Saxo Team of Analysts - HK
Saxo Capital Market HK Ltd
Key developments in FX today:
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The USD was sideways versus the euro and slightly higher against the JPY by later in the day after USDJPY tested the lows for the cycle overnight. A strong rally in commodities and risk appetite generally saw the yen's fortunes waning ahead of the US trading session today. Elsewhere, the strongest currencies were commodity linked currencies and sterling, which enjoyed the upbeat mood on the day.
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Next, we look for whether the very tight EURUSD range is broken to the upside in days to come (or today), or if the risky currency vs. G3 (USD, EUR, and JPY) theme of today's session continues this week (i.e., sideways action among the G3, with risky currencies continuing to press higher. The key US data releases this week are the March Retail Sales data on Wednesday and the March CPI data on Thursday. The USD bulls look hard pressed in the USD/commodity dollar pairs today.
EURUSD - weekly
EURUSD making a bid late today for the upside as 1.1450 is the last local resistance ahead of the obviously important psychological level at 1.1500. The entire zone between 1.1500 and 1.2000 is a effectively a "gap" as we've only traded within that range for a bit more than two weeks over the last
USDCAD
Rather typical of the commodity currencies today and after a strong rally in the oil price, USDCAD is pressing lower and is not far from the recent lows and critical chart area just below 1.2850. though it appears we may have a descending channel on our hands more than a notable break level.
XAGUSD - weekly
Silver has blasted sharply higher here - handily taking out the local resistance and setting its sights on the critical structural level higher: what appears to be an upside down head and shoulders formation with its neckline in the 16.00/25 zone. The textbook target on a break higher would be 100% of the height of the original formation, which puts us right back at the next major resistance level near 18.50.
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