USD pushing through more lines in the sand

John Hardy

Head of FX Strategy, Saxo Bank Group
John Hardy joined Saxo in 2002 and has been Head of FX Strategy since October 2007. He focuses on delivering strategies and analyses in the currency market as defined by fundamentals, changes in macroeconomic themes, and technical developments.

The USD rally continues to grind away today, taking EURUSD well away from the last local Fibonacci retracement level of note (the 1.1937 area, near the day high), through the 200-day moving average in GBPUSD, and even attacking the big 1.3500 level, down through 0.7500 in AUDUSD and 0.7000 in NZDUSD.

The last major holdout for the moment is USDJPY, where the 110.00 level is not under fire yet, perhaps due to nerves linked to President Trump’s decision on Iran later today. The most compelling scenario, possibly, for USD bulls is one in which Trump says something along the lines that “we are making tremendous progress” but delays a further decision for now which triggers a bit of risk-on and a weaker US Treasury market, driving higher US yields and taking USDJPY back higher as well.

On the flip-side, a risk-unfriendly announcement is more likely to continue to aggravate the emerging market sell-off, as EM look to be a lose/lose either way if either a) yields rise or b) risk appetite drops.

Access both platforms from your single Saxo account.

Disclaimer

Any opinions, news, research, analyses, prices or other information contained on this website is provided as general market commentary and does not constitute investment advice or a personal recommendation and does not take into consideration your objectives, financial situation and needs. Saxo Capital Markets UK Limited will not accept liability for any loss or damage including, without limitation, to any loss of profit which may arise directly or indirectly from use of or reliance on such information. We assume no liability for errors, inaccuracies or omissions contained within these materials.

It is important that you understand that with investments, your capital is at risk. We offer leveraged products which carry risk and can result in losses that exceed deposits. 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. 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 here.

Additional Key Information Documents are available in our trading platform.

Saxo Capital Markets UK 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

Please read our full disclaimer - https://www.home.saxo/en-gb/legal/disclaimer/saxo-disclaimer