FX Update: NZD knocked lower by RBNZ. JPY surge fizzles

The G-10 rundown

USD – trying to post a comeback after two days of steep losses and it is tough to distinguish between an inverse chart of the broad USD versus the S&P 500 Index (sent a chart of this on my Twitter: @johnjhardy)

EUR – EURUSD backtracking a bit here after the two-day surge that didn’t seem to have any obvious drivers. The consolidating only looks threatening for a test of the recent lows if 1.1250 is giving way (though as noted above for the USD, general risk sentiment is in the driver’s seat).

JPY – the USDJPY move lower is holding just well enough to keep things interesting, but easy to reverse with a move back above 106.80, arguably – and expect USD and JPY to move in sympathy against other currencies.

GBP – sterling faltering today in its latest attempt to get a solid foothold above 1.2500, but not in danger again until below 1.2400, with UK news heating up next week around Brexit negotiations starting Monday.

AUD – the AUDUSD has been in limbo for weeks now and needs to either vault back below 0.7000 or crumble below 0.6800 to make an impression. The Aussie strength rests on the reflationary macro theme expressed in commodities markets as we discussed in today’s Saxo Market Call.

CAD – USDCAD politely inspected the 200-day moving average below 1.3500 yesterday before bobbing back higher into the recent tight range – offering a hook for bulls to get involved, with a break above the 1.3686 pivot needed to argue that the pair is breaking higher. A close above 1.3575 or so would be first above 21-day SMA since mid-May.

NZD – kiwi smacked lower by the RBNZ and with that, NZDUSD and NZDJPY shorts perhaps offer the most tailwind for trying a contrarian attempt to trade for a risk-off move here.

SEK – risk off as the European session hits mid-morning sees EURSEK rebounding back higher – a choppy chart lacking conviction – and will likely follow risk appetite inversely.

NOK – the NOK may prove more sensitive to risk appetite swings if oil is in for a bit of consolidation as well, and the well etched 11.00 are on the EURNOK chart could have significant stops lined up above – squeeze alert if we actually see a two- to three-day correction in the equity market or worse.

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