- Yen has been reluctant to give back significant portions of its gains
- Commodity dollars are near critical support versus the USD
- EURUSD is nervous but quiet as longer-term trendline comes into view
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 - weekly
The EURUSD longer-term trendline stretching back years has come into view and the pair posted a bearish evening star (-ish) formation on the weekly chart. The implications for the latter are not major, as we have not rejected any major new levels to the upside, only the minor 1.2300-25 pivot zone. The bigger structural developments would be a failure of the 1.2100 area and especially the entire zone back to 1.2000. Until then, the bears can only make tactical arguments as long as we remain below the tactical pivot.
USDJPY - weekly
We continue to focus on the 108.00 area as a very important level for USDJPY, below which the temperature could heat up across the FX market. There isn't much in the way of support until down towards 100.00.
GBPJPY - weekly
The GBPJPY chart has suffered a major reversal and the selling could intensify if risk conditions worsen again, particularly after the Bank of England's rather clear hawkish turn last week entirely failed to encourage any sustained sterling strength.
The USDCAD chart is rather typical of the state of play in USD/Commodity charts, as any further USD strength thoroughly neutralises the prior regime of USD weakness. Note that both USDCAD and AUDUSD are interacting with their 100-day moving averages recently, in the case of USDCAD around the 1.2610 level.
– Edited by Clare MacCarthy
John J Hardy is head of FX strategy at Saxo Bank