FOREX: AUD and NZD Weakest in G10 as Bullish USD Index Signal Developing
Jun-19 16:16
- The USD index is furtively firmer on Thursday, edging to new weekly highs as renewed geopolitical risks permeate on the building expectation that US officials are preparing for a possible strike on Iran "in the coming days" - a move that could prompt retaliation against US assets in the region.
- What's notable about this greenback recovery is that it's triggered a bullish signal for the DXY via a break and possible close above the downtrendline drawn off the early February high. This trendline has helped define the dollar weakness across Trump's administration, and this week's move raises the risk of a correction higher in the near-term.
- Today’s dollar strength is most notable against antipodean fx which have declined close to 1% on the session, reflective of weaker equity benchmarks and NZDUSD in particular was helped by a break below a cluster of daily lows around the 0.6000 mark. 50-day EMA support is seen just below 0.5950, before the May lows at 0.5847.
- AUDUSD trades near session lows as we approach the APAC crossover, narrowing the gap with the next key support at 50-day EMA - the first real test of any correction lower. Most recent weakness emphasises the significance of 0.6550 resistance (Nov 25 high) which has capped the topside across June. A break of the 50-day at 0.6432 is required to highlight a potential short-term reversal and target 0.6357, the May 12 low.
- Elsewhere, USDJPY gained further traction to the topside on a breach of last week’s high of 145.46, reaching a session high of 145.77. The renewed dollar strength amid the geopolitical concerns and the hawkish tilt to the June FOMC meeting have provided tailwinds for the pair, signalling scope for a stronger bounce to key short-term resistance at 146.28, the May 29 high.
- The data calendar includes both UK and Canadian retail sales on Friday. BOJ Governor Ueda is also due to speak at the Annual Meeting of the National Association of Shinkin Banks.
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US: Johnson Eyes Wednesday Vote On Megabill, SALT Caucus Says It Will Vote 'No'
May-20 16:11
House Speaker Mike Johnson (R-LA) is pushing for a final vote on the Republican 'Big Beautiful Bill' on Wednesday night, according to reporting from NBC.
- “We got same day authority through Rules. So if we can finish this up, that'd be optimal,” Johnson said referring to the procedural vote in the House Rules Committee scheduled for 01:00 ET 06:00 BST tomorrow morning. Earlier, Johnson said at a press conference on Capitol Hill: "We are going to get this done," but declined to take questions from reporters.
- Johnson's bullish comments come after President Donald Trump spoke to the House Republican conference to apply pressure on conservatives and blue-state 'SALT' Republicans to swallow their objections to the bill. While reports from Capitol Hill suggest that conservatives aren't yet won over, Trump's interventions have proven decisive during his second term.
- Punchbowl reports that, "Several blue-state Republicans holding out support for the reconciliation bill over SALT texted Speaker Johnson to say they're a NO after Trump meeting..."
- Senate Minority Leader Chuck Schumer (D-NY) sought to drive a wedge between Trump and blue-state Republicans on SALT. Schumer said: "When Trump came to Long Island and talked a big game about restoring SALT relief, I called it a farce, it was actually a lie, and today, he has proved himself a liar and has seemingly played New York Republicans for fools," NBC's Frank Thorp reports.
- Schumer continued: "If New York Republicans don't stand up to Donald Trump right now, they will look like fools."
FED: US TSY TO SELL $60.000 BLN 17W BILL MAY 21, SETTLE MAY 27
May-20 16:05
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