Currency Trading Overnight
The fall of the US Dollar has finally taken a pause, and as a result the euro vs dollar has pulled back from its high to test the 1.4050 key support again, a level which has held firm to date. The pound vs dollar reacted in a similar way falling from its high above 1.64, with the pair falling through 1.6335 to trade as low as 1.6285. The dollar vs yen has not been able to hold levels above 94 and has spent most of the Asian session in a 30 pip range around the 93.65 level. Both, the euro yen and pound vs yen have also retraced from the highs overnight.
Currency Outlook Europe
Europe’s May trade balance is due to be released shortly followed by Canadian CPI at 11AM GMT. Final data this week will be the US housing starts for June. For the euro vs dollar the support level at 1.4050 is key this morning, and a weekly close above here keeps the pair bullish for next week. Expect the Dollar to closely follow movements of equity markets, and for now the day looks bullish with all indices in Europe opening positively. The pound vs dollar could remain very volatile, and there is plenty of space on either side, with initial support at 1.6260, and resistance at 1.6335.
For the dollar yen, 93.65 remains the key level, and we can move 30 pips up or down before the weekend closure. A high close indicates further yen weakness next week, and while trends indicate a further $ rise, we must not neglect the danger of a large fall that could take the pair rapidly down to 90.00.
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