The pronounced surge in crude oil prices surrounding President Trump's decision to pull out of the Iranian nuclear deal is softening as the US rig count rises, while USD is easing its charge versus EM and commodity dollars.
Article / 02 March 2012 at 16:09 GMT

G10 FX Charts – USD comeback?

Head of FX Strategy / Saxo Bank

The USD may be honing in on an interesting weekly close today, but how do the G-10 currencies look in the bigger picture? Let’s have a look at our G10 mega charts to reveal the bigger picture.

(follow me on Twitter: @johnjhardy)

Now that we’re past the last/first day of the month circus and now that we’re past the ECB LTRO/Bernanke testimony, the market may be showing that the “hooray for liquidity” rally has played itself out for now as we don’t really have sufficiently imminent prospects for easing on the horizon.

Using our “QE as morphine” paradigm, it may be time for a cycle of withdrawal now that the highs from the previous liquidity fixes are fading. Too boot, we had a couple of disturbingly bad data points out of the US this week (Jan. durable goods orders and Feb. ISM) that may be a harbinger of momentum coming out of the US economy, something that may be happening anyway from higher energy prices. As well, we have geopolitical risks that have largely been ignored, as our Chief Economist Steen Jakobsen adresses in his piece discussing the market’s recent momentum and whether it’s sustainable.

As well, we’ve seen a handful of interesting technical developments today in USD crosses that will confirm the tentative USD rally if the greenback manages a strong close for the week after today’s US session. The USD pairs have been a bit choppy and inconsistent of late, but if we stay below 1.5900 in GBPUSD, 1.3300/25 and AUDUSD keeps its closes well below 1.0825, there may be room for a further USD comeback. Stay tuned.

In the meantime, let’s look at the bigger picture with a look at our longer term G10 charts that show the G10 currencies vs. evenly weighted baskets of the rest of their G10 peers.

(Note: data source for all charts is Bloomberg with indexing to 100 from 2500 trading days before the present)

Be sure to click on the charts below for a nice expanded view!

The EURUSD rally was delivered a knockout punch as EURUSD slipped below the 1.3300/25 area today, and GBPUSD is back below 1.5900. In the bigger picture, the greenback has merely reversed the latest smidge of downside, but its comeback materialized right at the 200-day moving average.USD

Back to the weak side after a chunky rally, though I wouldn’t expect the single currency to fare the worst if risk appetite sours dramatically. (As some look on it as a carry trade funding currency, with somewhat negative correlation to risk conditions if any panic develops).EUR

The big mover of late – will remain nervous on high oil prices, though one has to wonder in a negative risk appetite scenario whether the battered yen could get some support for a while. JPY

Someone wake us up when something happens…interesting that the 200-day moving average is in play against the USD and EURGBP has seen a huge reversal.GBP

Has shown no real independence from the Euro lately. It’s a waiting game with the SNB, who will likely move just when everyone is convinced they will wait forever.CHF

Has eased off the rally in many places lately, though it is still incredibly elevated. The RBA is up next week – market not looking for a cut. As a derivative of China, AUD would be very heavily affected by geopolitical risks stemming from the Persian Gulf, because 85% of Persian Gulf crude heads to Asia and Australia is widely considered a commodity satellite of China.AUD

Finally on the move as the most undervalued of commodity currencies has woken up from its slumber on the huge move in oil prices. There is likely more upside here against the Antipodeans (AUD, NZD) in weeks and months to come, particularly if geopolitical risks are further aggravated.CAD

The kiwi is at the top of its longer term range, a result of the risk-on environment and celebration of global money printing. Note the interesting weekly candlestick for NZDUSD (if it closes where it is trading as of this writing below 0.8350,NZD

The SEK rally has come undone, largely because the currency is closely linked to the Euro’s fate and as we have seen a couple of weak data points from Sweden. As well, the clock is ticking on the country’s housing bubble. SEK

NOK has finally started to shine a bit more as a safe haven as it should. There may be more upside to come, even if the rally has become overdone in the short term.NOK

vic_elc vic_elc
i'd like to see a USD weekly close above 70 level , it will confirm breaking the down trend line from 2009, and i think this time it will be a very strong comeback, not a normal market correction, with weak JPY , EUR and signs of gold weakness it feels that there something big gonna happen.

thanks you sir for sharing your view


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