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Aug 18 - 04:55 PM

EUR/USD - COMMENT-US Recap: EUR/USD Rides High As Dollar Slide Intensifies

By Paul Spirgel  —  Aug 18 - 03:10 PM

The dollar fell to fresh two-year lows against a basket of currencies, gathering downward momentum amid a lack of tangible progress on further fiscal aid for the coronavirus-stricken U.S. economy, helping sterling in particular entrench itself above 1.32 nL1N2FK1J2.

Up more than 1% on the day by U.S. afternoon trade, sterling led the charge among the majors after finding support by 1.3203 during an earlier pullback.

A break above 1.3185-1.3210 unleashed wave of stop-loss buying, putting the Dec.
31 high of 1.3284 in focus.

EUR/USD rallied to new 27-month high, trading 0.53% higher on the day after putting in a peak of 1.1966 on EBS.

Next resistance comes at 1.1996, the weekly high from May 2018.
Large euro spec long positions may slow its gains from here.
Wednesday’s option calendar has a large expiry at 1.19, which may anchor EUR/USD nearby.

As buoyant as EUR/USD now appears, bears may be setting a trap nL1N2FK1JM.

USD/JPY gained on the broad exit from the dollar, benefiting from haven flows as well as upbeat pan-Asia economic tones in the aftermath of China liquidity moves and softening U.S.-China trade anxiety.
It held support by 105.29, the 61.8% Fib of USD/JPY’s 104.20-107.05 rise nL1N2FK1H1.

AUD/USD ran into a spate of profit-taking after reaching an 18-month high by 0.7265, though the dip from the peak was shallow.
Aussie bulls were emboldened by diminished U.S.-China trade anxieties and broad dollar weakness.

USD/CNH moved near 7-month highs, reversing COVID-19 losses and gaining on the postponement of the U.S.-China trade review.
Yuan gains were infectious, boosting emerging as well as developed-country Asian currencies.

Low rates and the weak dollar lifted equities and precious metals, gold rose 1%, with silver gaining 2.2%.
Oil held steady.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary

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