Euro declines, but dollar isn't in good shape either

KBC Market Research Desk KBC Bank

Earlier this week, USD softness prevailed due to US political uncertainty. The USD still wasn't in great shape, but euro softness became more dominant yesterday. EUR/USD declined in the 1.23 big figure. Of late, interest rate differentials were often ignored, but 2-yr German/US spreads reached a new cycle peak. Finally, this provided some downside protection for the dollar against the euro. EUR/USD closed the session at 1.2305. From a technical point of view, the established ranges remain intact. The picture of USD/JPY remained fragile. Despite a late session rebound, the pair still closed the session at 106.34.

Overnight, BOJ governor Kuroda was reapproved for another term of five year. However, the focus in Japan is currently on the land scandal, questioning the political future of PM Abe and even more of Fin Min Aso. For now, the political noise, both in the US and Japan, is weighing on USD/JPY and on Japanese equities. USD/JPY dropped again below the 106 level. The loss of the dollar against the euro stays very modest (EUR/USD near 1.2315).

The final EMU CPI is expected at a low 1.2% Y/Y today. US housing starts building permits, production, and Michigan consumer confidence will also be published. These reports probably won't change investor expectations for next week's Fed meeting. This week, the euro came under modest pressure as a gradual ECB approach questions the timing of a first rate hike in 2019. At the same time, USD political uncertainty remains a factor, too. The EUR/USD decline might ease. A break below the 1.2273 correction low probably won't be that easy. At the same time, rising interest rate differentials make holding USD shorts quite costly. For now, we assume more consolidation in the 1.2155/1.2450 range going into next week's Fed meeting. Downside pressure in USD/JPY and EUR/JPY might also help to cap the topside in EUR/USD, even in case off broader USD weakness.

Technical considerations continued to dominate sterling trading. Cable was blocked ahead of the 1.40 resistance. EUR/GBP drifted south in line with EUR/USD. There are no UK eco data today. Tensions between Russia and the UK have little impact on sterling. Technically inspired trading for EUR/GBP around current levels might be in the cards.

Download The Full Sunrise Market Commentary Currencies

Author

KBC Market Research Desk

KBC Bank

EUR/USD hovers around nine-day EMA above 1.1800

EUR/USD remains in the positive territory after registering modest gains in the previous session, trading around 1.1820 during the Asian hours on Monday. The 14-day Relative Strength Index momentum indicator at 54 is edging higher, signaling improving momentum. RSI near mid-50s keeps momentum balanced. A sustained push above 60 would firm bullish control.

GBP/USD holds medium-term bullish bias above 1.3600

The GBP/USD pair trades on a softer note around 1.3605 during the early European session on Monday. Growing expectation of the Bank of England’s interest-rate cut weighs on the Pound Sterling against the Greenback.

Gold eyes acceptance above $5,000, kicking off a big week

Gold is consolidating the latest uptick at around the $5,000 mark, with buyers gathering pace for a sustained uptrend as a critical week kicks off. All eyes remain on the delayed Nonfarm Payrolls and Consumer Price Index data from the United States due on Wednesday and Friday, respectively.

Top Crypto Gainers: Aster, Decred, and Kaspa rise as selling pressure wanes

Altcoins such as Aster, Decred, and Kaspa are leading the broader cryptocurrency market recovery over the last 24 hours, as Bitcoin holds above $70,000 on Monday, up from the $60,000 dip on Thursday.

Weekly column: Saturn-Neptune and the end of the Dollar’s 15-year bull cycle

Tariffs are not only inflationary for a nation but also risk undermining the trust and credibility that go hand in hand with the responsibility of being the leading nation in the free world and controlling the world’s reserve currency.

Bitcoin, Ethereum and Ripple consolidate after massive sell-off

Bitcoin, Ethereum, and Ripple prices consolidated on Monday after correcting by nearly 9%, 8%, and 10% in the previous week, respectively. BTC is hovering around $70,000, while ETH and XRP are facing rejection at key levels. Traders should be cautious: despite recent stabilization, upside recovery for these top three cryptocurrencies is capped as the broader trend remains bearish.