Dollar strength causing markets to fluctuate

Frank Walbaum FX Strategies.Asia

Important News for the day:

Tue, 29th, 16:00 CET US JOLTS job openings.

Dollar building up strength

The Dollar starts a potential season with further gains in markets. Since no change in a rate cut is expected by the FED this week the move might be intensified towards the weekend. This, in turn, is also likely to cause stock markets to face some profit taking in the near future. Especially thin trading conditions in the quieter summer months might support such view. Also, the current implementation of new tariffs would harm the economy developments between the Eurozone and the US further. The DAX currently shows some signs of weakening and might start to break lower as well.

Market talk

The strength of the Dollar is showing impact in markets now. The EUR, GBP as well as the AUD are losing steam and currently building up a potential bearish turnaround pattern. The Pound indicates that based on the weekly as well as monthly charts more downside momentum might be seen. The AUD remains interesting. Usually, weakness in the AUDUSD currency pair also signals, that equities might correct as well. This is currently not the case but traders in the stock market should hence be cautious with their long positions. Profit taking might be on the cards at some point soon. On the other hand BTC and ETH still remain positive showing signs of a break higher.

Tendencies in the markets

Equities sideways, USD stronger, Bitcoin positive, ETH positive, oil weaker, Silver lower, Gold weaker, JPY weak.

Author

Frank Walbaum

FX Strategies.Asia

Frank has been working in the TV business for several years. Acquiring his skills in Germany’s biggest broadcasting station, he then chose to work and live in Asia, which was in 2007.

EUR/USD hits two-day highs near 1.1820

EUR/USD picks up pace and reaches two-day tops around 1.1820 at the end of the week. The pair’s move higher comes on the back of renewed weakness in the US Dollar amid growing talk that the Fed could deliver an interest rate cut as early as March. On the docket, the flash US Consumer Sentiment improves to 57.3 in February.

GBP/USD reclaims 1.3600 and above

GBP/USD reverses two straight days of losses, surpassing the key 1.3600 yardstick on Friday. Cable’s rebound comes as the Greenback slips away from two-week highs in response to some profit-taking mood and speculation of Fed rate cuts. In addition, hawkish comments from the BoE’s Pill are also collaborating with the quid’s improvement.

Gold climbs further, focus is back to 45,000

Gold regains upside traction and surpasses the $4,900 mark per troy ounce at the end of the week, shifting its attention to the critical $5,000 region. The move reflects a shift in risk sentiment, driving flows back towards traditional safe haven assets and supporting the yellow metal.

Crypto Today: Bitcoin, Ethereum, XRP rebound amid risk-off, $2.6 billion liquidation wave

Bitcoin edges up above $65,000 at the time of writing on Friday, as dust from the recent macro-triggered sell-off settles. The leading altcoin, Ethereum, hovers above $1,900, but resistance at $2,000 caps the upside. Meanwhile, Ripple has recorded the largest intraday jump among the three assets, up over 10% to $1.35.

Three scenarios for Japanese Yen ahead of snap election

The latest polls point to a dominant win for the ruling bloc at the upcoming Japanese snap election. The larger Sanae Takaichi’s mandate, the more investors fear faster implementation of tax cuts and spending plans.

XRP rally extends as modest ETF inflows support recovery

Ripple is accelerating its recovery, trading above $1.36 at the time of writing on Friday, as investors adjust their positions following a turbulent week in the broader crypto market. The remittance token is up over 21% from its intraday low of $1.12.