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01 August 2017 at 7:17 GMT
From the Floor: 'Nothing to celebrate in the UK' — #SaxoStrats
#SaxoStrats • 'Sterling looking ambitious' ahead of BoE, given Brexit troubles: Hardy
• European earnings season sets EBITDA record, US also strong
• Nasdaq 100 reversal leaves sellers in control: Larsson
By Michael McKenna
A raft of incoming data releases and central bank statements make for "a pretty busy week ahead," according to Saxo Bank head of forex strategy John J Hardy.
One pair to watch amidst all of the noise is cable, where Hardy points to an increasingly ambitious tone in GBPUSD despite Britain's lengthy list of mainly Brexit-related political and economic risks.
"There is really nothing to celebrate about the UK," says Hardy, adding that Thursday's Bank of England meeting could well prove the catalyst for a dfownward move.
GBPUSD traded at 1.3215 as of 0755 GMT today.
Beyond Britain, Hardy says that the Australian dollar could be overstretched as well citing last night's Reserve Bank of Australia board meeting which saw the central bank fretting about an overly high AUD.
"Anything higher than about 0.80 in AUDUSD looks like a sell," says Hardy.
The RBA will be out with its quarterly statement on Friday.
Cable: too far, too fast?
In stocks, Saxo Bank head of equity strategy Peter Garnry reports that the European earnings season is stronger than it has been for over 10 years with EBITDA readings in particular soaring to a new record.
The strength seen on the Continent has been largely matched in the US as well, says Garnry, adding that investors "shouldn't be afraid of equity markets" based on low volatility alone.
"It's changes in volatility that could prove an issue [and not merely the current low readings]," he says.
On the Nasdaq 100, Saxo Bank technical analyst Kim Cramer Larsson says that sellers likely remain in control given the strong top-end reversal pattern in play. In Larsson's view, we could see a dip to the 5,800 level, although it is the 5,575 level that is the real risk.
"A close below that mark could see all hell break loose," says the Saxo analyst.
Finally, Larsson reports that the bullish trend in WTI oil is likely to continue in the short term. "I don't see anything afoot that will stop the run", he says, pointing to resistance levels at $50/barrel (now broken) and ultimately $55.25/b.
Today's data calendar sees Eurozone GDP out at 0900 GMT, a Canadian manufacturing PMI print at 1330 GMT, and a US ISM manufacturing release at 1400 GMT, among others.
