US Data in Focus
The US dollar is on a firm footing today heading out of the European morning. Looking ahead to the US session, the market is awaiting the US Q2 GDP print. Expectations are for this to have remained unchanged at 2%. Any disappointment here is likely to weigh heavily on the dollar, increasing pressure on the Fed to ease further over the remainder of the year. USD index trades 98.74 last, with price breaking out to fresh highs on the week.
EURUSD Testing Support
EURUSD has been firmly lower again this morning, extending yesterday’s losses as the US dollar surged higher. A jump in US yields has weighed on EUR which has been under pressure all week since a raft of weaker-than-expected PMI sets earlier in the week from the eurozone and Germany. EURUSD trades 1.0933 last with price quickly approaching 1.0914 support.
GBPUSD has been back under pressure today also. UK PM Johnson is threatening to prorogue parliament yet again. This comes following parliament’s first session back yesterday after Johnson’s Supreme Court loss. Therefore, uncertainty reigns chief. GBPUSD has broken back below the 1.2382 level trading 1.2308 last.
Ris Sentiment Recovers
Risk assets have been well supported today following comments from Trump this week who advised the markets that a deal with China could come sooner than people expect. While the comments have offered support, there is still a level of hesitation in the market ahead of the October trade talks. SPX500 trades 2889.13 last having recovered firmly off the week’s 2952.13 lows.
JPY & Gold Rally
Safe havens have had a firmer day today also. Despite higher equities prices and a stronger USD, both JPY and gold are higher against the dollar. XAUUSD trades 1508.08 last with price having broken back down beneath the key 1522.75 level yesterday. USDJPY trades 107.61 last as price softened following the large daily bullish engulfing candle printed yesterday.
Bearish EIA Report Weighs on Oil
Oil prices have remained very subdued today in the wake of yesterday’s weekly EIA report. The group reported a further, unexpected surplus in US crude stores which rose by 2.4 million barrels, against an expected 249k barrel drawdown. With US crude production having also jumped by 100k barrels per day, the report adds weight to the concerns shared recently by both the EIA and OPEC. Crude trades 56.66 last with price sitting just above the bull channel bottom.
CAD Still Capped
USDCAD has been a little higher today, though moves have been muted. Price is sitting roughly in the middle of the 1.3207 – 1.33 range which has framed price action over the last few weeks. Traders will be watching Key US data later today which could provide the catalyst for a directional move.
AUD Holding On
AUDUSD prices have stabilized today following heavy losses yesterday. A better risk backdrop in the wake of supportive trade comments from President Trump has helped alleviate some of the uncertainty around his potential impeachment which had shaken risk appetite earlier in the week. AUDUSD trades .6758 last, sitting right on that key support level for now.