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Weekly FX Chartbook: Dovish Fed and ECB bets picking up

Forex 5 minutes to read
Charu Chanana 400x400
Charu Chanana

Head of FX Strategy

Summary:  US dollar extended its bearish momentum but is now looking oversold. EUR bearish trend may however have room for a catch-up as ECB pricing is slipping dovish and EUR crosses against JPY, CHF, AUD, NZD could have room to adjust. Focus turns to RBA meeting this week where a hawkish hold could propel AUD further, and US jobs reports that could further weigh on USD.


4_FX_Weekly
Gold outperformed last week by a huge margin as Treasury yields slipped. Other rate-sensitive FX such as JPY and CHF also gained strongly along with NZD after RBNZ's hawkish hold standing in wide contrast to increasingly dovish bets for Fed and ECB.
4_FX_Momentum
Momentum indicators point towards further bullishness on Gold and JPY, while AUD is seeing a positive shift in recent trend as RBA decision nears and Nokkie still riding on expectations of a December rate hike.
4_FX_Positioning
Forex COT to the week of Nov 28 indicates a sharp drop of over 40% in USD longs. EUR longs were added further, followed by GBP and AUD, partly offset by added short position sin JPY, CHF and NZD.
4_FX_G10 views

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