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Currency Wars Continues & Possible Sterling Weakness

Updated 09:24AM 09/08/2019

 
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FX Strategy 09 Aug 19

 

SEK and JPY are the top G10 FX gainers today, up 0.19% and 0.13% vs the dollar while GBP and CAD are the top losers, down -0.19% and -0.01% vs the dollar. Currencies war continues with Central banks in Asia, Australia, and New Zealand looking to keep rates low. The developed economies are struggling to improve wage growth and inflation despite nearing Full employment. China, on the other hand, has devalued its yuan to above 7-per-dollar. It seems likely that Beijing will be accused of currency manipulation as trade wars heat up, it seems unlikely that we will have any resolution on this matter any time soon. Elsewhere, British Pound is vulnerable to further fall as there is a high chance that U.K. PM Boris Johnson will face a vote of no-confidence soon after 3rd September when parliament returns from recess. In the Asian equities space, the Nikkei 225 closed up 0.44% at 20,684.82, Hang Seng closed -0.69% at 25939.3 and Kospi ended 0.89% at 1937.75. The European equities were trading weaker with the FTSE down -0.33% at 7261.93, DAX down -0.49% at 11787.75, and CAC down -0.61% at 5354.83. In the rates market, global yields were trading weaker; the US 10-year yield was trading at 1.7086% and the Bund 10-year yield trading at -0.586%. In the energy space, the Brent (front month) is trading up (0.51%) for the day at $57.67.

 

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Daily Pivots for Key Currency Pairs

 
 

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)

 
 

(Content and Data by Tradermade)

 

Major Currency Pairs

 

EURUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.1234 for 1.1110
Short-term view: EUR/USD resistance at 1.1234, MACD and RSI are bearish. Hence, we see a move lower to 1.1110. Above 1.1234 to open 1.1280.

 

GBPUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.2190 for 1.2112
Short-term view: GBP/USD resistance at 1.2190, momentum is still bearish and we see a dip to 1.2112, likely 1.2046. Above 1.2190 to open 1.2243.

 

USDJPY Chart (Two-week)

 
 

Strategy: Resistance at 106.30 for 105.50
Short-term view: USD/JPY has resistance around 106.30, momentum is still bearish hence, we see a move lower to 105.50 and 105.03 Above 106.30 opens 106.65

 

AUDUSD Chart (Two-week)

 
 

Strategy: Resistance at 0.6830 for 0.6725
Short-term view: AUD/USD short-term downtrend continues, we look for resistance at 0.6830 for a move lower towards 0.6725, likely 0.6650. Above 0.6830 we look for 0.6869 in the immediate short-term.