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5 Oct 2013
Session Recap: USD bounces amid no fast but furious DC talks
FXstreet.com (San Francissco) - The US Dollar traded on recovery mode the last day of the week as investors continue watching the war in Washington and taking profits before a possible crucial weekend. On Friday, USD was fueled by comments from the House Speaker Boehner that said he would not allow the US to go into default. The EUR/USD declined the first time in six days.
Fear, default, shut down, uncertainty, debt ceiling, collapse… how many times have you heard those words this week? Well, you are not the only one listening, as Friday came to an end with European majors shedding a good tranche of their weekly gains against the greenback amid profit taking.
Dollar did not had it easy, with data missing or disappointing as the government remained closed for fourth consecutive day, and despite some early rumors a solution to the conflict seems nowhere near. In Europe, things are not much brighter: in Italy, a senate committee has voted to recommend expelling former PM Silvio Berlusconi from the upper house following his conviction for tax fraud.
Investors are reluctant to hold positions in current risk aversion environment, and rather book them out, leaving the EUR/USD barely 50 pips above Monday opening. The EUR/USD closed the week at 1.3550, performing its third positive week of the last four. According to the Forex Forecast Poll, the EUR/USD is expected to advance next week, but the longer view has turned overwhelmingly bearish.
However, "With a daily close below 1.3570, risk to the downside increases for the upcoming sessions, towards 1.3460, base of its latest range and key midterm support as a break below should signal an interim top in pace and further easing," comments FXstreet.com Chief Analyst Valeria Bednarik. She affirmed in a recent report that there is a scope for a correction towards 1.3460: "The daily chart shows indicators turning south from overbought territory, supporting a bearish extension into Monday, although a strongly bullish 20 SMA around mentioned 1.3460 should help halt the fall."
The GBP/USD confirmed the double top commented yesterday and after breaking 1.6160, the cable declined hard to test the 1.6000 area today. The Sterling to Dollar exchange rate closed the 1-week lows at 1.6005. It was the first negative weekly candle since August for the Cable. The USD/JPY bounced from 96.95 in the American session to close its first positive day in the last four at 97.45.
But overall, risk sentiment dominated the boards; with US stocks falling after President Obama stated early week that "It is important for [Wall Street] to recognize that this is going to have a profound impact on our economy and their bottom lines, their employees and their shareholders". Nevertheless, neither Obama nor the Republicans are willing to give ground and sit to negotiate an agreement. By the moment, it is only no retreat, no surrender...
Main Headlines in the American session
12:30 GMT - No US NFP, US employment report
Portugal's PM assures second bailout unnecessary
Bye bye Silvio: Italian Senate committee votes to expel Berlusconi after tax fraud conviction
US Boehner says won’t rely in democratic votes to pass debt limit
Boehner says he doesn’t intend to bring ‘clean’ budget bill to the House floor
Wall Street closed Friday with gains; Dow reconquered the 15,000 level
Fear, default, shut down, uncertainty, debt ceiling, collapse… how many times have you heard those words this week? Well, you are not the only one listening, as Friday came to an end with European majors shedding a good tranche of their weekly gains against the greenback amid profit taking.
Dollar did not had it easy, with data missing or disappointing as the government remained closed for fourth consecutive day, and despite some early rumors a solution to the conflict seems nowhere near. In Europe, things are not much brighter: in Italy, a senate committee has voted to recommend expelling former PM Silvio Berlusconi from the upper house following his conviction for tax fraud.
Investors are reluctant to hold positions in current risk aversion environment, and rather book them out, leaving the EUR/USD barely 50 pips above Monday opening. The EUR/USD closed the week at 1.3550, performing its third positive week of the last four. According to the Forex Forecast Poll, the EUR/USD is expected to advance next week, but the longer view has turned overwhelmingly bearish.
However, "With a daily close below 1.3570, risk to the downside increases for the upcoming sessions, towards 1.3460, base of its latest range and key midterm support as a break below should signal an interim top in pace and further easing," comments FXstreet.com Chief Analyst Valeria Bednarik. She affirmed in a recent report that there is a scope for a correction towards 1.3460: "The daily chart shows indicators turning south from overbought territory, supporting a bearish extension into Monday, although a strongly bullish 20 SMA around mentioned 1.3460 should help halt the fall."
The GBP/USD confirmed the double top commented yesterday and after breaking 1.6160, the cable declined hard to test the 1.6000 area today. The Sterling to Dollar exchange rate closed the 1-week lows at 1.6005. It was the first negative weekly candle since August for the Cable. The USD/JPY bounced from 96.95 in the American session to close its first positive day in the last four at 97.45.
But overall, risk sentiment dominated the boards; with US stocks falling after President Obama stated early week that "It is important for [Wall Street] to recognize that this is going to have a profound impact on our economy and their bottom lines, their employees and their shareholders". Nevertheless, neither Obama nor the Republicans are willing to give ground and sit to negotiate an agreement. By the moment, it is only no retreat, no surrender...
Main Headlines in the American session
12:30 GMT - No US NFP, US employment report
Portugal's PM assures second bailout unnecessary
Bye bye Silvio: Italian Senate committee votes to expel Berlusconi after tax fraud conviction
US Boehner says won’t rely in democratic votes to pass debt limit
Boehner says he doesn’t intend to bring ‘clean’ budget bill to the House floor
Wall Street closed Friday with gains; Dow reconquered the 15,000 level