The G-10 and CNH rundown
USD - Broadly weak risk sentiment supporting the USD now, whereas it was formerly the yield spike – an interesting tightrope walk to get the right combination (for USD bears, at least) of strong risk appetite without US yields rising too quickly.
CNH – the renminbi is joining the USD consolidation parade as USDCNH pulls back north of 6.50, which was a major milestone on the way down, a further sign that the USD bearish case is under near term stress.
EUR – as noted above, the key psychological support area is 1.2000, with the 1.1900 zone carry more technical significance. Italian politics could be weighing here, though the market expression of this is not by any means dire yet in BTP’s.
JPY – the yen quite firm in the crosse sand even keeping pace with the US dollar over the last session as long US yields have backed down. EURJPY is tumbling aggressively.
GBP – the sterling rally has stalled out a bit after EURGBP looked interesting last week and now GBPUSD is facing a test of the key 1.3500 area. Still like EURGBP lower if the pair stays south of 0.8950.
CHF – getting a mild bid on safe haven flows and yields backing down again.
AUD – a decent consolidation in AUDUDS that doesn’t look more threatening until/unless the 0.7600-25 area gives way, though really the trend can stand a test of 0.7500 and even the 0.7400-25 pivot zone without signs of reversing. All depends on how quickly the reflation trade resumes.
CAD – Biden may cancel Keystone pipeline – critical for opening up more access for Canada’s crude deliveries – but the pipeline is fighting back with plans for making the pipeline “carbon neutral”. This announcement on go/no-go for Keystone could be critical for USDCAD in coming days.
NZD – still the loser against the Aussie, our key benchmark, with the next notable zone in AUDNZD up into 1.0800-50.
SEK – EURSEK at risk of a squeeze up into the next layer of resistance into 10.25-30 if this bout of weak risk sentiment persists – but still like eventually fading rallies.
NOK – after the steep crude oil rally, further retracement in oil prices could bring 10.50 into view again in EURNOK, with anything above that possibly representing a longer-term setback than one would have hoped for realizing a resumption of the down-trend and the 10.00 level anytime soon.
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