John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Article / 14 November 2017 at 15:51 GMT

FX Board: Euro soars, especially versus the hapless SEK and NOK

Head of FX Strategy / Saxo Bank
Sweden's krona weakened against the euro. Photo: RPBaiao /

By John Hardy

Please see today's FX Board PDF attached to this post for the latest Notes of Interest, Trend and Trend Heat readings, as well as a few thoughts on key chart developments below.

Key developments in FX today:
  • The euro was strong across the board. Negative developments to start the week for sterling saw EURGBP popping higher, and today it was EURUSD and EURJPY's turn on a strong German Q3 GDP data point and more euro buying against the Scandinavian currencies as EURNOK and especially EURSEK were heavily bid after key data releases for Norway and Sweden.
  • The USD outlook remains muddled, though it wouldn't take much of a broad sell-off to put a floor under the greenback - the EURUSD rally is a poor proxy for the broader USD picture due as nearly all of the upside today was on a strong.

The strong pull higher back into the higher zone and above the oft-noted head and shoulders formation neckline around 1.1670 takes the chart focus back higher, perhaps to 1.2000 and even beyond, though it might be helpful for the "beyond" part to see a more broadly weaker USD. The downside pivot line move up to the 1.1675-1.1700 area that was the focus on the way up.
eurusd Source: Saxo Bank
The AUDUSD finally poked below the obvious 0.7625 area downside level today, but that action was disrupted by a strong Australian NAB confidence survey overnight and the status of the break was unclear before the price action tilted lower later in the day again. Tomorrow sees the US economic calendar highlights of the week and Thursday's Asian session sees Australia employment data - so we should have a clear status on which side of the 0.7625 pivot we stand coming into Europe's Thursday session.
Source: Saxo Bank

AUDNZD tried to get something going at the last gasp area ahead of 1.1000. This looks like the last chance tactically for the bulls to make a stand - and the action late today not encouraging, though we haven't yet reversed the tactical rally attempt. if the 1.1000 area folds, the risk is back toward 1.0800. A strong close encourages fresh upside - though it might require an NZ data/policy impulse.
Source: Saxo Bank

One of the most dramatic moves in any pair recently relative to average trading ranges (today's EURSEK range thus far more than 3 ATR), EURSEK ripped higher through the 9.80+ resistance and only has the 10.00 area as the next level of note (and nominal highs above, though the highest daily close back when EURSEK hit 10.00 was closer to 9.96).
Source: Saxo Bank

The technical situation for EURSEK and EURNOK is almost identical, as today's Norwegian GDP released failed to offer the NOK any support ahead of the euro steamroller.
Source: Saxo Bank

John J Hardy is head of forex strategy at Saxo Bank
Download document

FX Board for Tuesday, November 14, 2017


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