Video

#SaxoStrats
President Trump looks likely to score a rare legislative victory this week as it looks increasingly likely his tax reform package will finally fall into place. Victory of another sort is expected in South Africa where the reformist Cyril Ramaphosa is leading the contest for the ANC leadership.
Article / 12 October 2017 at 14:54 GMT

FX Board: Sterling battered but not fully broken — #SaxoStrats

Head of FX Strategy / Saxo Bank
Denmark
  • Capitulation below 1.18 could see EURUSD to cycle lows
  • Weak close could see cable re-test the key 1.30 area
  • EURSEK rallies hard on weak Swedish CPI release
GBPUSD

Sterling is underwater again on the Brexit stalemate, but a push downclose to the 1.3250 level saw buyers emerge. Photo: Shutterstock

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.

Chart: EURUSD

EURUSD teased above the 1.1835 pivot line and 21-day SMA without much volatility after the Federal Open Market Committee minutes late yesterday. The lack of follow-through should perhaps not come as a surprise as we await big news from the US, like the identity of who President Trump will nominate to head the Federal Reserve from next February. 

A capitulation back well below the 1.1800 level could see bears out for at least another tactical go at the lows for the cycle and a bit beyond. In the meantime, we expect the usual uncertainty as long as we are in low volatility and below perhaps 1.2000.

eurusd

Create your own charts with SaxoTraderGO click here to learn more

Source: Saxo Bank 

GBPUSD

Cable saw an ugly follow-through bar lower after today's highs just grazed the old pivot area above 1.3250. If we close on a weak note, the pair could go on to probe the recent lows and the psychologically important 1.3000 area. 

gbpusd
Source: Saxo Bank  

EURSEK

EURSEK rallied hard after a weak September CPI print from Sweden today. The action took the pair back above the 200-day moving average and if we sustain a rally above here (and perhaps above 9.60) we could go on to challenge the 9.75 area eventually as a weakening CPI is likely seen as providing insufficient evidence for the Riksbank to shift its very accommodative stance.

eursek
Source: Saxo Bank  

NOKSEK

NOKSEK is an interesting one after the weak Swedish print as both EURNOK dropped and EURSEK rallied hard. The pair has been in a channel for an eternity, but a break higher could raise interesting in a bigger theme developing.

noksek
Source: Saxo Bank 

— Edited by Michael McKenna

John J Hardy is head of FX strategy at Saxo Bank 
Download document

FX Board for Thursday, October 12, 2017

Relevant articles for you

Disclaimer

The Saxo Bank Group entities each provide execution-only service and access to Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com 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 Tradingfloor.com or as a result of the use of the Tradingfloor.com. 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 Tradingfloor.com your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. Tradingfloor.com 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