US Dollar wavers but holds its ground

November 26, 2014

The US Dollar wavered on US economic data last night. Better-than-expected GDP growth once helped the Dollar make gains but the data afterwards pared the Dollar and assisted the Euro and Sterling bounce to their day’s highs. Even with downbeat housing prices and consumer confidence, it doesn’t seem that the uptrend will change for the Dollar.
The Euro Dollar took the chance to recover half of its loss last Friday. It has rebounded over 100 pips from its month low and the critical support level of 1.2360, but the bearish trend has far from being changed.

The bearishness of commodities and commodity currencies is not over yet. Even after the Chinese central bank started to implement monetary easing, we are yet to see a shift. The Aussie was the weakest major yesterday against Dollar, suppressed further by RBA official’s speech. It hit a new recent low of 0.8514 along with Iron ore who also renewed its low.

The Canadian Dollar performed stronger recently as the slump of oil prices eased. USDCAD now is moving in a narrow downward channel and may find support from the lower boundary of mid-run bullish channel near 1.1160.

The Yen rebounded from its low as this round of depreciation seems to be over, against the backdrop of the heated domestic discussion on whether QQE and a cheaper Yen will revive Japan’s economy. The RSI and AO indicator show reversal signs in USDJPY daily chart. Bulls can leave this pair for a while and wait for a lower level for entry.

Most Asian stock markets maintain their rise. The Shanghai Composite surged by 1.37% and refreshed 3-year high again to 2567. The ASX 200 also lost 0.5% to 5335 as mining companies dampened. In the European stock markets, the UK FTSE was up 0.02%, the German DAX rose 0.77% and the French CAC Index gained 0.32%. The US market inched lower. The S&P 500 lost 0.11% to 2067. The Dow closed flat at 17815, and the Nasdaq Composite Index rose 0.07% to 4758.

On the data front, the second estimate of UK GDP will be released at 20:30 AEDST. US durable goods orders and unemployment claims will be released at 0:30 AEDST.

Have a great trading day!

Anthony


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