The June dollar opened Thursday morning at 96.94 and continued its move up after Wednesday’s larger reversal higher. The USD is trading near the middle of its June range, and is a hair away from its weekly high despite higher than expected jobless claims this morning. It appears the dollar is benefitting from safe-haven buying this week, but more likely the bounce is a result of being technically oversold, as last week’s decline was the largest the greenback has seen since June 2018. Going forward, I believe the dollar will see another leg up before moving lower in the back half of this year, as the Fed positions itself for rate cuts, weakening the dollar and bringing safe-haven buying to foreign currencies around the world.
The euro is lower Thursday morning, as it tends to trade opposite the dollar. From a technical standpoint, the bear camp is gaining momentum. Fundamentals support the same, as industrial production numbers overnight showed further signs of slowing. The yen has benefited in recent weeks as the safe-haven currency choice for investors. Technically speaking, the yen is forming a bull flag on its chart, which could provide the right set-up for a breakout if market anxiety is sparked in coming weeks. The British pound has finally found support after its avalanche over the last two weeks. If there are any signs that Brits are closer to finding a new prime minister and avoiding a no-deal Brexit, the pound could rally. Until that happens, the bias is favoring the downside.
Japanese Yen Jun ’19 Daily Chart