FX Chart Highlights: NZD weakness awaits confirmation, EURUSD dives

Forex 4 minutes to read

John Hardy

Head of FX Strategy

Summary:  The US dollar is broadly bid here, with implications for EURUSD traders in particularly on a weak close today. Tactically, NZD crosses face an important test as the bearish trend confirmation for the kiwi is increasingly in evidence ahead of the important Q3 NZ CPI release later today.


A few highlighted charts where important technical events are unfolding.

EURUSD – a reversal?
EURUSD is in retreat after the recent rally never saw the pair fully retracing the full extent of the prior wave lower, and never seriously threatening the critical 1.1110 area first approached all the way back in April of this year. The near-term pressure appears to be for a retest of the lows if the tactical and psychological pivot area of 1.1000 fails on today’s close.

Source: Saxo Group

NZDUSD – awaiting confirmation
NZDUSD performed a smart reversal after Friday’s attempt at an upside break, providing a fresh hook for new bearish positions, and we await the potential for further follow through lower on the generally strong USD picture, but possibly on any data misses from New Zealand, with the important NZ Q3 CPI data point up tonight. Note that the lower line is the major post-global financial crisis low from 2015 for the pair.

Source: Saxo Group

AUDNZD – ditto
As with our discussion of NZDUSD above, we have kiwi weakness again in evidence here after the recent consolidation was rather shallow and never took a full look lower toward the 200-day moving average, so far an encouraging sign for secular AUDNZD bulls. We are awaiting further confirmation of the tactical turning point back higher (or rejection of that notion) over tonight’s New Zealand Q3 CPI release. A particularly weak CPI data point could move forward the market’s anticipation of RBNZ easing and drive a follow-up rally toward 1.1000 and higher.

Source: Saxo Group

EURNOK – pressuring to the upside again.
EURNOK is eyeing its highest close for the cycle as weak oil prices weigh on NOK -  a real squeeze could be afoot to points far north if both a) the Brent crude price can’t take a stand ahead of 50 dollars and b) global risk sentiment rolls over again for any reason – for example on US-China trade talks failing to progress. The key driver could be the psychological separation from the assumed general cap of the round level of 10.00, which could force short volatility players to cover and insufficiently hedged participants to play catch-up with the move.

Source: Saxo Group
Disclaimer

Saxo Capital Markets (Australia) Pty Ltd prepares and distributes information/research produced within the Saxo Bank Group for informational purposes only. In addition to the disclaimer below, if any general advice is provided, such advice does not take into account your individual objectives, financial situation or needs. You should consider the appropriateness of trading any financial instrument as trading can result in losses that exceed your initial investment. Please refer to our Analysis Disclaimer, and our Combined Financial Services Guide and Product Disclosure Statement. All legal documentation and disclaimers can be found at https://www.home.saxo/en-au/legal/.

The Saxo Bank Group entities each provide execution-only service. Access and use of Saxo News & Research and any Saxo Bank Group website are subject to (i) the Terms of Use; (ii) the full Disclaimer; and (iii) the Risk Warning in addition (where relevant) to the terms governing the use of the website of a member of the Saxo Bank Group.

Saxo News & Research is provided for informational purposes, does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. No representation or warranty is given as to the accuracy or completeness of this information. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. No Saxo Bank Group entity shall be liable for any losses that you may sustain as a result of any investment decision made in reliance on information on Saxo News & Research.

To the extent that any content is construed as investment research, such content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication.

Please read our disclaimers:
- Full Disclaimer (https://www.home.saxo/en-au/legal/disclaimer/saxo-disclaimer)
- Analysis Disclaimer (https://www.home.saxo/en-au/legal/analysis-disclaimer/saxo-analysis-disclaimer)
- Notification on Non-Independent Investment Research (https://www.home.saxo/legal/niird/notification)

Saxo Capital Markets (Australia) Pty Ltd.
Level 25, 2 Park Street
NSW 2000
Sydney
Australia

Australia

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit www.home.saxo/en-au/about-us/awards

Saxo Capital Markets (Australia) Pty Ltd ABN 32 110 128 286 AFSL 280372 (‘Saxo’ or ‘Saxo Capital Markets’) is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Combined Financial Services Guide & Product Disclosure Statement to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as CFDs and Margin FX products may result in your losses surpassing your initial deposits. Saxo Capital Markets does not provide ‘personal’ financial product advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Capital Markets does not take into account an individual’s needs, objectives or financial situation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the US and other countries. AppStore is a service mark of Apple Inc.

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website is not intended for residents of the United States and Japan.
Please click here to view our full disclaimer.