The G-10 rundown
USD – if the dollar rally is to make a stand, it will need to do so by the end of this week. Not sure we will see anything on the data front, rather preferring to focus on Fed speakers, trade headlines, US Treasury, yields and risk appetite.
EUR – plenty of ECB speakers out this week, including Draghi out on Wednesday, though expectations have gone largely flat some time ago for ECB policy. Data-wise, interested in the German ZEW survey expectations component, which has soured badly over the last couple of months and has proven a solid leading indicator in prior cycles.
JPY – high oil prices are JPY-negative, and USDJPY has consolidated far more lightly than other USD pairs since last Wednesday. The trigger area in USDJPY remains the 110.00 level after it was probed twice over the last two weeks, with the combination of higher US yields and higher oil prices without a spike in equity volatility offering the most potent support for a new rally extension.
GBP – sterling is in the doghouse after the Bank of England meeting last Thursday and softened the language in its statement on the potential for future rate hikes while also downgrading the 2018 growth forecast. Still, is there enough to drive EURGBP out of the range to the upside? In GBPUSD, the 1.3500 area is the last life support for that pair and the consolidation there has entirely lacked bounce.
CHF – USDCHF consolidating lightly after a run all the way above parity recently. EURCHF has recovered after a brief meltdown through 1.1900, perhaps as the market has decided that Italian politics don’t offer any EU existential threat just yet.
AUD – a sharp bounce in the Aussie after a rather brutal slide. The next resistance zone is into 0.7600-50 without threatening the downtrend. Australia employment data up on Thursday.
CAD – interesting data from Canada toward the end of the week. Last week’s peak just ahead of 1.3000 underlines that level as the key barrier for further upside potential as the chart is a structural mess. More downside interest picks up if 1.2650 fails, though the bigger trigger area lower is 1.2500.
NZD – the fallout from the dovish RBNZ surprise last week continuing and AUDNZD is interacting with the pivotal 1.0800-50 area that could open up the higher range all the way to 1.1300.
SEK – a very chunky consolidation in EURSEK, mostly driven by positioning, it seems, as the underlying rate expectations adjustments have been rather modest. The EURSEK move may run out of steam here around 10.20-25 without new SEK-positive catalysts.
NOK – EURNOK teasing lower into the final range support just below 9.50 – that’s the area that unleashes trend potential toward 9.25.
Upcoming Economic Calendar Highlights (all times GMT)
• 0730 – Sweden Apr. Average House Prices
• 1000 – ECB’s Mersch to Speak
• 1015 – ECB’s Lautenschlaeger to Speak
• 1145 – ECB’s Praet to Speak
• 2310 – Australia RBA’s Debelle to Speak
• 0130 – Australia RBA Meeting Minutes