Dollar keeps up the pace, yen not far behind
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 continues to look heavy within the range after the recent attempt at the top was rejected. The downside pivot is just above 1.2200 and break could open up for the pivotal 1.2100-1.2000 zone which starts to have larger-scale implications for the entire bullish sequence that started early last year.
We continue to watch JPY crosses in general on any return of a downdraft in risk appetite, but also on technical developments in the major JPY crosses. EURJPY has poked down toward the key range low and is on the verge of interacting with the 200-day moving average in the low 131.00s. A break of this area could lead to a further 200-300 pip selloff.
USD looks bullish from a momentum perspective as the most recent new low has been thoroughly rejected and our MACD indicator has thoroughly turned around. A firmer sign of upside potential would be a move above the 0.9450 pivot area for a try at a more profound rejection of the bigger bear trend.
USDCAD has been on a bumpy ride over the last couple of sessions, after a weak Canadian Retail Sales release saw the pair testing the 200-day moving average and the last minor 76.4/78.6% Fibonacci zone near 1.2750; it then pushed back lower on a modest January CPI upside surprise today.
The bulls have the upper hand if the 1.2600-50 zone that was pivotal on the way up offers support.
EURSEK is eyeing its highest close since the global financial crisis era after the Riksbank minutes showed a continued dragging of heels on the anticipated timeframe for unwinding of the bank's low policy rate. The 10.00 level now becomes the downside pivot of note on this move above that key level.
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.