America First Clashes With Made In China 2025

The euro initially extended the recovery seen yesterday and made it to $1.1645 before the trade news broke. It was subsequently sold through yesterday's lows, setting up a potential outside day. Last week's low near $1.1545 has been taken out, and the next target is the late-May low near $1.1510. The $1.1450 area marks the 50% retracement of the euro's rally that began in early 2017. The 61.8% retracement is just below $1.12.  

Sterling has been push through the late May low of $1.3200 to trade at new lows for the year. The double top pattern we have been tracking projects into the $1.30-$1.31 area. The 50% retracement of sterling's recovery from the flash crash (Bloomberg records the low at $1.1840) is found near $1.3100. The 61.8% retracement is $1.28. The government lost a vote in the House of Lords yesterday, and this will make for a challenging House of Commons session tomorrow.  

The dollar is being sold through a three-week uptrend against the yen. The trendline is found near JPY109.85. Last week, the greenback was knocking on JPY111.00. Initial support now is pegged near JPY109.50, where a $354 mln option expires today. A break of JPY109.50 signals a likely test on the JPY109.20 low seen on June 8 and June 11. A convincing violation could spur dollar losses toward JPY108.  

 The Canadian dollar is trading at new lows for the year. Early June 2017, the US dollar was trading near CAD1.35 before the Bank of Canada signaled that is was prepared to raise rates. Above CAD1.3265, and the greenback is poised to test CAD1.3350. The Australian dollar is also at new lows for the year. There is support seen near $0.7335-$0.7750, though over the medium-term, we look for a break of $0.7000. Lastly, we note that dollar is moving higher against the Chinese yuan for the third session and near CNY6.48, the greenback is at its best level since mid-January.  

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Read more by Marc on his site Marc to Market.

Disclaimer: Opinions expressed are solely of the author’s, based on current ...

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