- FX on edge as the key USDJPY pokes below 108.00 in today's trade
- USDJPY hasn't yet broken 2017 low at 107.32
- Euro looks better supported and the commodity dollars are weaker
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.
USDJPY - weekly
The JPY crosses are providing most of the drama with the move below 108.00 in USDJPY the most noteworthy development on the day – any further weakening in global risk appetite threatens further downside. Theoretically, there are Fibonacci retracements here and there to the downside, but no serious support until the psychological and real support area down at 100.00 if the market temperature really heats up again.
GBPJPY – weekly
Plenty of fundamental support recently for sterlling with last week's hawkish pivot from the Bank of England and the CPI upside surprise, and yet sterling can't put together a meaningful rally. The recent bearish reversal has taken the bullish outlook back to neutral and the downside risks might pick up precipitously if the pair moves through the 147.50-00 area a bit lower from here.
The euro bounced against almost everything besides the yen today, and the commodity dollars were notably weak on the day, seeing new highs in the likes of EURCAD and nearly so, as of this writing in EURAUD, both of which look vulnerable for new highs for the cycle as we await whether the key 200-day moving averages in the USD/commodity dollars give way in the sessions ahead.
Source: Saxo Bank
– Edited by Clare MacCarthy