JPY and CHF are the top G10 gainers, up +0.71% and +0.04% (vs USD) while SEK and NOK are the top losers, down -1.36% and -1.17% (vs USD). Italian fears are back and we are seeing financial markets trading in a panic mode; the Bank of Italy Governor Visco has warned that Italy is only ‘a few short steps away’ from losing credibility if it does not straighten its act. This has led to a sharp spike in BTP-Bund Spread which stands at 298bps. The Dollar is also aided by a flight to safety with global yields falling sharply. Elsewhere, NAFTA uncertainty also remains high with formal discussion taking place with this week. In the equities space, Nikkei 225 has closed lower by -0.55% at 22,358 and the European equities are down sharply with FTSE down -1.01%, DAX down -1.68%, and CAC down -1.74%. In the rates market, the global yields continue to tumble with US 10-year yield trading at 2.83% and the Bund 10-year yield trading at 0.25%; both the US and German (also global) 10-year yields have fallen sharply today. In the energy space, the Brent front month continues to fall having broken a 2-month long bull channel. The Brent is trading at $75.55 with next support area at $73.13 where a break is likely to accelerate losses towards $70-$71 area. In terms of data today, the Swedish consumer confidence dipped to 98.5 from 100.5. The US CB consumer confidence at 1400 GMT will be the only data point of any note today.
10-year Yields Daily chart (6-month)
USD-Index Daily chart (2-month)
Brent Front month Daily chart (2-month)
Trade weighted basket Hourly (one-week)
Major Currency Pairs
EURUSD Chart (Two-week)
Strategy: Resistance at 1.1611 for 1.1480
Short-term view: EUR/USD continues to weaken with not much support before the 1.1450-1.1500 area. Hence, we may see a continued downside to 1.1513, possibly 1.1480. Above 1.1611 to open 1.1667
GBPUSD Chart (Two-week)
Strategy: Resistance at 1.3315 for 1.3131
Short-term view: GBP/USD downside continues with not much of support before 1.3081. Hence, we see chances of a firther dip to 1.3177-1.3200, potentially 1.3100-1.3131. A break above 1.3315 to open 1.3366.
USDJPY Chart (Two-week)
Strategy: Resistance at 108.91 for 107.89
Short-term view: USD/JPY has resistance at 108.91 and moving averages continues to provide a bearish bias. Hence, we see likelihood of a dip to 107.89. A break above 108.91 to open 109.46
AUDUSD Chart (Two-week)
Strategy: Resistance at 0.7550 for .7494
Short-term view: AUD/USD has completed a small top and MACD is looking to weaken. Hence, we may see a dip to .7474-.7494. Above .7550 to open .7583