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Monday, August 24th
Yen is sharply up as USD/JPY opened with a gap in Asia this morning. Stronger demand for safe-haven currencies was observed amid Shanghai Composite plunging on Monday and prospects of further monetary easing in China remaining possible. The pair is trading at 121.11, breaking out of the corridor between 124.60 and 124.06. This week, the market is viewing Japanese Corporate Services Price Index, Household spendings, Retail Sales, CPI and Unemployment rate data.
NZD/USD manages to stay very close to 0.66 level as U.S. dollar index remained flat at 94.51. At the end of last week, there was no growth observed in the US dollar as FOMC minutes did not provide clear indication on the time of Fed rate hikes. With commodity currencies, all the attention is now turned to Chinese turmoil with expectations of further developments. The pair is changing hands at 0.6598 with support and resistance levels at 0.6550 and 0.6630, respectively.
EUR/USD is celebrating considerable gains currently trading at 1.1459. The pair is now likely to test the February highs of 1.1533, which serves as current resistance level. The moves in Euro were mostly driven by stronger demand caused by another crash in the Chinese stocks. The support can be found at 1.1308.
GBP/USD returned to the consolidation corridor in between 1.5466 and 1.5690. The previous week, cable was testing the resistance level of current consolidation on daily basis, as happened today also. So what we see now is a more narrow consolidation forming near the top of a broader price fluctuation range, which is another indicator of coming close to forming a longer bullish trend. This week, investors are viewing the US and British GDP figures.
USD/CAD has reached the anticipated target of 1.3241 and opening long positions seems a more reasonable option now. This week will bring considerable volatility to the market, with possible testing of 1.34 level before Friday. American data will serve as the main price action catalyst, so data will need to be watched closely.
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