The G-10 rundown
USD – the greenback remains the flip-side of risk appetite, only exceeded in beta terms by the JPY in this market. Reluctant to jump aboard this latest move lower in the USD as a significant one.
EUR – a bit more interested in the status of euro in the crosses than in EURUSD at the moment, as I suspect that EURAUD has more potential for a large move, for example, than the former. Note EURAUD extensive interaction with the 200-day moving average.
JPY – the BoJ announced a sizable expansion of its support for corporates overnight, but the JPY selling more linked to the general risk-on move. Some JPY crosses have rather bearish setups – (GBPJPY, EURJPY, and NZDJPY just to take a few examples besides USDJPY) if we do get another surge of safe haven seeking in bond markets and risk off that drives a bid into JPY.
GBP – sterling stepped away from the abyss yesterday, but another crazy lurch in risk appetite back the other way and too much negative rate talk from the BoE could change the direction once again. Note the 200-day moving average in GBPUSD as the significant resistance there.
CHF – latest SNB data shows ongoing intervention, but this latest surge in risk appetite offers a bit of EURCHF support – pivot zone of 1.0700-1.0650 is technical key for downside risks and EU existential theme the focus through the Friday EU Council meeting.
AUD – the squeeze higher from yesterday’s lows hit an air-pocket this morning – two-way risks abound in this frenetic market.
CAD - little differentiation with other risk-sensitive FX – and willing to bite on the long side prospects on any rally and close above the 21-day moving average from here (currently around 1.3665).
NZD – the kiwi punished overnight on a story that two ex-pats arriving from the UK were discovered to be infected with Covid19 after given dispensation to exit quarantine to go to a funeral. This after the country had been declared “Covid-free” for some 24 days. Nice line in the sand now on the AUDNZD chart at just below 1.0600 for bulls.
SEK – EURSEK reversed back lower from a local high yesterday in sympathy with risk-on rally, but the move feels like it had less conviction and plenty of room for the recent consolidation of the big move lower to continue – first major test at 200-day moving average, now at 10.665.
NOK – the problem here is differentiation with everything else that is going on with NOK and Oil both correlated with one another and with risk appetite. In any case, EURNOK bulls will be under pressure on a close above about 10.90 – but especially on any new move above 11.00.
Upcoming Economic Calendar Highlights (all times GMT)
- 1230 – US May Retail Sales
- 1315 – US May Industrial Production and Capacity Utilization
- 1400 – US Fed Chair Powell to testify before Senate Powell
- 1400 – US Jun. NAHB Housing Market Index
- 2000 – US Fed Vice Chair Clarida to speak on Economic and Policy Outlook