The buck recovered a big portion of overnight losses in NY trading as risk aversion once again gripped the marketplace. Our proprietary risk aversion index ticked up to 1.95 from 1.83 and to the highest level now in five trading days. The S&P sank another -1.3% on top of yesterday's poor showing and now has the 200-day SMA within striking distance at 907.91 here. Below there would open up potential to the May lows and Ichimoku cloud top near 880 next. The VIX crept back up to 30.8 and the highest read since 4 June, highlighting the jitters in equity space. US bonds were better bid and the 10-year Treasury yield sank seven basis points towards 3.65% after sneaking above the 4% handle last week. Gold recovered and ended the day nearly $7 higher by 935/934. The precious metal should find good support into 925 where the 50-day SMA, 100-day SMA and daily up-trendline lurk – below opens up to 900/880 next.

Dollar strength was pretty well across the board. EUR/USD dropped about -70 pips in the session towards 1.3840 as the close approached. The 1.3810/00 looks likely to be contested and a snap below should see more aggressive selling pressure emerge. USD/JPY sank -60 points into the 96.40/50 area and flirted with the 100- and 200-day SMAs which sit at 96.48 and 96.46, respectively. The daily close below should now open up potential for more weakness overnight. EUR/USD was absolutely annihilated -150 pips into the 133.40/50 range. The currencies of the resource-based economies were also under pressure as commodity prices corrected lower. USD/CAD popped more than 100 pips into 1.1340/50 while AUD/USD shed -90 pips into the 0.7940 area as a result.

Upcoming Economic Data Releases (Asia Session) prior expected

  • 6/17 1:00 GMT AU  Westpac Leading Index (MoM)  APR  0.30%  - -
  • 6/17 1:30 GMT AU  Dwelling Starts  1Q  -9.90%  - -
  • 6/17 5:00 GMT JN  BOJ Monthly Report