12 July 2016 at 14:17 GMT
By John J Hardy
Key developments in FX today
The Japanese yen was pummeled to further heavy losses on the risk appetite recovery and rising anticipation of fresh policy moves – likely fiscal in nature – from Japan's government. USDJPY pulled handily through the first area of not around 103.50 and next is the bigger 105.00/50 zone.
The sudden political clarity in the UK helped GBP consolidate higher today, though so far GBPUSD found resistance ahead of the key 1.3200/50 zone and EURGBP dropped in rather sedate fashion.
AUD and NZD were the strongest currencies on the day, with AUDUSD trading at new local highs and NZDUSD pushing once again. Also interesting in the AUD crosses is the action in EURAUD and AUDJPY (note the Ichimoku daily cloud and the 80.00 level there). A follow through higher for these currencies from current levels shifts the focus higher still.
I shot a screen-recorded look at key charts today that is available by clicking here.
USDCHF is an interesting chart as the pair pushes on the 200-day moving average near 0.9850, a break of which pulls the focus higher to parity, the descending trendline and potentially the highs for the cycle above 1.0300, although we'll likely need a breakdown through 1.1000 in EURUSD so CHF weakness isn't doing all of the heavy lifting here. Disappoitnment for the bulls if we fall back again through the 0.9800/0.9750 zone.
Source: Saxo Bank. Create your own charts with SaxoTraderGO click here to learn more
While AUD and NZD have been flying high, CAD merely bounced today, perhaps on recent weakness in oil prices, but also perhaps in recognition of the Bank of Canada event risk tomorrow. Recently, we highlighted the importance of the 1.30/1.31 zone for bigger upside implications, and we're barely hanging in there now, so bulls will want the 1.3000 area to survive for to keep the focus on upside potential.
– Edited by Clare MacCarthy
John J Hardy is head of FX strategy at Saxo Bank