381 momentum is bearish and we see a deeper dip to 1.2306, likely 1.2243. Above 1.2381 to open 1.2433.


USDJPY Chart (Two-week)



Strategy: Resistance at 108.73 for 108.15
Short-term view: USD/JPY broke resistance at 108.37 and has held around our level of 108.73. Above 108.73 opens 109.15 and 109.47 in the short-term. A move lower opens the potential for 108.15 and 107.87.


AUDUSD Chart (Two-week)



Strategy: Support at 0.6877 for 0.6950
Short-term view: AUD/USD short-term downtrend continues, we look for a hold at 0.6877 but a move lower would bring 0.6830 into play. Above 0.6950 we look for 0.7009 in the immediate short-term.

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