EU / UK open FX analysis – AUD, JPY, USD, EUR

EU and UK indices are looking to open slightly stronger despite a weak lead from the Asian session. Aussie and Asian indices finish in the red after US-China tech-related frictions and disappointing Japanese GDP revisions weighed on risk sentiment.

Asian session wrap – FX Markets

The USD was softer with DXY retreating from extreme RSI overbought levels to push below the key 105.00 level. Dovish commentary from the Fed’s Logan ahead of the Fed blackout window and strength in the Dollars major counterparts outweighing the sour risk sentiment which would normally see the Dollar benefit from haven flows.

EUR bounced back after a sell-off on Yesterday’s dismal German data. EURUSD pushing back above the 1.0700 level after finding support at the June lows.

USDJPY was choppy with early drop due to the risk-off mood and MoF jawboning saw the pair test the S/R level at 146.63 before bouncing back as the Asian session progressed. Japanese Finance Minister Suzuki stating in comments that rapid FX moves are undesirable and warned the Japanese MoF won’t rule out any options (intervention?)

AUDUSD rallied to test the key 0.6400 S/R level, despite the risk-off tone and recent commodity pressure. A weaker USD and some technical support from the daily trendline seeming to be the key drivers.

Looking ahead, the main risk events data wise will be Canadian jobs figures later today and Chinese CPI released on Saturday.