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Article / 16 January 2018 at 15:42 GMT

FX Board: Finally a bit of US consolidation – #SaxoStrats

Head of FX Strategy / Saxo Bank
Denmark
  • USD is finally bouncing a bit after negative euro news 
  • Potential German coalition plan failure weighed on EUR
  • Elsewhere, the NOK continues to make waves

By John J Hardy

Key developments in FX today:

Today saw a run of the mill USD bounce/consolidation after the recent sharp weakening of the greenback. This has some further room to run without challenging the downside outlook for the USD. Benchmark levels that might start to challenge the weak USD narrative not until well below 1.2100 in EURUSD, above 111.75 in USDJPY and below 1.3650 for GBPUSD.

The sole focus in our charts today is on NOK, where the 9.60 level remains in play in EURNOK – a fairly well-delineated pivot level, and the NOKSEK pair is getting interesting into its 200-day moving average.

Chart: NOKSEK
Not a pair we highlight often, but NOKSEK having a look higher at its 200-day moving average, an indicator that has proven pivotal for the outlook since it was last crossed in early 2017. Further strength in oil prices might prove a driver of upside into 1.0400 or even higher.
noksek
Source: Saxo Bank


– Edited by Clare MacCarthy

 

John J Hardy is head of FX strategy at Saxo Bank 

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FX Board for Tuesday, January 16, 2018

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