Risk sentiment is this week's focus following the US/British/French attack on Syria, with the USDJPY's tentative breakout beginning to falter as prices head into the Ichimoku Cloud.
Article / 25 May 2016 at 14:08 GMT

FX Board: Risk appetite rallies, shifting market's focus

Head of FX Strategy / Saxo Bank
  • Sterling shines as Brexit fears recede
  • Pound gains most evident in GBPJPY
  • USDJPY charts reveal bullish signals

New poll results show that more Britons are unwilling 
to see Europe end at the Channel. Photo: iStock

By John J Hardy

Key developments in FX today

  • The greenback was more mixed in today's trading as the focus was on a large shift in general market risk sentiment. The only currency able to sustain a notable rally against the greenback, however, was the still-rebounding pound, where a fresh UK poll signalled strong support for the "Remain" faction of the Brexit debate.
  • USDJPY has made a partial break of to the upside, so the next session or two is critical for establishing the market regime and where USD strength will manifest most convincingly. Further improvement in risk sentiment would suggest that USD strength should pick up most where the carry implications are strongest, i.e., against the very low- and negative-yielding/QE currencies like JPY, EUR and CHF. See the attached note for more on this.
  • Also note that silver is struggling in a key support zone that the bulls will want to remain intact if we're not to fully give up on the silver rally. Gold has more room for further consolidation without yet indicating a full trend reversal.


USDJPY poked back into the Ichimoku cloud today, a bullish development if it holds into the close. 

The top of the cloud is soon rapidly descending to current levels, so from here it will be more about whether the pair can pull all the way back to 112.00 to full reverse the prior selloff wave and then bull higher into the old range to 114.00-plus.


Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 


Sterling's impressive comeback has been felt especially forcefully in GBPJPY as the yen has headed suddenly south on the resurgent risk sentiment. Note that key technical levels have come back into focus to the upside here - with an upside-down head and shoulders neckline arguably in play today (the yellow line) and note the break above the Ichimoku cloud.

Source: Saxo Bank 

— Edited by Michael McKenna

John J Hardy is head of FX strategy at Saxo Bank

Download document

FX Board for Wednesday, May 25, 2016


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail