EMERGING MARKET CURRENCIES CRASH AGAINST THE US DOLLAR
EM CURRENCY ROUT
Emerging market currencies stole the show in the foreign exchange market this week, with the Turkish lira falling to an all-time trading low against the U.S. Dollar. The USD/TRY pair surged above the $7.00 level for the first time, as diplomatic tensions between the U.S. and Turkey continued to worsen. The selling in the Turkish lira eventually stopped, as the central bank of Turkey provided emergency assistance and raised the nations interest rate. Other emerging markets currencies such as the Indian rupee and the South African rand also fell to historic trading lows against the greenback this week, as investors fretted over high levels of emerging market debt and soaring inflation.
The USDTRY pair is bullish while trading above the $5.55 level, further upside towards the $7.00 and $8.20 levels remains possible.
If the USDTRY pair trades below the $5.55 level, further losses towards the $5.00 and $4.45 support levels remains possible.
U.S. DOLLAR ROARS
The US dollar index climbed to its highest trading level since July 2017 this week, as investors continued to bet on the U.S. economy and rising U.S. interest rates. The US dollar index moved towards the 97.00 mark, marking a thirteen-month trading high for the greenback. The U.S. Dollar made strong gains against the euro, pound and commodity-related currencies, with the single currency falling to a one-year low against the US dollar. Investors looked past President Donald Trump’s warning that the current U.S. administration is concerned about the impact on the American economy from a steadily rising US dollar.
The USDJPY pair is only bearish while trading below the 111.10 level, further downside towards the 110.10 and 109.55 levels seems possible.
If the USDJPY pair moves above the 111.10 level, buyers will likely towards the 111.37 and 112.05 resistance levels.
Cryptocurrencies continued to fall sharply lower this week, as the aftershock of the U.S. Securities and Exchange Commission recent decision to delay its ruling on a Bitcoin ETF rattled digital currency investors. Bitcoin fell to trading levels not seen since late June, hitting $5,800, while Litecoin briefly tumbled below the $50.00 level. Ethereum was one of the worst effected cryptocurrencies by the sell-off, with the ETHUSD pair tumbling below the $250.00 and turning negative on a year-to-date basis for the first time ever.
The BTCUSD pair is bearish while trading below the $6,800 level, further downside towards the $6,050 and $5,700 levels seem possible.
If the BTCUSD pair trades above the $6,800 level, further gains towards the $7,100 and $7,300 resistance levels remains possible.
The British pound fell to its lowest trading level against the US dollar in over fourteen-months this week, with the GBPUSD pair dipping below the 1.2700 level. Sterling fell as Brexit no-deal fears resurfaced, following a warning from British Foreign Secretary Jeremy Hunt, who said that the UK was moving closer to leaving the EU without any deal. The GBP/USD pair also slipped lower as the UK economy released softer than expected wage earnings and inflation data, with the lack of inflationary pressure causing concern amongst investors.
The GBPUSD pair remains bearish while trading below the 1.2800 level, further downside towards 1.2655 and 1.2580 levels seems possible.
If the GBPUSD pair moves above the 1.2800 level, further upside towards the 1.2800 and 1.2955 resistance levels remains possible.