Thursday ended with the EUR/USD being high above of local resistance of 1.10. What's the target now?
US currency is stable vs. euro and yen
In Tuesday’s Asia trade, the US dollar exchange rate is moderately changing in relation to the single currency as well as the Japanese yen.
The common currency was worth about $ 1.2313 versus $ 1.2302 showcased at the close of the previous session.
At the same time the US dollar exchange rate accounted for 105.99 yen compared to yesterday’s reading of 105.89. For the common currency, the outcome was 130.50 yen versus 130.27 yen yesterday.
Yesterday, the yen jumped 0.35% against the greenback and it soared 0.55% against the euro in the face of soaring geopolitical tensions provoked by the escalation of the trade conflict between China and the United States.
Previously, America imposed a series of tariffs on imports to the country of steel and aluminum from China. However, in response to this, the Chinese government rolled out duties on the imports of about 128 categories of US products, including fruit and meat. There’s no doubt such measures will have a strong impact on US exports to the amount of approximately $ 3 billion.
As a consequence of fears of increasing tension, demand for protective assets, including precious metals and the Japanese yen, is increasing, but demand for risky assets goes down, such as shares, for example. As a result, the American stock indices slumped by 1.9-2.7%, mostly due to the collapse of high-tech companies.
The desire to diminish risks following the dive in the equities of technology companies has moved to the foreign exchange market. Market analysts are assured that in the second quarter the Japanese yen could tack on to about 105/$ 1.
Aside from that the Australian dollar inched up 0.3% versus the key American currency, hitting $1.3000 per $ 1.Moroever, on Tuesday, the Central Bank of Australia decided not to alter its key interest rate, leaving it at a record minimum of 1.5%.
The Reserve Bank of Australia will publish its statement and announce the interest rate on July 7, at 7:30 MT time.
The overall market sentiment was mixed after the USA recorded the largest increase in virus cases since May 9. The data even offset the better-than-expected NFP.
The risk-on tone is back on the market again. Let’s look at main trading opportunities.