GREENBACK SURGES AS U.S TREASURY BOND YIELDS BREAK HIGHER
U.S DOLLAR AND BONDS
The U.S dollar moved higher across the board this week, as U.S 10-year Treasury-yields finally broke above the key three percent benchmark. The U.S dollar index moved above 91.00 level for the first time this year, as the U.S 10-year Treasury-yield moved to its highest trading level in over four-years, as traders bet on more Federal Reserve rate hikes. The U.S dollar made a considerable move against commodity and emerging market currencies, with the South African rand currency suffering heavy losses against the U.S dollar.
The U.S dollar index remains bullish while trading above the 91.00 level, further upside towards the 91.80 and 92.30 levels remains possible.
If the U.S dollar index starts to trade below the 91.00 level, sellers may test towards the 90.60 and 89.90 support levels.
ECB ON HOLD
The European Central Bank kept interest rates on hold as expected this week, with ECB President Mario Draghi striking a balanced tone during the ECB press conference. President Draghi acknowledged the recent weaker economic data coming out of the eurozone economy, although he noted recent bad weather across Europe had played a part. The euro currency showed only a muted reaction to the ECB meeting, with the EURUSD pair eventually tumbling to a fresh three-month trading-low towards the 1.2100 level.
The EURUSD pair remains bearish while trading below the 1.2154 level, further losses towards 1.2100 and 1.1980 levels appear possible.
If the EURUSD pair trades above the 1.2154 level, further gains towards the 1.2180 and 1.2244 levels remain possible.
CRYPTO BUYING DEMAND
The Cryptocurrency market traded sharply higher again this week, backed by double-digit gains from popular digital currencies such as Ethereum and Rippe. The ETHUSD pair traded above the $700 level at one stage, before turning slightly lower in mid-week trading. Bitcoin also managed to put in a solid performance, with the BTCUSD pair surging towards the $9,700 level, while falling short of the key $10,000 level. The popular alternative coin Ripple made gains of over fifteen percent by mid-week trading, while Litecoin and Dash moved higher alongside the broader cryptocurrency market
The ETHUSD pair is bullish while trading above the $580 level, further upside towards $710 and $880 remains possible.
Should price-action on the ETHUSD start to trade below the $580 level, sellers may push price-action back towards the $550 and $500 support levels.
The Japanese yen currency came under selling pressure this week against the U.S dollar, with the higher yielding U.S bond market attracting investors. The USDJPY pair became a major beneficiary of U.S dollar strength this week, with price-action surging well above the key 109.00 level. The Bank of Japan policy meeting however offered few surprises to traders, with the BOJ keeping rates on hold, while the USDJPY pair showed only a muted reaction to the decision. Better than expected economic data from the United States continued to support the U.S dollar throughout the trading week, with U.S Initial Jobless Claims moving to a forty-eight-year low.
The USDJPY pair is only bullish while trading above the 109.00 level, further upside towards the 110.00 and 110.70 levels seems possible.
If the USDJPY pair trades below the 109.00 level, a correction back towards the 108.50 and 107.90 levels may occur.