Saxo Team of Analysts - HK
Saxo Capital Market HK Ltd
Key FX Developments today
The market has shrugged off mild attempts at a USD rally after last Friday's US jobs numbers, with USDJPY looking heavy, GBPUSD storming back from Friday's weakness, and EURUSD back above 1.1400 after a polite test of the local support zone again. Whether key USD range supports hold or break, especially for EURUSD and USDJPY, is the focus for the week, while the commodity currencies face a key test around momentum divergence setups and the RBA cash rate announcement tonight in Asia. (see AUDUSD chart below.)
USDJPY
This pair is trading heavily again as neither the USD nor US rates got a boost from Friday's solid jobs report. A test of the range lows looks inevitable here, though every directional move recently has been quickly frustrated, so we may need momentum to pick up in risk aversion to see anything more than a gentle test below the range like the one after the Federal Open Market Committee meeting. A bigger structural area lower if risk aversion does pick up is the 106.50 area.
AUDUSD
We've noted the AUDUSD and USDCAD momentum divergence, though these setups only get more interesting on the follow-through that has so far been lacking. Tonight's Reserve Bank of Australia meeting should be the deciding factor, with weakness possibly testing the 0.7500 area or even the ultimate support line down below 0.7400 eventually. A failure of the downside to get traction amid a broadly weaker USD and complacent RBA could suddenly see us running up to the trend resistance.
- The author(s) and Saxo Capital Markets HK Limited are not responsible for and not liable to any loss arising from any investment based on any recommendation, forecast or any other information contained herein. The contents of this publication should not be construed as an express or implied promise, guarantee or implication by Saxo Capital Markets that clients will profit from the strategies herein or that losses in connection therewith can or will be limited. Trades in accordance with the recommendations in an analysis, especially in leveraged investments such as foreign exchange trading and investment in derivatives, can be very speculative and may result in losses as well as profits, in particular if the conditions mentioned in the analysis do not occur as anticipated. Investors should carefully consider their financial situation and consult their professional advisors as to the suitability of their situation prior to making any investments.
- Risk warning: Leveraged investments in foreign exchange or derivatives carry a high degree of risk and may result in significant gains or losses. You should carefully consider your financial situation and consult your independent financial advisors as to the suitability of your situation prior to making any investments.
Saxo Capital Markets HK Limited holds a Type 1 Regulated Activity (Dealing in securities); Type 2 Regulated Activity (Dealing in Futures Contract) and Type 3 Regulated Activity (Leveraged foreign exchange trading) licenses (CE No. AVD061) issued by the Securities and Futures Commission of Hong Kong.
Recommended Content
Editors’ Picks
AUD/USD eases toward 0.6500 after mixed Australian trade data
AUD/USD is seeing some fresh selling interest in the Asian session on Thursday, following the release of mixed Australian trade data. The pair has stalled its recovery mode, as the US Dollar attempts a bounce after the Fed-led sell-off.
USD/JPY rebounds above 156.00 after probable Japan's intervention-led crash
USD/JPY is staging a solid comeback above 156.00, having lost nearly 450 pips in some minutes after the Japanese Yen rallied hard on another suspected Japan FX market intervention in the late American session on Wednesday.
Gold price stalls rebound below $2,330 as US Dollar recovers
Gold price is holding the rebound below $2,330 in Asian trading on Thursday, as the US Dollar recovers in sync with the USD/JPY pair and the US Treasury bond yields, in the aftermath of the Fed decision and the likely Japanese FX intervention.
Top 3 Price Prediction BTC, ETH, XRP: Altcoins to pump once BTC bottoms out, slow grind up for now
Bitcoin reclaiming above $59,200 would hint that BTC has already bottomed out, setting the tone for a run north. Ethereum holding above $2,900 keeps a bullish reversal pattern viable despite falling momentum. Ripple coils up for a move north as XRP bulls defend $0.5000.
The FOMC whipsaw and more Yen intervention in focus
Market participants clung to every word uttered by Chair Powell as risk assets whipped around in a frenetic fashion during the afternoon US trading session.