The US Dollar surged against major peers yesterday and the USD Index reached the February high of 95.20. Not much material news happened during the session. Europe is in focus as their leaders are trying to solve both the Greek and Ukrainian crisis at the same time, while US President Obama has claimed to hit IS troops.
USDJPY kept its rally by 0.7% to 120.28 along with the gain of US treasury yields. As the breakout has been confirmed, market participants may now turn their former sideways view into a bearish one on JPY. The former highs 120.80 and 121.80 are the next two targets. However, the currency pair may not stop by there but challenge the high set before the global financial crisis at 124.10.
While investors are still waiting for the confirmed results from Europe, Gold fell 1% and hit the resistance of $1220 per ounce, probably due to the strong Dollar largely reducing the attraction of yellow metal. RSI has fallen below 50, showing this round of fall possibly continuing. Gold prices may reach the lower boundary of the recent slow upward channel area near $1190-1200.
The Aussie Dollar finally broke the bottom of a one-week sideway at 0.7730 and fell to the 0.77 mark. A new round of falling has started and former low 0.7626 may not hold the bears’ attack for long. As the China’s import remains weak and investors lose interest in carry trades, AUDUSD will find it impossible to defy gravity. The 0.75 level may be the target after 0.7626 breached.
Back to stock markets, the Shanghai Composite rebounded 0.5% to 3157. The Nikkei Stock Average slid 0.33%. Australian ASX 200 lost 0.54% to 5769. In European markets, the UK FTSE was down 0.16%, the German DAX closed as unchanged and the French CAC Index fell 0.36%. US stocks closed as mixed. The S&P 500 closed at 2069. The Dow fell 0.1% to 17862, and the Nasdaq Composite Index rose 0.28% to 4800.
On the data front, Australian job market data will be out at 11:30 AEDST. BOE Inflation Report will be released 21:00 AEDST. US retail sales and weekly unemployment claims will be at 0:30 AEDST after midnight.
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