The G-10 rundown
USD – the greenback needs to take a stand soon to avoid a larger technical breakdown, with pairs like EURUSD, AUDUSD and NZDUSD all near make or break levels.
EUR – the euro is banging around the last tactical resistance areas around 1.1050-75, with the ECB meeting as the decider. Note sure how the market plays reactivity as we see the ECB as largely ineffective in doing much besides bringing relief to EU banks.
JPY – it’s time for the yen to snap back here to the strong side to avoid more significant damage – will continue to trade in sympathy with the direction (inverse correlation) in bond yields. 107.00-25 a key zone in USDJPY – watching where the pair closes today for a broad indication.
GBP – Johnson’s latest attempt at snap elections fails but sterling traders may take little solace as the outlook remains extremely uncertain when a hostage prime minister is asked to negotiate a Brexit deal.
CHF – the back up in bond yields feeding a bit of weakness, but this is already fading – and not sure EURCHF can make it to 1.1000 this time around.
AUD – AUDUSD bears will want resistance to come in ahead of 0.6900 and this seems like as good a time as any to test the strength of the longer term downtrend.
CAD – USDCAD has perhaps squeezed all it can out of the Bank of Canada’s recent hawkish stand at its meeting. Constructive on the return of upside prospects on a close back above 1.3250.
NZD – ditto for AUDUSD, and disappointing to see AUDNZD getting bogged down here – likely need a NZD-negative catalyst to reinvigorate the rally there.
SEK – the krona’s comeback attempt spoiled by very weak CPI readings on all fronts, including a dip in the core year-on-year to 1.3%, the lowest since 2016. Oh the futility of NIRP and QE…
NOK – an absurdly weak headline CPI number, but the year-on-year core measure merely dips to 2.1%. The EURNOK breakdown has halted this morning ahead of the key 9.80-75 area and a close significantly back above 9.90 post-ECB suggests risk that downside will not soon be realized.
Upcoming Economic Calendar Highlights (all times GMT)
- 0830 – UK Aug. Jobless Claims Change
- 0830 – UK Jul. Earnings/Employment data
- 1215 – Canada Aug. Housing Starts
- 1700 – US 3-Year Treasury Auction