Dollar feeling out post-Powell resistance
Head of FX Strategy
Please see today's FX Board PDF (linked here) for the latest Notes of Interest, Trend and Trend Heat readings, as well as a few thoughts on key chart developments below.
EURUSD has teased the key range support near 1.2200 and is trading just below it as of this writing; the next major zone of interest lower is the former high on the way up around 1.2095. This weekend's Italian election looks like the next sentiment test for the euro, which needs to pick up a bid well ahead of 1.2000 to avoid facing a more major challenge to the longer term uptrend.
It wouldn't take much to reassure bears here... a smart reversal of this break attempt, for example, given the chart structure.
EURJPY has broken down below range lows and the 200-day moving average, possibly opening up for considerable progression lower if the move holds. The weekly Ichimoku rises toward the 127.50-plus area over the next couple of weeks and could be a bearish target.
Cable is in a steep retreat in the wake of fresh Brexit uncertainties hitting sterling just as the greenback is also posting notable strength. The plunge through the 1.3855 area local pivot has taken the action lower (note the 200-day moving average in GBPJPY giving way as this was written as a possible accelerant).
The more major challenge to the trend is not until the 1.3600-50 zone, the major resistance level on the way up.
AUDUSD is at pivotal levels with a break of 0.77500-75 the downside blow needed to set a more bearish outlook in motion. Failing that, the range is the range.
Quarterly Outlook Q2 2022
Quarterly Outlook Q2 2022: The End Game has arrived
- Shocks from covid and the war in Ukraine have forced the global financial and political world to change, but what will the end game be?
Productivity and innovation have never been more importantAs the world economy hits physical limits and central banks tighten their belts, could equities be facing a 10-15% downside?
The great EUR recovery and the difficulty of trading itIf the terrible fog of war hopefully lifts soon, the conditions are promising for the euro to reprice significantly higher.
Tight commodity markets – turbocharged by war and sanctionsWith supply already tight, commodities keep powering on. But will it last for yet another quarter?
Between a rock and a hard placeGeopolitical concerns will add upward price pressures and fears of slower growth, while volatility will remain elevated.
The Great ErosionInflation is everywhere and central banks try to combat it. But will they get it under control in time?
Australian investing: Six considerations amid triple Rs: rising rates, record inflation and likely recessionWhile global financial markets are struggling in an uncertain world, the commodity-heavy Australian ASX index is poised to keep a positive momentum.
Cybersecurity – the rush to catch up with realityWith the invasion of Ukraine, governments and private companies are rushing to reinforce their cyber defenses.