Video

John J Hardy
Saxo Bank’s head of FX strategy John Hardy takes a closer look at trends and moves in today’s forex charts, including EURUSD, USDJPY, AUDUSD, and EURSEK.
Article / 14 February 2018 at 15:30 GMT

FX Board: USD may fade badly if risk appetite rallies – #SaxoStrats

Head of FX Strategy / Saxo Bank
Denmark
  • Combination of high inflation and weak consumption rocks markets
  • Nervousness as US yields poke back to the highs of the cycle
  • Risk appetite response is likely the key to currency markets' next move

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.

Charts

USDJPY
This is the most important chart across major FX now that USDJPY has actually executed a break of the lows. If risk appetite crumbles again to new lows, the pressure remains likely to the downside – possibly all the way to 100.00. The only combination that might bring support – at least relative to other USD crosses – could be stable to higher yields together with a stronger return of risk appetite after today's US data was an important test of market sentiment. If risk appetite surges back higher, USDJPY declines may prove more sluggish. The upside pivot zone looks like 107.50.
usdjpy
Source: Saxo Bank 

AUDUSD
The commodity dollars have fared rather poorly in the wake of the US data today – the tactical outlook likely depends on whether risk appetite can stabilise and head back higher. Today's closing levels look critical in that regard and tonight we have Australia jobs numbers. If both risk and the jobs report are weak, we could see a move through the pivotal 0.7750 area Fibonacci retracement and 200-day moving average. A strong NY session today in equities and a reasonably in-line to stronger than expected Australian jobs report, on the other hand, look positive for a go back at the top of the cycle.
audusd
Source: Saxo Bank  

– Edited by Clare MacCarthy

 

John J Hardy is head of FX strategy at Saxo Bank

Download document

FX Board for Wednesday, February 14, 2018

14 February
AlexF AlexF
This comment has been redacted

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