Weekly FX Chartbook: Dovish Fed and ECB bets picking up Weekly FX Chartbook: Dovish Fed and ECB bets picking up Weekly FX Chartbook: Dovish Fed and ECB bets picking up

Weekly FX Chartbook: Dovish Fed and ECB bets picking up

Forex 5 minutes to read
Charu Chanana

Head of FX Strategy

Summary:  US dollar extended its bearish momentum but is now looking oversold. EUR bearish trend may however have room for a catch-up as ECB pricing is slipping dovish and EUR crosses against JPY, CHF, AUD, NZD could have room to adjust. Focus turns to RBA meeting this week where a hawkish hold could propel AUD further, and US jobs reports that could further weigh on USD.


Gold outperformed last week by a huge margin as Treasury yields slipped. Other rate-sensitive FX such as JPY and CHF also gained strongly along with NZD after RBNZ's hawkish hold standing in wide contrast to increasingly dovish bets for Fed and ECB.
Momentum indicators point towards further bullishness on Gold and JPY, while AUD is seeing a positive shift in recent trend as RBA decision nears and Nokkie still riding on expectations of a December rate hike.
Forex COT to the week of Nov 28 indicates a sharp drop of over 40% in USD longs. EUR longs were added further, followed by GBP and AUD, partly offset by added short position sin JPY, CHF and NZD.
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