Market News & Insights
28 July 2017

USD Remains Buoyant

Markets open this morning in a risk off mood. As we are in peak earnings season, markets are taking direction from equities and overnight we saw a sell off in global technology shares with the tech heavy NASDAQ closing down 0.57%. This trend continued into Asian markets with the Nikkei 225 in Japan down 0.60% and European bourses all opening this morning heavily in the red. Markets open this morning in a risk off mood. As we are in peak earnings season, markets are taking direction from equities and overnight we saw a sell off in global technology shares with the tech heavy NASDAQ closing down 0.57%. This trend continued into Asian markets with the Nikkei 225 in Japan down 0.60% and European bourses all opening this morning heavily in the red.

From a currency perspective, the move in equities halted the rebound in the dollar from its recent lows. For example, EURUSD hit two year highs on Wednesday at 1.1772 but was heading to a 1.1660 at the European close yesterday. However, this morning we are back trading above the 1.17 mark. As we highlighted yesterday, EURUSD support will sit around 1.1630 and should hold moves lower, while rallies towards the highs below 1.1780 will be the first retest higher.

In terms of the other major currencies very little to write about in terms of GBPUSD and EURGBP. In a similar fashion to its moves against the single currency, the dollar pound rate at one point yesterday was trading towards the 1.30 pivot level but the rebound was short lived. This morning we open back higher at 1.3074. There’s even less to report for EURGBP which remains within recent tight ranges and so we reiterate our signals that EURGBP is likely to find sellers above .8956. .8905 which provides light support, with .8745/65 area offering real support to the downside.

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