EUR/USD had another choppy session but on the short time frames the market was veering towards the bullish side. EUR/USD remained above the 1.09 level for most of the session – support is forming around 1.0876 and resistance at 1.0937.
The tumbling price of crude oil continues to be felt on commodity currencies. The biggest faller of week has been the Canadian dollar which has seen more than a two percent slide against the US dollar.
US crude supplies registered another big drop this week. The Energy Information Administration reported that supplies fell by 4.2M barrels to 24 June a much bigger drop than the 184,000 barrels that oil analysts had forecast.
The greenback traded on relatively solid ground today despite a mixed set of economic data. The dollar was up against the yen and the euro but slipped versus the UK pound and fell sharply against the Canadian dollar.
Commodities took another beating today after China’s main stock index the Shanghai Composite plunged by 8.5%. The Chinese authorities have staged a massive intervention in recent months to try to stabilize the stock market.
The Bank of Canada surprised markets for a second time this year by cutting their target “overnight” rate of interest to 0.5% from 0.75%. The Canadian dollar fell sharply on the news as did other high yields.