Underpinned by a better-than-expected US growth reading and robust US Treasury yields – the 10-year yield chalked up its third consecutive gain, reaching highs of 2.76% – the greenback pared earlier losses and concluded the week marginally in the red by 0.05%, according to the US dollar index.
Technically, the top edge of a monthly supply-turned support area at 95.13-92.75 remains a valuable structure for the currency, which could eventually lead to a move being seen towards monthly resistance parked at 99.62. A closer reading on the weekly timeframe, nevertheless, has resistance plotted at 97.80.
Meanwhile, in other currencies:
- Early week witnessed the British pound soar against its US peer on news of Labour’s shift regarding a second referendum, and following reports UK PM May is to offer a vote on extending Article 50 (as well as offering a vote on a no deal Brexit) if her deal doesn’t pass Parliament on 12 March. Despite ending the week firmly in the green, up 1.15%, the GBP/USD pulled back Thursday and Friday on dollar strength. In addition to this, the technical picture had its spotlight on hefty resistance: weekly supply at 1.3472-1.3204 and a daily Quasimodo resistance at 1.3315. Adding weight to this resistance is also the approach: a daily ABCD bearish formation.
- The Australian dollar kicked off the week on a reasonably strong note, as US President Trump busied himself on Twitter, stating he will be delaying the US increase in China tariffs, and assuming US and China make additional progress, will be planning a Summit with Chinese President Xi at Mar-a-Lago. Buyers lost their flavour Wednesday, nevertheless, as Australia’s seasonally adjusted estimate for total construction work done fell 3.1% to $51,092.3m in the December quarter. This, along with the US dollar index turning higher on the day, eclipsed a large portion of the week’s gains. The Australian dollar ceded further ground to its US counterpart Thursday (despite running to highs of 0.7166 in early trade on upbeat Aussie private capital expenditure q/q) and Friday, concluding the week down by 0.68%.