Details Cookies
Cookie policy

This website uses cookies to offer you a better browsing experience by enabling, optimising and analysing site operations, as well as to provide personalised ad content and allow you to connect to social media. By choosing “Accept all” you consent to the use of cookies and the related processing of personal data. Select “Manage consent” to manage your consent preferences. You can change your preferences or retract your consent at any time via the cookie policy page. Please view our cookie policy here and our privacy policy here

FX Update: USD pivotal ahead of pre-Thanksgiving US data dump FX Update: USD pivotal ahead of pre-Thanksgiving US data dump FX Update: USD pivotal ahead of pre-Thanksgiving US data dump

FX Update: USD pivotal ahead of pre-Thanksgiving US data dump

Forex 6 minutes to read
John Hardy

Head of FX Strategy

Summary:  The complacency melt-up continues in equity markets and continues to see muted volatility in FX, though the USD has edged to resistance in many places and will have a hard time not reacting to incoming data if it surprises today, especially any notable upside surprise in jobless claims.

Extreme low volatility continues to plague the currency market as complacency reigns and we all wonder whether it is worth taking a position ahead of next week’s more important US data cycle, where we get updates on the ISM surveys and the Friday jobs report. There is a rather large flurry of data up today that may be worth reacting to, and given that the USD is so close to key resistance levels in a number of pairs, the action could spill-over already today on positive or negative data, depending on the spin.

The AUD was weak overnight after Australia’s big lender Westpac predicted two more rate cuts that would take the rate to 0.25%, beyond which the RBA said as recently as yesterday that QE is the policy option as negative rates are not seen as viable. The market is pricing low odds of a December RBA rate cut, but greater than 50/50 for a February cut. By mid-2020, probabilities are only slightly above 35% for that second rate cut, so there is a bit more to wring out of the short end of the yield curve. And any notable weakness in the jobs data will quickly see the two cut scenario fully priced and the market mulling the timing and magnitude of RBA QE.

Data-wise, I will focus most on the weekly initial jobless claims up a day early today because of the US holiday. As mentioned yesterday, a third bad print in a row could prove a warm up for an ugly miss in next week’s November jobs report. We discussed some of the other evidence of a weakening US labor market in this morning’s Market Call podcast.

There’s quite a load of data today from the US, besides the weekly claims number we have two more interesting data points – the PCE inflation numbers and the US Durable Goods Orders numbers. Core durable goods orders are in a bad state in recent months, but another weak reading may be largely ignored over by this market if hopes of a US-China trade deal remain high. Late in the day, the Fed Beige Book will be released.

Chart: USDJPY weekly Ichimoku
USDJPY has turned back higher again as it is tough for the yen to catch any kind of bid in a massive global equity market melt-up. The move has the pair joining EURUSD and AUDUSD in trading near a key USD resistance point. It’s tough to know how much this very quiet market will hang its hat on data points today ahead of the big US holiday weekend (yes markets are open half a day on Friday in the US, but most have the rest of the week off starting today.) but USDJPY is historically quite reactive to US data. Note that the 109.35 area is the 61.8% retracement of the prior sell-off wave and the bottom of the Ichimoku cloud. Strong US data surprises could bring upside pressure and weak ones could keep a lid on the pair for now.

Source: Saxo Group

The G-10 rundown

USD – the US dollar is firm and looking to rally farther if nothing upsets the boat – though not sure that the USD falters even on weaker data outside of pairs like USDJPY.

EUR – waiting for that policy review from Lagarde, until then, the technical focus on 1.1000 in EURUSD, though we’re not expecting fireworks on a break – nor is the options market as 3-month implied volatility for EURUSD options has reached an historic low below 4.5% over the last couple of sessions.

JPY – the yen bowing under the onslaught of strong risk appetite and reach for carry even as long US treasuries remain near recent lows in the yields – could be the most reactive currency to negative US data surprises.

GBP – sterling facing modest headwinds on some of the recent polling data suggesting a tighter race than previously – but a big, widely anticipated MRP poll that generates a bottom-up picture of election outcomes is up tonight at 10 p.m. UK time and could generate GBP volatility.

CHF – the franc remains largely inert, but interesting to see if USDCHF breaking above parity as EURUSD breaks down through 1.1000 generates flow. View on CHF is flat until we drift outside of 1.0850-1.1050 range in EURCHF.

AUD – the Aussie lower still overnight, though still within the microscopic range in AUDUSD after Westpac announced a forecast for two rate cuts from the RBA. The pronounced AUD weakness challenges the narrative that prospects for a US-China trade deal are holding up the market in general

CAD – the USDCAD rally signal has weakened as we await fresh impulses from US and Canadian data surprises. US data weakness could see a softer CAD in the crosses, though that will have to be weighed against China-linked weakness in other FX.

NZD –The RBNZ financial stability report focuses on macroprudential policy to prevent lower rates triggering bubbles. AUDNZD has now dipped more firmly below the 200-day moving average around 1.0570.

SEK – The Sweden Household Lending survey posted a 4.8% year-on-year reading in October, matching the original reading for September, though that one was revised higher to 5.0%, so still the weakest data point of the cycle. SEK not noticing and look firm as EURSEK continues to sustain the recent range break below 10.62.

NOK – very supportive backdrop for NOK needs to be weighed against seasonality, which is challenging for the krone into year end. Looking for that close below 10.05-00 before we have the technical trigger for a NOK rally.

Today’s Economic Calendar Highlights (all times GMT)

  • 0930 – Euro Zone ECB’s Lane to Speak
  • 1330 – US Weekly Initial Jobless Claims
  • 1330 – US Q3 GDP revision
  • 1330 – US Oct. Durable Goods Orders
  • 1445 – US Nov. Chicago PMI
  • 1500 – US Sep. PCE Inflation
  • 1530 – Weekly DoE Crude Oil/Product Inventories
  • 1700 – US Weekly Natural Gas Storage
  • 1900 – US Fed Beige Book

The Saxo Group entities each provide execution-only service and access to Analysis permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to Saxo News & Research and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Group by which access to Saxo News & Research is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on Saxo News & Research or as a result of the use of the Saxo News & Research. Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. Saxo News & Research does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Group and should not be construed as a record of our trading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws.

Please read our disclaimers:
- Notification on Non-Independent Investment Research (
- Full disclaimer (

None of the information contained here constitutes an offer to purchase or sell a financial instrument, or to make any investments. Saxo Markets does not take into account your personal investment objectives or financial situation and makes no representation and assumes no liability as to the accuracy or completeness of the information nor for any loss arising from any investment made in reliance of this presentation. Any opinions made are subject to change and may be personal to the author. These may not necessarily reflect the opinion of Saxo Capital Markets or its affiliates.

Saxo Markets
88 Market Street
CapitaSpring #31-01
Singapore 048948

Contact Saxo

Select region


Saxo Capital Markets Pte Ltd ('Saxo Markets') is a company authorised and regulated by the Monetary Authority of Singapore (MAS) [Co. Reg. No.: 200601141M ] and is a wholly owned subsidiary of Saxo Bank A/S, headquartered in Denmark. Please refer to our General Business Terms & Risk Warning to consider whether acquiring or continuing to hold financial products is suitable for you, prior to opening an account and investing in a financial product.

Trading in financial instruments carries various risks, and is not suitable for all investors. Please seek expert advice, and always ensure that you fully understand these risks before trading. Trading in leveraged products such as Margin FX products may result in your losses exceeding your initial deposits. Saxo Markets does not provide financial advice, any information available on this website is ‘general’ in nature and for informational purposes only. Saxo Markets does not take into account an individual’s needs, objectives or financial situation.

The Saxo trading platform has received numerous awards and recognition. For details of these awards and information on awards visit

The information or the products and services referred to on this website may be accessed worldwide, however is only intended for distribution to and use by recipients located in countries where such use does not constitute a violation of applicable legislation or regulations. Products and Services offered on this website are not intended for residents of the United States, Malaysia and Japan. Please click here to view our full disclaimer.

This advertisement has not been reviewed by the Monetary Authority of Singapore.