Yield Curve Inversion and Recession Risks, Dollar the Worst Performer of the Week
Action Insight Weekly Report 7-23-22
Yield Curve Inversion and Recession Risks, Dollar the Worst Performer of the Week

Dollar ended as the worst performing one last week. Selloff somewhat intensified on Friday after poor PMIs indicated that the US economy was already in contraction. Deep fall in benchmark treasury yields dragged down the greenback while traders were betting on a lower terminal rate in Fed's tightening cycle. Canadian Dollar was the second weakest, followed by Sterling.

Euro received just very brief lift from the larger than pre-committed rate hike by ECB and ended mixed. Even Swiss Franc was stronger, as Eurozone PMIs also raised recession risks. But Yen jumped towards the end of the week, in particular against Dollar, on falling yields. But Aussie managed to secure to first place.

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EUR/CHF Weekly Outlook

EUR/CHF's recovery was capped by 0.9953 minor resistance last week, but stayed above 0.9804 low. Initial bias remains neutral this week and further fall is expected. On the downside, break of 0.9804 will resume larger down trend. Next target is 0.9650 long term projection level. On the upside, however, break of 0.9953 minor resistance will suggest short term bottoming, and bring stronger rebound to 55 day EMA (now at 1.0097).

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EURUSD | USDJPY | GBPUSD | USDCHF | AUDUSD | USDCAD

EURJPY | EURGBP | EURCHF | EURAUD | GBPJPY

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