The G-10 rundown
USD – has pulled back here from the brink – only of tactical interest for the rare USD bull out there unless we are about to lurch into a major consolidation of recent macro trading themes and see a sudden meltdown in risk appetite.
EUR – as noted above, a bit of momentum divergence here – but the move has been so aggressive in the euro that it can absorb a solid sell-off tactically without reversing the trend. First area of interest if we stick a close lower could be 1.1625 Fibo retracement.
JPY – suspecting that we see directional sympathy with the USD in the crosses as we see USD firmness today accompanied by a matching degree of JPY strength.
GBP – nothing to write home about from the Bank of England, which is expecting the unemployment rate to peak out at 7.5% and for the economy to return to pre-virus levels by late 2021. Perhaps the lack of more dovishness from the BoE behind a modest GBP comeback today, even outpacing a firm USD for today. Looks a bit unwarranted, but EURGBP getting interesting to the downside if it punches through 0.8950-25.
CHF – the franc grinding higher against the euro, but not a technically notable move until sub 1.0700 again in EURCHF and SNB likely throwing intervention against every tick.
AUD – one of the most sensitive currencies here if we are seeing the early phase of any hiccup in recent trends, even if just a brief bout of risk off on EM concerns. Hard to wax outright bearish AUD unless iron ore and other commodities prices stumble badly and investors question the inflationary narrative.
CAD – the major development has been the break of the 1.3350-1.3300 zone in USDCAD, but yesterday’s oil price move through resistance is stumbling badly and we are getting a bit of risk off here – still, we would need a reversal back to 1.3400-50 to call a false break here.
NZD – AUDNZD approached that key 1.0865-80 area but shied away on its first attempt. Have to wonder if AUD underperforms tactically if the reflationary narrative suffers a setback here. NZDUSD is closer to a downside pivot in the 0.6575 area than its commodity dollar peers.
SEK – a whiff of risk off today is seeing SEK respond in kind and heading lower – squeeze risks picking up if this continues and EURSEK pulls up through 10.35. Sweden’s Q2 GDP did outperform EU peers with its virus approach of “staying open”, but disappointed expectations slightly in registering a -8.6% QoQ reading.
NOK – EURNOK approached the 200-day moving average again yesterday, which has now moved up to 10.59, but with the oil surge yesterday in danger today, we hold our breath on the EURNOK outlook as a smashing of oil prices back into the prior range or worse would likely see NOK suffer further against the euro.