Markets can remain irrational longer than you can remain solvent.
USD
EUR/USD
The Shared currency surged to $1.1332 on U.S softer Treasury yields and the market’s risk-on mood that reduced the greenback’s safe-haven demand.
GBP/USD
The Cable dived to $1.3207 as reports of imminent COVID curbs in Britain failed to dent a conviction the Omicron variant would not derail the global economic recovery.
USD/JPY
The Japanese yen extended losses to 113.62 against the U.S dollar as Japan’s Prime Minister Fumio Kishida battles for the record covid stimulus in the Parliament as Tokyo registered the fourth Omicron case.
AUD/USD
The Aussie dollar crept higher to $0.7172 on strong prints of the Consumer Price Index and Producer Price Index from Australia’s largest customer, China.
USD/CAD
The Loonie whipsawed against the greenback after the Bank of Canada held rates steady, falling from its post-meeting flash high at 1.2607 and currently trading at 1.2667.
USD/ZAR
The South African rand shot up to 15.73 per U.S dollar as signs that the Omicron coronavirus identified locally and in Hong Kong is causing mainly mild infections supported risk appetite.
USD/MUR
The dollar-rupee edged up to 43.45(selling) this morning.
17:30 - USD - Initial Jobless Claims
The dollar Index extends its intense rebound near the 94.00 threshold, clinching a new high for this year 2021 amid an earlier rate hike expectation and announcement of a nearing tapering asset purchase which clearly impacted the yield curves.
A tightening of monetary policy by the European Central Bank remains far in the future but ECB remains vigilant on its inflation figures yet to be released this Friday. This could give additional upward momentum on the USD in the near term and exerts additional selling pressure on the euro and the pound.
On the technical side, after a breach and close above the 100% retracement A-B-C (93.72 level) ,the greenback could easily approach the 113% level at 94.38 followed by 127% level – 94.98 level in the near term. Resistance at 96.47 (161.8%) remains key level to watch
1.3750 marked the completion of ‘wave e’ of the triangular retracement (wave B) of corrective move A-B-C for GBPUSD and abruptly, we saw fresh sellers entering the market below the 1.3600 levels yesterday.
As per Elliott wave principle, GBPUSD is battling around 1.3515 levels and higher inflation, Brexit and Petroleum concerns could exert further pressure on the pound towards 1.32 levels towards completion of wave C.
A breach and close above 1.3750 nullify this downward pattern.
