U.S. Dollar bears celebrated the day yesterday as the greenback sold off across the board trading away from Friday’s highs mainly because of profit taking and of lesser importance the fact that Treasury yields remain low indicating that bond markets are not quite following market sentiment for an interest rate hike from the FED.
EUR/USD traded as high as 1.2674 last night before settling just above 1.2620 in Asia’s trading session. Economic data released yesterday showed a slowing German factory orders which can be mainly attributed to Russian sanctions imposed by the European Union. The pair is now trading exactly where it was trading before the U.S. payroll data released last Friday and while traders are positioned for a further move lower, there is increasing possibility for a consolidation at these levels and maybe a move a bit higher towards 1.2750 before a second attempt to break below 1.25.
USD/JPY is lower this morning following suit yesterday’s selloff down from 109.80 to 108.60. The pair is now trading at 108.50 with the overall sentiment looking bearish. Initial target for the pair would be at last week’s low 108 which marks a 2-week low.
GBP/USD moved higher to pair the movement of all USD major crosses. The GBP/USD as indicated yesterday’s post has priced in all the fundamental reasons for a GBP selloff and it doesn’t seem as a surprise move that the Pound is moving aggressively higher ahead of the BoE monetary meeting later this week. Resistance levels can be found all the way up but the most important ones can be seen at 1.6150 and within the area of 1.6210-1.6230.
Today’s economic calendar if dominated by GBP data starting with U.K.’s Industrial and Manufacturing Production at 08:30 GMT, Bank of England’s Credit conditions at the same time, and following with NIESR U.K.’s GDP September estimate at 14:00 GMT.
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