The G-10 and CNH rundown
USD – trying to mount another comeback this morning after yesterday’s sharp retreat – only likely to succeed on a deeper bout of deleveraging/risk-off across asset classes and/or another sharp move higher in US long yields.
CNH – not a lot of differentiation here relative to other currencies, recently stronger than the euro but near the top of the range versus the Aussie.
EUR – EURUSD struggling for air this morning after yesterday’s sharp comeback – with a more satisfactory consolidation target after the recent run higher down into 1.2065 and maybe even the psychological support at 1.2000.
JPY – the JPY consolidated quickly with the backdown in yields yesterday, and USDJPY importantly stayed within the downward sloping channel – keeping that the regime unless a new rally takes out the pivot high, which could squeeze the pair significantly higher, given how well-defined the channel is.
GBP – sterling is on a roll – is this another head fake or are we set for a further solid surge. Yes, the BoE’s Bailey steering guidance away from negative rates helps, but the strength must also be based on real inbound investment flows as well. Watching the 1.3705 level in GBPUSD and 0.8865 area in EURGBP for whether this triggers more momentum.
CHF – paint is drying here, but there is an interesting resistance line now and arguably an upside down head and shoulders situation in USDCHF around the 0.8920 that bears watching if the USD strength returns
AUD – the Aussie pulled back sharply from the sell-off, but looks a bit extended broadly and have a hard time that this is all we are going to get out of a consolidation attempt. That being said, would need a push back down below 0.7700 and the 0.7666 pivot established Monday to argue for a more profound test of the up-trend.
CAD – the rush higher in oil driving CAD back up against the US dollar. The medium term momentum picture in USDCAD looking a bit tired here – may need to bounce around in the range back to 1.3000 before next steps.
NZD – the Aussie pulling ahead of the NZD and finally getting separation from the 200-day moving average. I like the longer term prospect of the pair higher, starting with a shift into the 1.10-1.1300 region.
SEK – all momentum has been knocked out of SEK in EURSEK, but the SEK bulls only getting into trouble there on a back-up above 10.12-15, although NOKSEK is banging on multi-month highs after a sharp correction on the strong recent surge in oil prices.
NOK – the NOK enjoying a fresh spring higher in oil, with the move below 10.50-40 in EURNOK theoretically opening for a test toward the massive 10.00 level eventually.
Upcoming Economic Calendar Highlights (all times GMT)
- 1330 – US Dec. CPI
- 1430 – US Fed’s Bullard (Non-voter) to speak
- 1430 – US Fed’s Kashkari (Non-voter) to speak
- 1530 – US Weekly Crude Oil and Product Inventories
- 1800 – US Fed’s Brainard (Voter) to Speak
- 1900 – US Fed Beige Book release
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- 0200 – China Dec. Trade Balance and Export/Import figures