Saxo Team of Analysts - HK
Saxo Capital Market HK Ltd
Today's key FX developments:
This was not a particularly manic Monday, as trading was rather muted, though the USD rally is showing a bit of staying power and EURUSD dipped to new local lows ahead of this week's key event, the Thursday ECB meeting. The USD rally needs to blossom further to wake the USD bulls from their slumber, as ranges have had a vice grip on most USD pairs for a long time now.
The euro was broadly weaker, with EURGBP settling lower and a EURJPY rally pushed back lower later in the day.
AUDUSD rejected a fresh rally attempt ahead of tonight's RBA minutes, keeping the focus on the 0.7200 area support for a possible break and follow through if the greenback is able to get something going this week.
EURGBP
EURGBP managed to work its way through the first support at 0.7350 after the big bearish candlestick reversal for last week, but a bigger acceleration back into the heart of the old range toward 0.7000 will likely need a strong policy hint from the ECB this week. The next focus is probably more on 0.7200 than the 200- day moving average, which hasn't been respected even intraday in recent months.
AUDUSD
A minor bearish rejection today after the attempt to work back toward resistance (most likely on the Chinese data releases) in AUDUSD sets up a possible test of the 0.7200 area support if the RBA minutes are not AUD-supportive overnight.
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