Currency Markets Overnight
The US Dollar kept weakening till the New York close on Wednesday,correlating with rising stock markets around the world. The US dollar took turns to soften against Cable first, followed by the Euro and then spreading to the Aussie Dollar and finally the Canadian Dollar. The euro vs dollar reached a high of 1.4130, whilst Cable traded 1.6465. During the Asian session the US currency finally found some support and the Euro backed down to 1.4050 with Cable softening a 100 pips to 1.6365. Both pairs are now supported at the old resistances, and these are key levels to watch for today.
For the dollar vs yen, the 93.65 resistance popped late European afternoon and the Dollar pushed on to reach 94.45 by closing time. At their opening, traders in Tokyo took advantage of the high levels and the pair pulled back to 93.70. The euro vs yen reached a high of 133.35 before retracing 1%,whilst the pound vs yen traded as high as 155.10 from where it returned to 153.50 later in the trading session.
Currency Markets – European Trading
Today’s weekly US jobless claims are expected to fall slightly, and after that markets will be waiting for the US Philadelphia Fed Index for July at 2pm GMT. Apart from these two key pieces of fundamental news, all eyes will be on the equity markets, as a sudden turn is likely to stop the US Dollar weakness very fast.
Euro dollar support lies at 1.4050, and should it hold, there is room to move on higher with 1.4130 the initial stumbling block. If Cable keeps hold at 1.6360, it has space to bypass 1.6460 and rise towards 1.67, whilst the Japanese yen remains under pressure, now above the key 93.65 level, and in bullish territory, and could rise further to 95.30. The Yen crosses rose and remain in positive territory as well, but next resistance levels are not far away with 134 in the euro yen and 156 in the pound vs yen.
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