A global bonds selloff has pushed yields up across the board towards post-Brexit highs while the anti-establishment wave sweeping the western world could force a 'No' vote on the Italian referendum in December.
Article / 14 June 2016 at 13:18 GMT

FX Board: USD pushing on resistance ahead of FOMC

Head of FX Strategy / Saxo Bank
By John J Hardy

Key developments in FX Today

The USD was generally firmer, particularly against the hapless sterling (after yesterday's sharp squeeze and dump in sterling pairs) and against the euro, but also finding strength against the commodity dollars and EM currencies.

The chief theme, however, was safe haven seeking in JPY and CHF, with the USD more or less matching the CHF strength but still under the yen's thumb. The risk-off intensity peaked early in the day and it's still a long wait for the UK referendum vote next Thursday. Technical developments in almost any pair may be somewhat dificult to trust until after that event in any case.


EURUSD is down pushing on the key pivot zone in the 1.1200/25 area that was the 61.8% Fibonacci and recent lows. Bears may be reluctant to make a break for it ahead of the Federal Open Market Committee meeting, but a close below this area is a technical break that argues for a push to the 1.1100 area and beyond to the downside, starting with 1.1000 and stretching possibly much lower post-UK referendum in the event of a Brexit.
 Source: Saxo Bank. Create your own charts with SaxoTraderGO click here to learn more

EURJPY has been getting the worst of it as the Brexit fear contagion apperas to be spreading to euro/safe havens as well. The next technical level of note is down toward the 115.40 area, which is the 61.8% retracement of the entire rally from the 2012 lows to last year's highs.
  Source: Saxo Bank

Somewhat typical of most of the USD/commodity currency pairs, the USD has made a comeback, but needs a bit more to set its sights on re-establishing USD dominance. In AUDUSD, the first area of support around 0.7360 gave way today and the focus shifts to recent lows near 0.7150 and beyond if we can punch through the 0.7285 area.
 Source: Saxo Bank 

– Edited by Clare MacCarthy


John J Hardy is head of FX strategy at Saxo Bank

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FX Board for Tuesday, June 14, 2016


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