Dollar Holds Up, Storm Brewing in Commodity Currencies
| Action Insight Weekly Report 8-12-23 |
| Dollar Holds Up, Storm Brewing in Commodity Currencies |
Dollar emerged notably resilient in a week of highly anticipated inflation data, clinching the top spot among currency performers. With the next FOMC meeting still more than a month away, the greenback's trajectory now rests heavily on the prevailing market risk sentiment. Critical to this equation is the capability of major stock indexes to bounce back after a fortnight of retractions, coupled with the potential continuation of the recent surge in treasury yields. Diverging paths were evident as Yen grappled with its persistent near-term decline, wrapping up the week at the bottom of the performance ladder. Yet, it's the brewing storm in commodity currencies that's capturing significant attention. Directly tying to this is the turbulence in Chinese markets. Escalating investor concerns around real estate crises, looming deflation, and the dive in trade have cast shadows over the financial landscape. This anxiety is palpably evident in the sharp declines witnessed in Chinese stocks and Yuan, with ripples also touching Aussie and Copper markets. In Europe, major currencies presented a mixed bag. While Euro closed slightly weaker when juxtaposed against Sterling and Swiss Franc, they largely danced within their familiar terrains, with traders keeping an eagle eye out for potential breakouts. |
USD/CAD Weekly Outlook USD/CAD's strong break of 1.3386 resistance last week affirms the case that correction from 1.3976 has completed with three waves down to 1.3091. But as a temporary top was formed, initial bias remains neutral for consolidations first. Downside of retreat should be contained by 1.3318 to bring rebound. Break of 1.3501 will resume the rise from 1.3091 to 1.3653 resistance next. Break there will further confirm this case and target 1.3976 high. | |
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