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Merkel speech about today’s good economy just hawkish?

USD index in slightly higher overnight after the swinging move on FOMC minutes. The market finally to be in bias hawkish which adding more surge up with UST yield (10 years yield to higher 2.94% that not seen in past 4 years) and that driven US stock turning lower. And USD will be in choppy going up slightly lead by the falling move on GBP and EUR.

GBP cannot sustain the above 1.4000-10 which driven more long liquidation and the worry for Brexit still adding more pressure for the currency in short term despite the technical oversold.

EUR lowers down after falling in broad USD strength as well as the effect of some EUR cross selling. The German IFO slightly lower than expected but a hawkish speech by Merkel saying economy will be good today and for the next year. Also oversold technical and option defends around 1.2250 which will still support EUR on lower side, topside resistance at 1.2350-60 and then 1.2400-10 but overall expect more basing for EURUSD before the uptrend resumes. USDJPY fails to break 108 that driven more long liquidation and Nikkei lowers down with worry on stock market after the higher UST yield driven more safe heaven selling on the pair. Also YEN cross lowers down which indirectly adding more pressure for the pair. With support at 107 and resistance at 108, the short term depends on broad USD move more likely with balance risk around current range.

Commodity currencies retraces further after the broad USD strengthens with slightly hawkish FOMC minutes and the near term remains to follow USD direction.

Today UK GDP, total business investment, Index of Service, ECB minutes, US initial jobless claims, leading indicators and stock/bond market move will direct the intraday action.

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    Research Risk Warning

    At Hantec Global Ltd we provide an execution only service. Any opinions expressed by analyst Richard Perry should not be construed as investment advice or an investment recommendation. This report does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. Forex and CFDs are leveraged products which can result in losses greater than your initial deposit. Therefore you should only speculate with money that you can afford to lose. Please ensure you fully understand the risks involved, seeking independent advice if necessary prior to entering into such transactions.