September 14, 2020
- Asia equities close with gains, Euro-area equities mixed, US Futures higher
- Japan gets new Prime Minister-Yoshihide Suga
- US dollar softer after mild improvement in risk sentiment
FX Ranges at a Glance
Source: IFXA Ltd/RP
FX Recap and Outlook GBPUSD traders forgot Friday’s fears of a “no-deal Brexit,” allowing the currency pair to lead the G-10 major currencies higher against the US dollar, albeit inside narrow ranges.
AUD underperformed, and CAD was unchanged.
FX and equity market sentiment were mildly positive in part, due to Pfizer Inc CEO Albert Bourla, saying it was “likely” the US deploys a COVID-19 vaccine before year-end. He said he was “quite comfortable” that the vaccine was safe, but didn’t say if he would try it.
EURUSD climbed steadily, rising from 1.1833 to 1.1868. Eurozone Industrial Production rose 4.1% m/m in July, slower than the pace in the previous month. The results are weak when compared to June 2019 data. On the weekend, President Christine Lagarde said the recent appreciation of the euro has partly offset the positive impact from the impact ECB’s stimulus had in boosting inflation. Her colleague Bank of Finland Governor Olli Rehn said: “the inflation outlook is a concern.”
The comments echoed the ECB statement and press conference and were largely ignored.
GBPUSD rose for 1.2782 to 1.2862. Profit-taking and position adjusting had a lot to do with the gains ahead of the parliamentary vote on Prime Minister Boris Johnson’s Internal Market Bill. It is not the final vote, ensuring more GBPUSD drama in the coming days. The intraday GBPUSD technicals are bearish below 1.2895, looking for a break of 1.2820 to extend losses to 1.2750.
USDJPY traded in a narrow range and are now trading at the bottom of that range in NY. News that Yoshihide Suga was named prime minister was expected. USDJPY technicals are bearish below 107.05, targeting 105.10.
AUDUSD and NZDUSD traded in narrow bands and are at the top of their overnight ranges in NY. Both currency pairs are tracking US dollar sentiment.
USDCAD climbed in Asia and retreated in Europe, to open little changed from Friday’s closing level. Prices were supported by soft oil prices , while gains were capped by broad, bearish US dollar sentiment. Traders are looking ahead to CPI data on Wednesday and Retail Sales, Friday
USDCAD Technicals: The intraday technicals are bullish above 1.3150 but while prices are below 1.3250, the July downtrend is dominant. Longer term, the uptrend line from September 2017 is intact above the 1.2950-70 area. For today, USDCAD support is at 1.3150 and 1.3110. Resistance is at 1.3190 and 1.3240. Today’s Range 1.3120-1.3220
Chart: USDCAD 4 hour
Source: Saxo Bank
FX open (6:00 am EDT) High, Low, and previous close
Source: Saxo Bank