USD pushing through more lines in the sand

John Hardy

Head of FX Strategy

The USD rally continues to grind away today, taking EURUSD well away from the last local Fibonacci retracement level of note (the 1.1937 area, near the day high), through the 200-day moving average in GBPUSD, and even attacking the big 1.3500 level, down through 0.7500 in AUDUSD and 0.7000 in NZDUSD.

The last major holdout for the moment is USDJPY, where the 110.00 level is not under fire yet, perhaps due to nerves linked to President Trump’s decision on Iran later today. The most compelling scenario, possibly, for USD bulls is one in which Trump says something along the lines that “we are making tremendous progress” but delays a further decision for now which triggers a bit of risk-on and a weaker US Treasury market, driving higher US yields and taking USDJPY back higher as well.

On the flip-side, a risk-unfriendly announcement is more likely to continue to aggravate the emerging market sell-off, as EM look to be a lose/lose either way if either a) yields rise or b) risk appetite drops.

Enlarge

You can access both of our platforms from a single Saxo account.

Disclaimer

The Saxo Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 Bank 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 (https://www.home.saxo/legal/niird/notification)
- Full disclaimer (https://www.home.saxo/legal/disclaimer/saxo-disclaimer)