The dollar is holding firm tone against most of major counterparts on Tuesday, as markets are gaining pace after Japanese, Canadian and some US markets were closed on Monday for holidays. The dollar index which tracks dollar’s performance against the basket of six major currencies, was up 0.2% in Asia, probing above 97.00 barrier.
The dollar firmed against Japanese yen after correction to 102.79 and added 0.44% for the session on brief probe above round-figure barrier at 104.00.
The Euro is also at the back foot after Monday’s close in red, back below daily cloud and approaching Friday’s fresh two-month low at 1.1103.
Sterling continues to move lower from last Friday’s recovery peak at 1.2475, reached on bounce after flash crash, down nearly 0.5% for the session. British pound remains under pressure on persisting fears about hard Brexit, with bearish technicals, completing negative picture about pound’s near-term future.
Market participants see renewed attack at 1.2000 support as likely near-term scenario, with some analysts already operating with parity level, which could be reached in coming months.
Antipodean currencies are also under pressure on stronger dollar. Australian dollar fell 0.82% in Asia, resuming broader downtrend after two-day consolidation. Aussie dipped to nearly three-week low at 0.7541, level that also marks significant technical support, with bearish technicals supporting further weakness.
Kiwi dollar extended steep descend of past few days, which accelerated on Monday after the pair broke below daily Ichimoku cloud. New Zealand dollar fell to fresh 2 ½ months low at 0.7058 today, on dovish comments from RBNZ official.
US dollar’s strength is linked to changing Fed rate hike expectations that were under 50% three weeks ago and now pushing towards 70%, which is the current expectation of market participants that the Fed will raise rates in December.
Markets are waiting the minutes of Fed’s September meeting to get more clues about central bank’s further actions.
Crude oil was one of top performers on Monday. US Crude oil gained nearly 5% on strongest one-day rally since 28 Sep and peaked at $51.58, ticks ahead of key med-term resistance at %51.65. Oil received strong support from Russia showing readiness to join OPEC in limiting oil output. OPEC aims for agreements to cut around 700,000 barrels per day in its first reduction of the output in eight years.
US oil was slightly lower on Tuesday, but still holding above $51.00 mark.
Brent crude oil posted fresh one-year high at $53.72 on Monday, as positive sentiment, driven by expectations of production cut, continues to drive oil prices higher.
Brent was around 90-pips lower from fresh high on Tuesday, on consolidation of Monday’s strong rally.
Asian shares were mostly lower on Tuesday, correcting Monday’s move higher. MSCI, the broadest index of Asia-Pacific outside Japan, was down 0.9% for the session, Singapore was down 1% and Taiwan down 0.17% for the session.
On the other side, Nikkei 225 was positive on Tuesday gaining 0.71% for the session and hitting fresh high of over one month.
Highlights of the day

Release of German ZEW data is in focus today. Forecast for economic sentiment for October if
forecasted at 4.2, well above September’s release at 0.5%. The indicator that gauges six-month economic outlook, would signal further strengthening of German economy on upbeat release. Data is due at 09:00 GMT.

Important levels

USDJPY

The dollar regained strength and cracked 104.00 barrier on rally from correction low at 102.79. Fresh bulls focus key barriers at 104.30/43, break of which will resume larger rally towards next targets at 105.00 and 105.60. However, further hesitation ahead of key s/t barriers could be anticipated, as Fed’s minutes are expected to give more clues about dollar’s n/t direction.
Initial support lies at 103.55, followed by 103.30 and breakpoint at 102.79.
EURUSD
The Euro is approaching last Friday’s low at 1.1103 on fresh extension of yesterday’s bearish acceleration. The price is back below daily cloud, which proved to be tough resistance. Bearish acceleration below 1.1100 handle will open targets at 1.1045 and 1.1000 (psychological support).
Resistance levels lay at: 1.1122 (former base); 1.1157 (daily cloud base); 1.1176 (daily Tenkan-sen line).
WTI Crude Oil

Crude oil peaked at $51.58 on Monday’s strong rally, coming just ticks away from target at $51.65 (09 June peak). Sentiment remains firm and break higher would extend the wave C, on which the price currently rides, to its 261.8% Fibonacci expansion at $53.60. Initial support lies at $51.00, followed by $50.65 and $50.00 pivot., Market Analysis