Article / 23 May 2016 at 14:19 GMT

FX Board: USD pushing hard against risky currencies

Head of FX Strategy / Saxo Bank
By John J Hardy

Key FX developments today:

  •  JPY strongest currency on the day after G7 developments (and non-developments) has USDJPY teasing important tactical support area, even as USD very strong elsewhere.

  • Commodity currencies uniformly weak against the surging US dollar and JPY today, with EM currencies even more so.

  • Weaker gold price threatening important flat-line/Fibo retracement area that could lead to larger capitulation to at  least range lows if current market environment extends.


EURUSD continues to trade heavily and may focus on the 200-day moving average next if the local lows give way. There are few US data catalysts of note this week, so it will be interesting to see the degree that USD bulls continue to bid up the greenback ahead of next week's key data points. Resistance comes in at 1.1250 after today's action.
Source: SaxoTraderGO

USDJPY failed to pull into the Ichimoku cloud, the key resistance of note, while bulls contend with the tactical risk of reversal back into the lower range if the pair can't maintain itself above the 109.25/50 pivot area. But it won't take much of a rally from here to set the focus back higher quickly.
Source: SaxoTraderGO

EURJPY jerked lower on the day - interesting to see here whether we have a strong USD and strong JPY against all other major currencies environment here or whether the JPY's outsized gain on the day was simply unwinding of anticipation of something happening over the G-7 summit that didn't. In any case, the sub 122.00 lows are the focus on further progression lower here.
Source: SaxoTraderGO

The consolidation so far here has been quite shallow and the 200-day moving average provided resistance on the day. The final two notable objectives for bears are the 0.7000 level and then the cycle lows down toward 0.6830. Tactically, if we squeeze back higher and today's highs don't hold in coming sessions, we may risk a squeeze toward 0.7400, but the focus is structurally lower for this chart for now.
 Source: SaxoTraderGO

Gold looks in trouble for a test of the range lows toward 1208 if the 61.8% FIbo and recent 1244 area low gives way here.
Source: SaxoTraderGO

– Edited by Clare MacCarthy


John J Hardy is head of FX strategy at Saxo Bank

Download document

FX Board for Monday, May 23, 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

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