The PBoC came out with a surprise round of stimulus late Tuesday, lending $31 billion to financial institutions. According to Saxo bank fixed income specialist Althea Spinozzi, the Chinese central bank said that it will back the Chinese economy via whatever tools it deems necessary as the Sino-US trade war deepens.
Article / 04 October 2016 at 14:25 GMT

FX Board: USD breaking out all over - is it for real?

Head of FX Strategy / Saxo Bank
By John Hardy

Key developments in FX today 
  • Today has been all about the US dollar's relatively broad strength, versus the major European currencies and Japanese yen in particular, while the hold out commodity dollars have refused to yield much ground thus far. The breaching of key technical levels should inject some much needed energy into activity in coming sessions as the move must either thrive further or fail.
  • On the attached FX Board, note all fo the crosses of major USD pairs to new USD positive trends and look for a hold of today's moves to confirm.

EURUSD pressing hard on the 200-day moving average that has supported for some weeks now - with the pair so bottled up in the range for so long, a break lower could develop considerable energy - the next focus lower still be the 1.1000 area and the nominal lows from the post Brexit weeks just below there.

With the JPY losing considerable air today and yields generally a bit higher recently while the market has brushed aside Deutsche Bank systemic fears, it looks like the market is jumping at the chance to get short of a negative yielder like the Swiss franc, which was sharply lower again versus both the EUR, and of course the USD today. This has been one of the most bottled up pairs in chart history and could likewise (as with EURUSD ) develop considerable energy on a notable break of the next layers of resistance - locally 0.9900/50, but especially parity in the bigger picture.
The descending trend-line has given way and the action today took the pair into the daily Ichimoku cloud, with the top of that cloud at 103.25, a break of which could lead to a spurt higher as we establish a range toward 105.00-107.50 on a stronger USD.
New modern era lows below 1.2800 today for GBPUSD, with round figures clearly the theme on these breaks as 1.2750 saw a bit of magnetism intraday. The next level lower is perhaps 1.2500 and the 1.2800 prior support is the nominal resistance.
Gold likewise suffering on the stronger US currency today, and the very important 1310/00 level giving way with a bang today. That zone becomes resistance as the focus shifts lower to the 200-day moving average rising quickly, a 61.8% Fibo (of move from 1200 low to <1400 high not shown here) near 1267 and then the 1250 level - a pivotal round number and the 38.2% retracement of the entire rally off the 1050 area lows.

— Edited by Clemens Bomsdorf

John J Hardy is head of FX strategy at Saxo Bank


Download document

FX Board for Tuesday, October 4, 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