The G-10 rundown
USD – the USD broadly lower and aggressively so in some EM pairs – note the aggressive move lower in USDZAR even with platinum holding back fundamental support for ZAR yesterday. Within G10, still preferring to focus on USDJPY and whether that is more of a JPY story than a USD story here as noted below.
EUR – a bullish reversal in EURUSD yesterday until proven otherwise as risk sentiment pulled back from the (at least tactical-) abyss in the US and the post-FOMC USD rally fizzled. Still, EURUSD has to build a lot of further energy to pull clear of the 1.1900-1.2000 zone that has capped the action for about six weeks now.
JPY – the USDJPY grind lower has been consistent, but other JPY crosses retain sensitive to risk appetite swings and other distractions. Besides the USDJPY close for the week and whether we are headed to 100.00 in weeks ahead, interesting to note the status of the EURJPY sell-off as that pair bounced yesterday together with EURUSD. EURJPY needs a hold below 124.50-125.00 for retain broad interest in JPY strength.
GBP – NIRP potential is negative but Brexit outcomes will eventually weigh more as noted above.
CHF – Falling asleep here as EURCHF bounces back into choppy range and we know that every dip see SNB intervention.
AUD – the aimless Aussie is going nowhere in a hurry – pulling back the focus in AUDSUD to 0.7400 to the upside and 0.7200 to the downside before reacting to price action. Also curious to see if AUDJPY volatility gets supercharged (to the downside) if this late JPY strength persists and a larger risk sentiment consolidation materializes.
CAD – the 1.3250 area so very clear as an upside break catalyst in USDCAD, but the price action pulled back from there after oil prices surged further and the USD eased lower yesterday.
NZD – the pronounced strength here is interesting ahead of next week’s RBNZ and may be a capitulation of NZD shorts in AUDNZD as we note the important 1.0800 area is falling there. The RBNZ has its work cut out for it if it wants to counter a higher kiwi, having already signaled active preparation for negative rates and yet still seeing a strong currency in key pairs.
SEK – EURSEK caught in tiny range as we await flash PMIs out of Europe next week and the Riksbank meeting up on Tuesday. If risk sentiment lurches lower – we may explore resistance into the 200-day moving average near 10.56 currently
NOK – a very weak performance from NOK here as EURNOK eyes upside resistance into 10.75-80 even after a solid oil rally in recent days, if that fades we have strong risk of a squeeze higher towards 11.00.
Upcoming Economic Calendar Highlights (all times GMT)
- 1030 – Russia Key Rate
- 1200 – Russian Central Bank’s Nabiullina to Speak
- 1230 – Canada Aug. Home Price Index
- 1230 – Canada Jul. Retail Sales
- 1400 – US Fed’s Bullard to Speak
- 1400 – US Preliminary University of Michigan Confidence No time given – South Africa SARB Rate Announcement