The US Dollar is weaker today as markets appear to be putting the cue back in the rack ahead of the holidays next week. Will thin trading conditions undermine the DXY (USD) Index?
US Dollar, USD/JPY, EUR/USD, Hang Seng, Crude Oil, Gold – Talking Points
- The US Dollar softened today as markets appear to be winding dowm
- Growth linked assets have made a comeback as volatility has calmed down
- Commodity prices look to be unsettled for a while. Will that lift USD?
The US Dollar is lower through the Asian session after making some gains overnight.
USD/JPY is eyeing off the 4-month low of 130.57 seen on Tuesday after the Bank of Japan modified its yield curve control (YCC) program.
EUR/USD is heading toward 1.0650 but remains ensconced in the 1.0576 – 1.0736 range of the last week. The Australian Dollar is the biggest gainer so far today as a more buoyant mood toward risk assets in general, has helped to underpin it.
Wall Street saw some solid advances in their cash session and futures are pointing toward a good start to their day.
APAC equities joined the party with Hong Kong’s Hang Seng Index (HSI) leading the charge higher, It was up over 3% at one stage before easing off in afternoon trade there.
Treasury yields are steady after lifting earlier in the week in the wake of the BoJ’s change in tack. The benchmark 10-year note is returning 3.66% at the time of writing.
Ukrainian President Volodymyr Zelenskiy visited Washington and gave a rousing speech to Congress. The US has promised further military support for his country. The take-out for markets from his visit is that the war does not look like being over anytime soon.
Some miliary strategists have noted that Russia appears to have switched tactics and are now settling into a long drawn-out battle of attrition. This could continue to unbalance commodity markets indefinitely.
The WTI futures contract is near US$ 79 bbl while the Brent contract is a touch above US$ 82.50 bbl. Gold is trading near its 6-month high, currently at US$ 1,820.
The UK and the US will both get GDP data today.
DXY (USD) INDEX TECHNICAL ANALYSIS
The DXY index is slightly lower today as it once again threatens to break below the 260-day simple moving average (SMA) .
The June low at 103.42 held was tested last week and held. It may provide support if tested again. Further down, support might lie at the May low of 101.30.
On the topside, resistance could be offered at the previous peaks of 105.82, 107.20 and 107.99.
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