EUR/USD bounces off lows, looks to retake 1.0600
After bottoming out in fresh 2016 lows near 1.0580, EUR/USD is now looking to regain the 1.0600 neighbourhood ahead of the opening bell in Euroland.The pair met increasing selling pressure following auspicious results from the US docket on Thursday, showing healthy inflation figures and solid readings from the labour market and the housing sector, all supportive of the buck.Spot dropped as low as the 1.0580 area during overnight trade, as the dollar continued to gather traction after the testimony by Chair J.Yellen paved the way for a rate hike ‘relatively soon’. CME Group’s FedWatch tool sees the probability of a Fed’s move in December at nearly 91% based on Fed Funds futures prices.In terms of the US Dollar Index, the buck climbed well above the 101.00 handle, levels last seen in April 2002.Second tier data is expected later in the euro area, whereas speeches by St. Louis Fed J.Bullard (voter, dovish), New York Fed W. Dudley (permanent voter, neutral), KC Fed E.George (voter, hawkish) and Dallas Fed R.Kaplan (2017 voter, neutral) should keep the attention on the dollar.The pair is now losing 0.26% at 1.0596 facing the next support at 1.0538 (low Dec.3 2015) ahead of 1.0519 (low Apr.13 2015) and finally 1.0457 (2015 low Mar.16). On the flip side, a break above 1.0763 (high Nov.16) would aim for 1.0826 (high Nov.14) and then 1.0848 (low Oct.25).
GBP/USD struggles to extend the recovery above 1.2400
The bears remain in control as we head into early Europe, keeping any recovery attempt in GBP/USD short-lived above 1.24 handle.The major continues to trade around a flat-line in early Europe, as the pound corrects sharp declines witnessed yesterday after the demand for the US dollar returned to markets, following Yellen’s optimistic remarks. Yellen noted in her testimony that a relatively sooner rate hike is appropriate, should the incoming data add further to the signs of strengthen labor market and rising price pressures.Markets now await the European open for fresh USD flows, while higher treasury yields continue to keep the upside in check. The spot is last seen exchanging hands at 1.2397, down -0.20% on the day. Next in focus for the major remains BOE member Broadbent’s speech and Fed speaks scheduled later on Friday. At 1.2420, the pair finds immediate resistances placed at 1.2440/43 (5-DMA/ daily pivot), 1.2472 (10-DMA) and 1.2500 (psychological levels). While supports are lined up at 1.2379 (daily S1) and 1.2349 (Nov 9 low) and below that at 1.2300 (round number).
USD/JPY: Bulls gather pace for further upside, near 110.65
The bulls extend their control after Yellen-led extensive rally, now pushing USD/JPY further into the green zone, in a bid to test fresh multi-month highs on 110 handle. A brief phase of upside consolidation in the US dollar against its major competitors, has paused the rally in USD/JPY, with the bulls now taking a breather before a slew of Fedspeaks due later today, which will provide fresh insights on the US interest rates outlook, particularly after yesterday’s comments from Fed Chair Yellen almost confirmed a Fed rate hike next month.Focus will also remain on the price-action behind the US dollar and treasury yields, as the European traders will hit their desks and react to the Yellen commentary. The major is last seen exchanging hands at 110.68, up +0.50% on the day, having moved-off five-month tops reached at 110.78 in early Asia.In terms of technicals , the immediate resistance is located at 110.85 (June high). A break above the last, the major could test 111 (zero figure) and 111.30 (daily R2) beyond the last. While to the downside, the immediate support is seen at 110 (zero figure) next at 109.61 (daily pivot) and below that at 109.45 (5-DMA).
AUD/USD well offered for third straight session
The AUD/USD pair extended near-term bearish trajectory and maintained its offered tone for the third straight session amid broad based greenback strength.The US Dollar extended overnight gains led by Fed Chair Janet Yellen's testimony, which reinforced market expectations for a December rate-hike action and dragged the pair to the lowest level since late June. The pair, however, has managed to bounce-off multi-month lows and is currently trading around 0.7390-95 band. Following a break below the very important 200-day SMA, coinciding with 0.7500 psychological mark, bears remained in full control and the pair lost over 350-pips from post-US presidential election swing high. The pair now seems all set to post second consecutive week of steep losses from nearly 7-month high level touched during the early part of the month.Later during the day, speeches from various FOMC members, including James Bullard, William Dudley and Esther George, would be now looked upon for the Fed's next monetary policy move and should provide fresh impetus for the pair. With RSI nearing oversold conditions, the pair seems more likely to continue finding some support near 0.7370 region, which if broken decisively is likely to accelerate the slide towards 0.7330 horizontal support before the pair eventually drops to testing 0.7300 round figure mark.On the upside, recovery beyond 0.7415-20 resistance (session peak) might now confront resistance near 0.7440-45 area above which the recovery could get extended but is likely to be capped at 0.7500 psychological mark.
USD/CHF remains confined below 1.0100
The USD/CHF pair moved-off mutli-month highs, although remains in close vicinity of 1.01 handle as the greenback continues to rule the roost amid increased hopes of a Dec Fed rate hike.Currently, the USD/CHF pair trades +0.13% higher at 1.0084, unable to regain 1.01 handle. The bulls continue to guard 1.01 barrier, restricted any bullish attempt in USD/CHF back above the last, as the greenback extends its consolidative trend into early Europe, awaiting fresh incentives from the European session.However, the retreat in the major remains restricted amid a risk-friendly market environment, which curbs the demand for safe-haven Swiss franc, keeping the sentiment around USD/CHF buoyed.The immediate focus now remains on Swiss National Bank (SNB) governing board member Andrea Maechler’s comments due later in the European session, while a few of the Fed speeches will be also eyed for further USD moves.To the upside, the next resistance is located at 1.0105 (multi-month high) and above which it could extend gains to 1.0142 (daily R2) and 1.0200 (zero figure) next. To the downside, immediate support might be located at 1.0048/34 (daily pivot/ 5-DMA) and below that 1.0000 (parity) and from there to 0.9945 (10-DMA).
Gold at 5-1/2-month low on stronger USD after Yellen
After a brief pause on Tuesday, Gold resumed with its near-term depreciating move and dropped to the lowest level since early June.Spot prices were down for third straight session and traded at a 5-1/2-month low level around $1208 amid broad based greenback strength, which tends to dent demand for dollar-denominated commodities - like gold. The buck continues to soar, with the overall US Dollar Index hitting its highest since April 2003, after comments from the Fed Chair Janet Yellen, during her testimony before the Joint Economic Committee late Thursday, reinforced expectations that the US central bank would raise interest rates at its December meeting and is eventually weighing on non-yielding precious metal.Meanwhile, continuous rise in US equity market, on expectations of aggressive fiscal spending by Trump administration, and the prevalent risk-on mood in Asian equity markets is further driving flows away from traditional safe-haven assets and exerting selling pressure around the yellow metal. The metal has lost nearly 10% from post US presidential election swing highs and is now set to record second consecutive week of steep losses.A follow through selling pressure below June lows support near $1206 level, the metal seems vulnerable to break through $1200 psychological mark and aim towards mid-Feb. low support near $1190 area. Meanwhile on the upside, $1211 level now seems to act as immediate resistance above which a bout of short-covering could lift the metal towards $1218-19 resistance en-route $1227-29 strong resistance zone.
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