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#SaxoStrats
Global equities are on a roll thanks to a slew of robust US corporate earnings which has been followed by a clutch of as-expected or outperforming reports from several European heavyweights.
Article / 30 November 2017 at 15:38 GMT

FX Board: Look out, here comes the euro again — #SaxoStrats

Head of FX Strategy / Saxo Bank
Denmark
  • Dollar rally fades despite PCE inflation headline
  • Cable 'within striking distance' of 1.36-plus range top
  • EURCHF rebound 'keeps bulls in business'
EURGBP
Sterling may be shining, but a strong push from its continental rival 
kept EURGBP within bounds today. Photo: Shutterstock

By John J Hardy

Key developments in FX today

  • 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.

Charts: EURUSD

EURUSD found support right around the key 1.1810 Fibonacci areas (the 38.2% retracement of the entire rally off the 1.15-plus low and the 61.8% Fibo of the latest rally wave from 1.1715) as well as at the old trendline, and rebounded sharply. This is a key bullish confirmation that will have bulls focusing on the 1.2090-plus top and further progression higher from here.

eurusd

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Source: Saxo Bank 

EURCHF

EURCHF rebounded from the disappointing selloff, keeping bulls in business for now... though momentum could use a close to a new high above 1.1725 to suggest we are mounting a campaign on 1.2000 in the coming weeks. 

It would be more compelling if we break the rather shallow sloping uptrend as well for a trend acceleration, though let's take one thing at a time.

eurchf
Source: Saxo Bank  


— Edited by Michael McKenna

John J Hardy is head of FX strategy at Saxo Bank

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FX Board for Thursday, November 30, 2017

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