The dollar eased against majors on Monday after hitting fresh high last week, which ended in green, on persisting hopes of US rate hike. Fed’s President Rosengren said on Sunday that he would be comfortable with a November rate hike, although most in the market think that such scenario is unlikely just before presidential election due on November 8.
US Retail Sales data, released on Friday, rose in line with expectations by 0.6% in September, while US Producer Price Index rose above expectations that gave an additional boost to the dollar.
The US dollar index which measures performance of the dollar against the basket of six major world currencies, posted new high at 98.14, last traded in March.
The Euro maintains firm bearish tone against the greenback, as past week ended in long red candle and eventually closed below psychological 1.1000 level. The single currency came ticks ahead of key support at 1.0950 on Monday, with corrective upticks seen preceding final attack at 1.0950 target and broken 1.1000 support now offering solid resistance.
British pound hit low at 1.2146, after opening with gap-lower on Monday, maintaining negative sentiment, reinforced by the second strong weekly bearish close. Sterling remains under strong pressure as worries that Britain will lose its preferential trading terms with the EU increase.
Pound’s Fall after Brexit vote to leave the EU has acted as a shock absorber for the economy, according to comments from BOE’s Deputy Governor Broadbent on Monday.
The dollar showed no significant changes against Japanese yen on Monday, but maintains levels above 104.00 handle, showing scope for fresh attempts above last week’s fresh high at 104.62.
The Bank of Japan maintained its optimistic economic view on most of the country’s nine regions in a quarterly report out on Monday, signalling its confidence a tightening job market will gradually push up wages and underpin a steady economic recovery.
BOJ Governor Haruhiko Kuroda maintained his upbeat view of the economy and reiterated the central bank’s resolve to maintain ultra-loose monetary policy for as long as needed to hit its ambitious 2% inflation target.
Gold maintains negative tone on firm dollar but price action holds within near-term congestion between $1250 and $1262, after downticks below $1250 on Friday, proved to be short-lived.
Oil prices were weaker on Monday, continuing negative sentiment from last Friday, on downbeat supply signals from top oil producers and more drilling activity in the US.
However, oil maintains strong bullish sentiment in the short-term, as traders are awaiting more details about planned production cut, agreed by OPEC countries.
Nymex oil traded around $50 level in Asia, while Brent Crude Oil was holding within narrow range below $52.00 mark in early Monday.
Asian shares were lower on Monday, after US Stocks surrendered earlier gains and closed flat on Friday.
MSCI Index was down 0.5%, while Hong Kong’s Hang Seng Index dipped 0.95% after opening with gap-lower on Monday and Japan’s Nikkei 225 was down 0.7% on Monday.
European shares maintained negative sentiment from Asia and were lower in early Monday’s trading. UK’s FTSE 100 Index is down 0.62%, German DX is down 0.26%, while French CAC-40 Index is down 0.29%.
Highlights of the day

Europe
Inflation data from the Eurozone is the sole release from the European session on Monday. Forecast for September is at 0.4%, unchanged from August, and Core PPI numbers are also expected to stay unchanged at 0.8% in September

America
No releases of economic indicators on Monday, but a number of important speakers are scheduled later
in the day. BOE’s MPC member Broadbent is due at 14:45 GMT, followed by FOMC member Fischer
at 16:15 GMT. ECB’s President Draghi and German Bundesbank’s President Weidmann are due at
17:35 GMT.
Important levels
EURUSD
The Euro dipped ticks ahead of key 1.0950 support on Monday, following Friday’s strong bearish close which was below psychological 1.1000 support. Hesitation ahead of 1.0950 target could be expected, with consolidation expected to hold below broken 1.1000 handle.
Triple upside rejection at 1.1060 zone marks the upper break point for stronger recovery.
AUDUSD
Aussie dollar eases from Friday’s spike high at 0.7645 and remains within thinning daily cloud, following unsuccessful attempts above the cloud.
Strong support at 0.7574 has been tested and break lower to open 0.7554 pivot, loss of which would attract 0.7535 and key n/t support at 0.7504. Initial resistance lies at 0.7620, followed by 0.7645 and 0.7660.
USDJPY

The pair is holding at the upper zone of near-term congestion between 103.30 and 104.62, following
third consecutive bullish weekly close. Near-term action holds above 104.00 handle and bullish
technicals favor attempts at 104.62 high, to open extension towards 105.00/60.
Immediate support lies at 103.92, followed by 103.63 and 103.30., Market Analysis