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U.S. unveiled new tariffs on China overnight, which caused a sell off in risk assets. China seems reluctant to take concrete counter-measures as they apparently don't want to make things worse. USD/JPY fell about 50 pips overnight but has already recovered and is approaching yesterday's high near 111.30. A break above would see some buy stops triggered and put 112 - 112.5 area into view.
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AUD up on USD weakness and better risk mood
U.S. dollar continues to be sold for the second day after U.S. labour market report on Friday, the main beneficiary today being the Australian dollar. China does not want to escalate trade wars just yet and that's another supportive factor. AUD/USD is nearing 0.75 level (also 50 DMA) where some resistance is likely.
USD/JPY quietly preparing for the next leg
USD/JPY has been trading in a relatively quiet (~90 pips) range this week - a new trend leg in the making. Main event risks are FOMC Minutes later today, U.S./China tariff exchange tomorrow morning and then U.S. labour market report in the afternoon. 100 - 100.25 (includes 200 DMA) is the support and 111 - 111.25 the resistance.
NZD/USD bounces from two-year lows
NZD/USD fell to the lowest level in two years on Monday but bounced just as quickly. Market is already very short and it will likely take further escalation in trade wars and/or more dovish hints by the RBNZ to encourage new bears to enter. 0.665 is the next target on the downside while 0.68 - 0.685 area should provide resistance.
AUD/USD bought after not-so-dovish RBA
It's been almost two years since RBA last adjusted its cash rate. The rate remains at 1.50% after today's meeting and probably will for some time to come. Their outlook hasn't changed much. They're still expecting wages and inflation to pick up. Main risks being international trade wars, (lack of) domestic household consumption and debt levels. AUD/USD is up about 50 pips since the release, after not-so-dovish message by the bank.
USD/JPY recovers as trade worries subside
Recent development on the trade war front did not lead to a more serious risk-off episode. Apart from the Chinese stock market, which was hit quite hard yesterday, risk assets recovered at least part of the lost ground. USD/JPY bottomed near 109.5 and is now back above 110. 200 DMA is the immediate resistance on the way to 110.5 and 111.
Risk off as trade wars continue
Trump is said to have ordered 200B worth of tariffs on Chinese goods. That's an escalation from previous 50B - 100B clips. Risk markets understandably don't like it, and have sold off. Yen is the preferred currency so far today. USD/JPY fell below 200 DMA and 110, to as low as 109.70. We'll see if we get any follow-through as European markets open.
USD/CAD at the highest levels this year
A slower start to the week - major currencies gapped lower at the open but then mostly recovered. Canadian dollar retraced 50 pips of the last week's 260-pip rally. Technicals, trade concerns and falling oil prices should keep USD/CAD supported ahead of OPEC meetings and CPI / Retail Sales combo at the end of the week.
GBP/USD higher on weak dollar and strong services
U.S. dollar is being sold again after DXY touched 95 last week. Trump's trade wars not helping the buck either. U.K. Services PMI came in better than expected yesterday and that helped to send GBP/USD above 1.34. 1.35 is the next target, while 1.33 - 1.335 support area holds.
Canadian dollar rallies on BOC, reverses on tariffs
Bank of Canada caught many off guard on Wednesday. The bank kept overnight rate unchanged at 1.25% but released a hawkish statement, that now puts July hike firmly on the table. However, trade wars continue with steel and aluminium tariffs, which is a headwind for Canadian dollar. USD/CAD 1.30 is the bull/bear line in sand.