FX overnight analysis

09.08.2017 / 01:19

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The USD rebounded from overnight losses only to see gains erode by day's end, as JPY gained against each of its G-10 peers; the combination of higher UST yields and upbeat JOLTS data gave the buck a boost before Trump threats on North Korea damped risk appetite.

USD/JPY was weighed down by cross selling most of the day, though dollar short covering after option expires and the solid JOLTS data relieved downward pressure. USD/JPY rallied from 110.38 to an intraday high of 110.83 in minutes up to and following expiries, with sellers reemerging midday to limit gains.

By contrast, GBP/JPY was down nearly a yen, with spot testing Ichimoku Cloud support at 143.39l similar price action seen across most crosses amid waning risk appetite after Trump commented on North Korea.

AUD/USD was attracted to large 0.7950 expiries before being run over by dollar bulls; 0.7887 was the low, with spot rebounding to settle above 0.7900. Aussie continues to be under pressure from AUD/JPY selling, with the cross dropping to its lowest level since July 13; cloud support is seen at 86.00. AUD/USD has not closed below 79.00 since July 17; near-term support is seen at the 0.7875 low on July 21.

NZD/USD was a victim of cross-related sales and broader greenback purchases, leaving kiwi to close near the 0.7318 low of the day. AUD/NZD marched for most of day, while NZD/JPY ran into stop-related selling below its 55-DMA of 81.17 and Ichimoku Cloud top of 80.97.

Source: Bloomberg Pro Terminal

Jr Trader Alexander Kumanov

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FX overnight analysis

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