The US dollar index is on the back foot this morning after US core durable goods orders came in below estimates yesterday.
Dollar pairs are enjoying the relief, with the Australian dollar picking up the pace in the counter rally. The AUD/USD is up 0.50%, making good all of yesterday’s losses that saw the Aussie drop as low as 0.7060 at one point. The AUD/USD is trading above 0.7100 so far this morning on strong retail sales and trade balance.
The EUR/USD is recovering well and posting its first positive session in nine as support around 1.1200 holds. The GBP/USD is also performing well, posting its third gain in a row this week as the week’s opening gap is well and truly closed.
The USD/CAD is on the back foot erasing yesterday’s gains as resistance around 1.3350 holds. The USD/CHF broke through 1.0000 briefly yesterday before falling back to around 0.9975 this morning.
Yen pairs are also on the front foot as traders seek out riskier assets. The USD/JPY is setting up for another test of resistance around 111.50.
The GBP/JPY is higher for the fourth day in a row, while the EUR/JPY is out-performing and pushing to challenge resistance around 125.00. The AUD/JPY is posting some of the biggest gains and recovering all but some of yesterday’s losses.
Today, we have UK services PMI at 08.30.
At 12.15, we have ADP non-far employment change.
US ISM non-manufacturing PMI is at 14.00.
Uncertainty still remains surrounding Brexit, but amidst the gloom and confusion, there is the potential for upside. Market friendly options are emerging and there is the potential for GBP/JPY to at least trade inline with other yen pairs over coming weeks.