Details Cookies
United Kingdom
Important margin product information

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX or any of our other products work and whether you can afford to take the high risk of losing your money.

Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

FX Update: USD finds support on resurgent treasury yields. FX Update: USD finds support on resurgent treasury yields. FX Update: USD finds support on resurgent treasury yields.

FX Update: USD finds support on resurgent treasury yields.

John Hardy

Head of FX Strategy

Summary:  The greenback found strong support on Friday just after it had gone over the edge in many USD pairs. The move coincided with a strong rebound in US treasury yields, theoretically in reaction to the US Retail Sales report, though the move seemed out of proportion with the incoming data. The reversal in many USD pairs suddenly sets the situation on edge for USD bears here, who may be out of business for a while if the market is forced to reprice the Fed Funds curve higher again.

Today's Saxo Market Call podcast
Today's Global Market Quick Take: Europe from the Saxo Strategy Team

FX Trading Focus: USD jumped as US treasury yields backed up, with the incoming data a weak justification for the move. GBP on its back foot ahead of CPI data. Where are we meant to focus this week?

The US treasury market sold off heavily on the US Retail Sales report Friday, suggesting that the move had something to do with that report. But there was little in the numbers to justify an almost 15 basis point jump in 2-year yields by the end of the day, with yields also rising all along the curve. The Fed’s Christopher Waller (a voter as Board of Governors member) was out with hawkish rhetoric Friday as well, but most of the reaction was over the indifferent retail sales data. By the end of the day, the market had bumped its odds higher for a rate hike at the May 3 FOMC meeting and slightly more than fully priced a 25 basis point higher rate through the June FOMC meeting.

The USD bullish view here would build on the idea that the market was far too quick to discount the Fed forward rate curve so extensively in the panic that ensued from the Silicon Valley Bank collapse and other banking sector turmoil of late. Indeed, the latest weekly US commercial bank deposit data saw deposits rising a chunky $60B through April 5. Other evidence that bears close watching this week is what the medium and smaller US regional banks are reporting in their earnings calls for Q1 and the guidance they provide. A couple of these banks (including M&T) are reporting today and a full picture of the scale of the pressure on banks should be available by the end of this week as a flurry are reporting Tuesday-Thursday. Otherwise, it is a thin week on the US data calendar (judging from Friday’s action, data seems just an excuse here anyway) outside of housing related numbers like today’s NAHB survey number (probably stabilizing further after February rebound?) and regional manufacturing surveys.

GBPUSD reversed hard on Friday on a combination of both sudden new USD strength and an extension of recent sterling weakness, perhaps as the Bank of England is a known dragger-of-its-heels on tightening policy further and as it maintains a far more aggressive forecast on impending disinflation. The UK March CPI report is up on Wednesday. The move erases the entire attempt at the prior 1.2525 pivot high from earlier this month and the prior major double top in the 1.2445 is also a consideration. Still, given the scale of the rally off the sub-1.1900 lows, we would arguably have to reverse down through the 61.8% retracement of the large up-wave around 1.2087 to firmly reset the focus lower. Still, the high momentum capping of the price action has set the bar quite high for GBPUSD bulls locally.

Source: Saxo Group

Table: FX Board of G10 and CNH trend evolution and strength.
The USD reversal not yet picking up yet in the overall trend picture, while the JPY weakness deepens and the former sterling strength has now entirely evaporated (note that GBP has the strongest directional two-day momentum reading of the G10 currencies.) CHF could prove vulnerable if yields continue to rise.

Source: Bloomberg and Saxo Group

Table: FX Board Trend Scoreboard for individual pairs.
Note the extension of the AUDNZD move higher ahead of the quarterly NZ CPI release on Thursday – critical for that pair. NZDUSD also looks heavy on range support. AUDUSD never got anything going to the upside and is thoroughly stuck here between 0.6600 and 0.6800. And I am not sure I can recall a trend surviving no setbacks for 95 days, but that is currently what this EURNOK rally has achieved.

Source: Bloomberg and Saxo Group

Upcoming Economic Calendar Highlights

  • 1200 – Poland Mar. CPI Core
  • 1230 – US Apr. Empire Manufacturing
  • 1300 – UK Bank of England’s Cunliffe to speak
  • 1400 – US Apr. NAHB Housing Market Index
  • 1500 – ECB President Lagarde to speak
  • 0200 – China Q1 GDP
  • 0200 – China Mar. Industrial Production 
  • 0200 – China Mar. Retail Sales


The Saxo Bank Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website. This content is not intended to and does not change or expand on the execution-only service. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research 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. To the extent that any content is construed as investment research, you must note and accept that the 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 under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

Saxo Markets
40 Bank Street, 26th floor
E14 5DA
United Kingdom

Support Centre
For existing clients, please click here to request support via the Support Centre.

Have a question about our products, platforms or services? Visit the Support Centre to find answers for our most frequently asked questions. If you are still unable to locate an answer to your question, you will also find contact details for your local Saxo office to speak with a representative.

Contact Saxo

Select region

United Kingdom
United Kingdom

Trade Responsibly
All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
Additional Key Information Documents are available in our trading platform.

Saxo Markets is a registered Trading Name of Saxo Capital Markets UK Ltd (‘SCML’). SCML is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871.

This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo Markets assumes no liability for any loss sustained from trading in accordance with a recommendation.

Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.