The pair reached and receded from new 22-month highs beyond the 1.16 yardstick in past hours. The pair is navigating the overbought territory for yet another session and this coupled with some logical profit taking could trigger a corrective downside. Against this, initial and interim contention emerges at the 1.1448/22 band, where converge a Fibo level and June’s top. Looking at the broader picture, as long as the 200-day SMA, today at 1.1070, holds the downside, further gains in EUR/USD remains well on the table.
US dollar remained depressed in the wake of speculations that the US economic recovery could be grinding to a halt amid the resurgence of coronavirus cases. This coupled with a fresh leg down in the US Treasury bond yields further undermined the greenback demand.
The GBP/USD pair held steady near the top end of its daily trading range, around the 1.2760-70 region, or multi-week tops set earlier this Friday. A combination of factors assisted the pair to build on this week’s positive move and gain some follow-through traction for the sixth consecutive session on Friday. The British pound found some support following the release of upbeat UK monthly Retail Sales figures and flash PMI prints.
USD/JPY has broken below the lower bound of the multi-session consolidative range around 106.60, intensifying the downside amidst the sharp and unremitting pullback in the dollar. Markets appear to have shifted to the risk-off mode in the wake of the opening bell in Wall St., with the main stock benchmarks trading in the red and the rest of the safe haven universe advancing modestly. In the US calendar, Markit’s flash Manufacturing PMI came in at 51.3 and Services PMI at 49.6 for the current month, both prints below estimates. Later in the NA session will come June’s New Home Sales.
WTI (futures on Nymex) has picked up fresh bids in the European session and looks to retest the four-month highs of $42.51, underpinned by the risk-on market profile. The appetite for risk assets returned in Europe, as the upbeat earnings combined with the coronavirus vaccine hopes offset concerns over the US-China escalation. Therefore, the buying interest around the higher-yielding oil remerged. Tuesday’s top near $42.52 joins $42.00 to limit the quote’s nearby advances ahead of the said bearish pattern’s resistance-line, at $42.60 now. In a case where the oil prices remain strong beyond $42.60, February month low near $44.00 could regain market attention.
The USD/CHF pair added to this week’s heavy losses and continued losing ground on the last trading day of the week. The downward momentum dragged the pair to its lowest level since March 9, around the 0.9230 region. The pair already seems to have confirmed a fresh bearish break through a three-month-old downward sloping channel and hence, seems vulnerable to slide further. However, extremely oversold conditions on short-term charts warrant some caution before positioning for any further near-term depreciating move.