Asian Session Morning: USD Blow-Off

July 22, 2015

USD Blow Off:
After yesterday asking the question ‘are new highs on the cards for USDX?‘, The US Dollar blew-off its top overnight. The move was mostly triggered simply by profit takers using the lack of major data and event drivers using the quiet session to lock in some profits. The fact that a Grexit gets pushed further onto the back-burners and Chinese government measures have at least stemmed the bleeding in stocks (for now) also helped risk gain a bit more of a foothold.

Treasury yields pushed higher and stocks pushing lower also added to the US Dollar’s pain, with moves across each of the majors bar Cable actually quite violent from a day trading perspective. The Aussie Dollar also ignored dovish RBA minutes to rally sharply come the London Open but with CPI released today, a soft number could very well spark an extra hard fall on speculation of another rate cut before the Fed makes their move.

We move forward today with RBA Governor Stevens speaking at the Anika Foundation Luncheon in Sydney, MPC Official Bank Rate Votes later tonight and finally tomorrow’s RBNZ Rate Decision all providing individual catalysts for some divergence between the Majors to again form.

Tech Earnings Misses Hurt SP500:
The big catalyst for the hurt on the US stock index was the earnings misses across major tech names Apple, Yahoo and Microsoft.

Apple’s numbers showed slumping demand for the current period and missed analysts’ expectations, again raising questions over whether the company should be better investing it’s billions that it has sitting in cash. Individually, Apple shares fell as much as 8.8% but this weighed heavily on the index.

SP500 Daily:
Click on chart to see a larger view.


On the Calendar Wednesday:
AUD RBA Gov Stevens Speaks

GBP MPC Official Bank Rate Votes

USD Existing Home Sales
USD Crude Oil Inventories


Chart of the Day:
With the US Dollar selling off across the board, we take a look at the one major pair that was seemingly unaffected by the Dollar move.

Click on chart to see a larger view.

We’ve been watching the GBP/USD bullish channel that has formed over the past few weeks, looking for any weakness to buy into.

GBP/USD currently sits at an important support level but the fact that every other USD pair bar Cable rallied hard yesterday makes me nervous about this level. I’m still very much a USD bull but Cable seems to be a bit of a special case.

Heading into tonight’s MPC Official Bank Rate Votes, do you see an opportunity in GBP/USD? Let us know by leaving a comment below or mention @VantageFX on Twitter.

Dane Williams – @VantageFX

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