US Muted Amidst Independence Day Holiday
The US dollar has had a very muted session so far today. The week’s stagnation continues with the US offline for the Independence Day holiday. Despite the pause in momentum over the last few days, the USD is still up on the week following a strong rally on Monday. This is in response to news that Trump and Xi agreed to restart trade talks when they met at the G20 summit over the weekend. USD index trades 96.36 last, still well above the 95.72 level support. For now, the market is waiting for the US employment reports tomorrow.
Euro Holds Despite Weak Data
EURUSD has been a little higher over the European morning on Thursday, taking advantage of subdued USD trading. Indeed, EUR has maintained a bid tone despite lower than expected eurozone retail sales for June. The data released today printed 1.3% vs 1.6% expected. EURUSD trades 1.1285 last, still well up off the 1.1217 support.
GBPUSD remains under pressure today, despite the subdued tone to USD. The Pound has been under steady pressure over the last week as Brexit uncertainty, political upheaval in the UK and a worried tone from the BOE, combine to weigh on price. GBPUSD trades 1.2576 last, sitting just above the 1.2559 level support.
Risk Assets Pause Near Highs
Risk assets have retained support this morning. They have remained bid at 2995.93 last, sitting just under recent all-time highs. The prospects renewed efforts to achieve a trade deal between the US and China, as well as fresh easing from the Fed, are keeping equities well supported with risk appetite remaining buoyant.
Gold Holds Near Highs
Safe havens have been mixed again today. USD is down against the Japanese yen but up against gold. USDJPY trades 107.78 last as price continues to stagnate near recent lows. Momentum has dried up for now. However, focus remains on further downside over the near term unless price can break back above 108.78. XAUUSD trades 1415.14 now as price continues to hang on near recent highs. However, we could have a double top in play with the neckline sitting at 1381.22, a break of which should see a much deeper correction in gold.
Crude Higher on Bullish EIA Report
Oil prices have been a little higher today following a further bullish report from the EIA yesterday which showed US crude stockpiles falling for a third consecutive week. However, the fall was less than expected, which has blunted the upside move. Oil remains lower on the week from the sell-off in response to the July OPEC meeting which came despite OPEC announcing a 9-month extension to the current cuts. Crude trades 57.15 last, still sitting above the 55.86 level.
Commodity Currencies Capped
USDCAD is trading weakly today with price just about managing to stay above the 1.3070 level which was reclaimed yesterday following a brief move below. The weakness in crude prices has weighed on CAD, though subdued USD trading has prevented a rally in the pair.
AUDUSD has softened a little today. But, for now, price remains above the .70 level which has been broken again this week. The level has been a key pivot for price and while above here, focus is on further upside. The recent RBA rate cut has not slowed AUD’s advance and the prospect of a US /China trade deal is keeping price well bid.