XE Market Analysis: Asia - Jun 23, 2020

The Dollar fell further in N.Y. on Tuesday, taking the DXY to near two-week lows of 96.39 from 96.93, before edging back up to 96.67. Another risk-on session saw broad USD selling emerge at the open, as unwinding of safe-haven flows emerged. Wall Street rallied, while Treasury yields were slightly lower. EUR-USD headed to 1.1349 from near 1.1285, as USD-JPY dropped to 106.08 from over 107.00. USD-CAD fell to 1.3485 from near 1.3535, later advancing to 1.3545. Cable topped at 1.2523, up from early lows of 1.2433.

[EUR, USD]
EUR-USD posted six-session highs of 1.1349 in morning trade, up from 1.1284 into the open. General risk-on related USD selling took the pairing to its highs, though stronger than expected European PMI data kept a floor under the Euro through the session. EUR-USD later eased back to 1.1307 into the London close as profit taking set in. The next resistance level is at the June 16 top at 1.1353, with support down at the 20-day moving average of 1.1233.

[USD, JPY]
USD-JPY fell to better than one-month lows of 106.08, down from n near 107.05 at the open. The Dollar came under broad pressure the the N.Y. open, as risk-on conditions again prevailed on Tuesday. Overnight, the pairing hit a one-week high of 107.22 following Trump's adviser Navarro saying the U.S./China trade deal was "over". This saw equity markets slide, and the USD move higher until the comments were walked back. Trump later tweeted "The China Trade Deal is fully intact..." which took futures higher into the U.S. open. USD-JPY support now comes at the May 7 low of 105.99.

[GBP, USD]
Cable headed higher through the U.S. session, opening near 1.2435, later topping at 1.2532 as a broadly weaker Dollar drove the pairing higher. Concerns over pandemic recovery, along with trade negotiations with the EU, and uncertainty over Brexit in general, will likely keep a cap on GBP-USD. The 50-day moving average at 1.2422 is the next support level, with resistance at the June 18 high of 1.2568.

[USD, CHF]
EUR-CHF edged over 1.07 on Tuesday, after hitting a June low of 1.0637 on Friday. The cross had fallen back over the last week, though has continued to trade comfortably above the series of lows near 1.0500 that were seen from March through to mid May. Committed SNB intervention prevented the 1.0500 level from being breached over this period, when the consequences of the pandemic increasing bets about a possible breakup of the euro area, and even the EU. The SNB policy meeting was on Thursday, which stuck with negative rates for the foreseeable future and strengthened its commitment to intensify FX intervention if necessary to keep the CHF under control.

[USD, CAD]
USD-CAD dipped to near two-week lows of 1.3485 in early North American trade, down from overnight highs of 1.3571. The move lower came as WTI crude touched three-month highs of $41.62 following better than expected European PMIs. CAD direction will continue to be driven by oil prices and risk taking levels, and indeed, as oil prices later fell toward the $40 mark, USD-CAD rallied to 1.3545. The USD-CAD 200-day moving average at 1.3480 is the next major support level, and a breach of the level may see the June 11 low of 1.3396 in the cross hairs. The 20-day moving average at 1.3557 now marks resistance.