Video

Kim Cramer Larsson
Areas covered in this webinar by Saxo Bank technical analyst Kim Cramer Larsson include EURUSD, USDJPY, GBPUSD, EURGBP, gold, silver, S&P 500, the Nasdaq, the Dax, the FTSE and the Dow Jones.
Article / 15 December 2015 at 15:16 GMT

FX Board: USD trying to make a stand ahead of FOMC

Head of FX Strategy / Saxo Bank
Denmark
By John J Hardy

Key developments in FX today:

  • The USD bounced back in connection with risk appetite today, as the early break higher in EURUSD to new local highs was turned back, USDCHF survived a test of the critical 0.9800 level, and USDJPY bounced from the local lows as well. Interesting also to note the false break today in NZDUSD.

  • Riding the coattails of the greenback's general strength today was the pound sterling, which actually marginally outperformed the greenback, and as EURGBP posted a compelling bearish reversal that took place around a key Fibonacci (see the chart below).
From here, the USD needs to post a strong resurgence in the wake of tomorrow's Federal Open Market Committee meeting to get back on the rally track versus the rest of the major currencies after testing key support levels in recent days in several USD pairs. 

Charts:

EURUSD
EURUSD tested to local highs early today, but that attempt was roundly rejected and a solid 2.0% year-on-year November CPI print perhaps eased anticipation of Fed dovishness at tomorrow's FOMC meeting. Another self-reinforcing support for the USD is the bounce back in risk appetite measures, as it allows the Yellen Fed to take fewer pains to tiptoe around its first rate hike in over nine years. Looking further ahead, the next key support EURUSD needs to take out is 1.0800 and then the 61.8% Fibo of this latest short squeeze around 1.0730.
EURUSD
 Source: Saxo Bank. Create your own charts with SaxoTrader click here to learn more

EURGBP
We saw a recent rejection of the modest bearish reversal recently, and now we have what looks like an attempt at a larger bearish reversal that was launched from the key 61.8% Fibo retracement at 0.7300. This is a more compelling setup for the bears, but one that likely requires a continued recovery in risk appetite and solid UK earnings/employment numbers tomorrow to punch through the recent support line that developed around 0.7200 and the 200-day moving average. EURGBP likely to correlate with EURUSD unless the market singles out GBP in the wake of tomorrow's UK data.
EURGBP
 Source: Saxo Bank

NZDUSD
The kiwi surge may finally be easing here – at least as evidenced by NZDUSD's rejection o the attempt to new highs, though we'll need to see whether tomorrow's FOMC meeting supports the greenback tomorrow. A lower close back deep into the range tomorrow kicks the bearish case into higher gear again. 
NZDUSD
  Source: Saxo Bank

EURSEK
EURSEK reversed hard on today's Riksbank meeting, which suggests the Riksbank will remain in a neutral stance for now, even as it talks up its potential to act if conditions warrant. The bearish pattern reversal could set up a fresh challenge of the sub-9.20 supports, provided we stay below the 9.30/32 zone.
EURSEK
  Source: Saxo Bank

– Edited by Clare MacCarthy

 

John J Hardy is head of FX strategy at Saxo Bank

Download document

FX Board for Tuesday, December 15, 2015

3y
tradingwithapro tradingwithapro
This comment has been redacted
3y
Shazi Shazi
Usd index long euro usd short i think i am right

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

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