25 January 2018 at 15:28 GMT
- EURUSD breaks the 1.25 barrier during ECB presser
- Weak NZ CPI print puts focus on AUDNZD, NZDUSD
- Week to end with Trump speaking at Davos WEC
A soft New Zealand inflation print has FX traders eyeing AUDNZD for kiwi downside.
By John J 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.
EURUSD managed to pull all the way through 1.2500 during the ECB press conference before easing back a bit - and then heading back higher again. In the past, the big round levels have proved notable sticking points for EURUSD, though the next major Fibonacci level for the pair is not until just under 1.2600.
Tomorrow we have President Trump speaking at Davos and next week will see a Federal Open Market Committee meeting as well as Trump's State of the Union address.
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Source: Saxo Bank
The kiwi dipped on an ugly CPI print overnight, but partially recovered against the mightily struggling USD during the way, a testament to the scale of the greenback's weakness. The bearishness of the shooting star candlestick yesterday will be spoiled if we don't manage a weaker close today and tomorrow. The first major target on a real consolidation might be the 200-day moving average rising above 0.7125 currently.
Another way to express kiwi downside in the wake of the weak NZ CPI data could be AUDNZD, which is once again staring down the 1.1000 level after rebounding sharply off the lows this week. Bulls and bears have been frustrated here recently, but the focus shifts higher if the local pivots higher can be taken out at 1.1003 and 1.1053.
— Edited by Michael McKenna
John J Hardy is head of FX strategy at Saxo Bank