FX Board: Look out, here comes the euro again — #SaxoStrats
- Dollar rally fades despite PCE inflation headline
- Cable 'within striking distance' of 1.36-plus range top
- EURCHF rebound 'keeps bulls in business'
- The USD rally faded badly despite the release of a slightly better than expected headline US October PCE inflation data point while the November EU CPI flash estimate disappointed at both the core and for the headline. EURUSD rebounded very sharply off of a key area in the low 1.1800s and has the bulls setting up shop again for a charge at 1.20-plus. USDJPY faded after a test toward 112.50.
- Sterling couldn't take out the 200-day moving average versus a resurgent euro later in the session, but continued higher versus the USD. GBPUSD is now within striking distance of the top above 1.3600 if no negative Brexit developments perturb the bullish action.
- NOK suffered another squeeze on longs, taking the action above 9.90 at one point. A quick intraday reversal set in, but the pair couldn't take out 9.80-75 again – this is the first downside pivot zone now – and this keeps the pressure on the upside for now, with 10.00 a likely strong psychological magnet and pivot point higher.
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— Edited by Michael McKenna
John J Hardy is head of FX strategy at Saxo Bank