EURUSD at Nine Day Low and Key Support

EURUSD, Daily                 

The dollar traded generally firmer, particularly against sterling following the UK election. The pound was clobbered by the election result, which unexpectedly produced hung parliament outcome, heralding a period of political uncertainty and throwing up uncertainties about the Brexit process. Cable dove by over 2% on route to a seven-week low at 1.2635, subsequently recouping to the mid 1.27s but remaining 1.7% down from levels prevailing ahead of the first exit poll yesterday, and down by 0.7% on the day. Elsewhere, EURUSD logged a nine-day low at 1.1169, extending yesterday’s post-ECB low by eight pips. USDJPY gained for a third straight session in making a four-day high at 110.47, putting in some distance from the six-week low that was seen on Wednesday at 109.11. The gains in USDJPY reflect an unwind of short positions built up into Thursday’s cluster of risk events, which, aside from the UK election, went tolerably well from the perspective of investors, with the ECB making nothing more than a baby step toward taking monetary stimulus away, while the Comey testimony didn’t unearth any nasty surprises.

EURUSD is looking to break below the key 20 day moving average for the first time in eight weeks, one to watch into the US open and the close of the week.

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Stuart Cowell

Senior Market Analyst


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