The G-10 rundown
USD – the US dollar dipping again today on what is arguably the first real trading day of the year as traders return from the holidays in the US and Europe – looking for technical signs across USD pairs
EUR – the final services PMI data out of Europe nudged a bit higher and we watch EURUSD for a significant move above 1.1200 for a sign that a real shift is occurring in the pair.
JPY – the yen absorbing safe haven flows on the geopolitical distractions, but if the headline risk quickly calms in the near term, we could see the yen in a race to the bottom with the US dollar.
GBP – looking at how the economy in the UK picks up from here – or not, but GBPUSD looking comfortable above 1.3000 while EURGBP has work to do to the downside to suggest that isolated sterling strength is present. January data will be the first full month clear of most Brexit distractions in a long time.
CHF – the geopolitical situation has EURCHF pegged near the cycle lows and the latest sight deposit data from Switzerland shows that they are leaning hard against franc strength.
AUD – the Australian bush fires are going to impact Australian growth and the RBA will step in with a rate cut in February, but for now, the move higher in AUDUSD is surviving above the key 0.6900-25 support area and if China manages to stabilize we could see an extension to the next targets into 0.7225-50. If ever there was an excuse for a currency-positive fiscal expansion Down Under, this is it.
CAD – The Canadian dollar is on a roll as the crude oil rally supports on the fundamental side. We still have our concerns for the currency on a weakening of the US economy, but as long as USDCAD sustains the break below 1.3000, we have open up new territory to the downside.
NZD – the kiwi is too dear in the longer term picture versus the Aussie and the recent congestion and lack of directionality now that we have reached the 1.04-1.05 zone suggests that the market . We like the upside in the longer term from these levels in AUDNZD.
SEK – the Swedish krona doesn’t like risk-off, but assuming we’re not about to suffer a major meltdown in risky assets, EURSEK bears may look for shorting as long as we stay below 9.62-65, with the 200-day moving average in the heart of that zone.
NOK – EURNOK in mostly sideways action as the pair has reached a key objective in the 9.85 area and the strong oil prices support NOK, while risk-off is a head-wind. Barring a meltdown in risk appetite, we still like the idea of the pair finding resistance ahead of 10.00 for a fresh move lower into the 9.60 area.