Sellers took it easy on the Dollar on Friday following a week which saw the greenback give back much of its recent gains.
Sellers took it easy on the Dollar on Friday following a week which saw the greenback give back much of its recent gains. Stronger appetite for higher yielding assets fueled by better than expected earnings reports and perceptions that the U.S. economy would recover sooner rather than later contributed to the weakness.
Despite the weaker Dollar, the individual Forex markets stayed within their June to July ranges and all merely mounted percentage retracements of these ranges.
Traders pressured the GBP USD late in the week following a retracement to 1.6452. The main trend is down and this week’s rally and subsequent break may be signaling that a secondary top is forming.
The EUR USD closed flat on Friday but up for the week. A new higher bottom has been formed at 1.3832 but the inability to take out the recent swing top at 1.4201 is still providing a reason to think that this pair is topping.
The USD JPY posted a reversal bottom this week on the daily chart at 91.73. Although the trend is down, the follow-through to the upside indicates that the buying may be greater than the selling at current levels. The weekly reversal up is an even stronger sign that higher prices are coming. A trade through 94.46 will confirm the weekly reversal bottom and could trigger a rally to 96.80.
Despite closing lower in limited trading on Friday, the AUS USD finished the weekly session in a position to challenge the high for the year at 82.64. A strong rally in the equity markets next week will most likely encourage more buying in the Australian Dollar.
Like the Aussie Dollar, the Kiwi or New Zealand Dollar is in a position to make a new high for the year. This market is moving almost lock-step with the stock market. A strong surge in equities next week could launch this currency pair through .6590.
The USD CAD plunged sharply lower this week led by higher oil and equity prices. Currently this currency pair is having trouble with a retracement level at 1.1142. A close below this level could fuel a fast break to the low for the year at 1.0783.