FX Strategy 09 May 18  

JPY and AUD are the top G10 losers, down -0.61% and -0.23% (vs USD), respectively. SEK is the top gainer followed by USD and CAD at the number two. USD is firming amid Iran uncertainity while EUR hit fresh 2018 lows. In the equities space, Nikkei 225 closed lower by -0.44% at 22408 while Hang Seng closed higher by +0.44% at 30536. The European equities are trading firm for the day with FTSE up +0.44%, DAX up +0.12%, and CAC up +0.05% so far. In the rates market, the US, UK and Bund 10-year yields have once again started to strengthen with the Bund 10-year yield at 0.59%, UK 10-year at 1.48% and the US 10-year yield at 3.01%. In the energy space, the Brent front month continues to rally, trading at a high of $77.09 today, following Trump announcement to pull out of the Iran deal. Elsewhere, Saudis hinted of raising oil output after the US move. In terms of European data today, Norway’s CPI came in at 2.4% compared to 2.3% expected: rising oil prices and expectations of a Norges bank rate hike after summer should keep NOK longs interested. Elsewhere, Swedish CPI came in line with expectations; this is unlikely to move the needle for Riksbank. Looking ahead, US PPI data at 1230GMT and Bostic speech at 1715 GMT are only two events of any interest from the US. We will also have the RBNZ rates decision at 2100 GMT: not much change is expected on the policy front but this will be the first meeting for the new Governor Orr. Also, this is the first meeting after RBNZ mandate was changed.

 

10-year Yields Daily chart (6-month)

 

 

USD-Index Daily chart (6-month)

 

 

Brent Front month Daily chart (2-month)

 

 

Trade weighted basket Hourly (one-week)

 

 

Major Currency Pairs

 

EURUSD Chart (Two-week)

 

 

Strategy: Resistance at 1.1900 for 1.1765
Short-term view: EUR/USD remains in a short-term downtrend (at 1.1900) and a break above is needed to raise chances of a further rise to 1.1943. While below the downtrend we see a deeper dip to 1.1765.

 

GBPUSD Chart (Two-week)

 

 

Strategy: Support at 1.3493 for 1.3600
Short-term view: GBP/USD has broken the downtrend and MACD is looking to turn up from just under the zero line. Hence, we see a further upside to 1.3580-1.3600, possibly 1.3665. Below 1.3493 to open 1.3459. .

 

USDJPY Chart (Two-week)

 

 

Strategy: Support at 109.39 for 110.03
Short-term view: USD/JPY has support at 109.39 and MACD has inched above the zero line. Hence, we see a rise to 110.03. A break below 109.39 to open 108.91.

 

AUDUSD Chart (Two-week)

 

 

Strategy: Resistance at 0.7474 for .7390
Short-term view: AUD/USD continues to weaken and moving averages continue to signal a bearish bias. Hence, we expect a dip to .7390. Above .7474 to open .7501

 

BTCUSD 4-Hour Chart (One-Month)

 

 

(Chart by Reuters)

 

Strategy: Resistance at $9469 for $8644
Short-term view: BTC/USD resistance exist at 9469 and MACD istrending in the negative territory. Hence, we see a dip to 8644. Above 9469 to open towards 9778

 



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