We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
EUR/USD
Mixed
GBP/USD
Bearish
USD/JPY
Bearish
Gold
Bullish
Low
High
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
Bearish
Bitcoin
Bearish
More View more
Real Time News
  • The Australian Dollar and New Zealand Dollar tend to rise with stocks. They have recently fallen despite gains in the #SP500. What does this mean for $AUDUSD and $NZDUSD ahead? #AUD #NZD #RBA #RBNZ - https://www.dailyfx.com/forex/fundamental/article/special_report/2020/01/17/AUDUSD-NZDUSD-Outlook-Looks-Past-Stocks-to-Rate-Cut-Bets.html?CHID=9&QPID=917702 https://t.co/ddf2fV7Kyl
  • A few snippets from today's commentary. Check out the link below for the full story (via @DailyFX). https://t.co/I31tuq764r https://t.co/x0BaiOFA1P
  • Have you joined @DailyFX @facebook group yet? Discuss your #forex strategies and brush up on your skills with us here: https://t.co/jtY1G7g8yx https://t.co/e2YrN3dBrl
  • IG Client Sentiment Update: Our data shows the vast majority of traders in Ripple are long at 98.00%, while traders in France 40 are at opposite extremes with 79.59%. See the summary chart below and full details and charts on DailyFX: https://www.dailyfx.com/sentiment https://t.co/UL7hqSD2Ki
  • US Dollar Forecast: $USD Lacking Impetus Ahead of Consumer Sentiment #Forex traders shift focus away from US-China trade deal headlines - perhaps toward the monthly release of #ConsumerSentiment data for volatility and clues on the Greenback's next move https://www.dailyfx.com/forex/fundamental/us_dollar_index/usd_trading_today/2020/01/16/us-dollar-forecast-usd-lacking-impetus-ahead-of-consumer-sentiment.html
  • Forex Update: As of 05:00, these are your best and worst performers based on the London trading schedule: 🇳🇿NZD: 0.11% 🇦🇺AUD: -0.02% 🇯🇵JPY: -0.03% 🇨🇭CHF: -0.05% 🇬🇧GBP: -0.06% 🇨🇦CAD: -0.07% View the performance of all markets via https://www.dailyfx.com/forex-rates#currencies https://t.co/Kxcb9EtIWb
  • Indices Update: As of 05:00, these are your best and worst performers based on the London trading schedule: Germany 30: 0.45% France 40: 0.26% Wall Street: 0.07% US 500: 0.00% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/I5YIsKQAog
  • 🇯🇵 JPY Tertiary Industry Index (MoM) (NOV), Actual: 1.3% Expected: 1.0% Previous: -5.2% https://www.dailyfx.com/economic-calendar#2020-01-17
  • The $JPY has weakened as a bounce-back in risk appetite saps haven-asset demand. However, the old uptrend line still provides clear resistance. Get your market update from @DavidCottleFX HERE:https://t.co/IMhgQ9jbF9 https://t.co/I7087olftk
  • Heads Up:🇯🇵 JPY Tertiary Industry Index (MoM) (NOV) due at 04:30 GMT (15min), Actual: N/A Expected: 1.0% Previous: -4.6% https://www.dailyfx.com/economic-calendar#2020-01-17
Risk Off Trade Builds Momentum in European Session

Risk Off Trade Builds Momentum in European Session

2012-03-06 12:07:00
Joel Kruger, Technical Strategist
Share:
  • Downbeat China and more dovish RBA initially weigh on sentiment
  • Global equities start to show signs of topping
  • Greek PSI rumors denied but Euro still under pressure
  • Yen also finding renewed bids following intense multi-day selling
  • Check out our roundup of global equity markets

Some downbeat news out of China relating to growth forecasts and a somewhat more dovish than expected RBA proved to be the initial catalysts for some risk off trade which dominated the European session. Global equities took a hit and longer-term accounts took the opportunity to exit some higher yielding FX positions as reflected by the pullbacks and relative underperformance in the commodity bloc. The Euro did however manage to play catch-up (or catch-down for the matter) with the single currency accelerating to the downside after triggering major stops below 1.3160. Rumors of a delayed Greek PSI deadline were attributed to the aggressive Euro selling and although these rumors were later denied, the bearish momentum could not be slowed. A doom and gloom article in the Telegraph calling for eventual Greece exit followed by Portugal is not helping risk sentiment.

Relative performance versus the USD Tuesday (as of 11:50GMT)

  1. JPY +0.58%
  2. CAD -0.45%
  3. GBP -0.58%
  4. EUR -0.59%
  5. CHF -0.60%
  6. NZD -0.71%
  7. AUD -0.73%

Elsewhere, USDJPY and the Yen crosses were also big movers on the day, with the oversold technical readings in the Yen finally unwinding to open a sizeable retreat in these markets. Overall, the risk off sentiment looks like it just might be enough to finally break a multi-day consolidation in the global equities markets which suggests more fear and uncertainty over the coming days. Of course, there is still a good deal of event risk this week, and traders will be sure not to get to ahead of themselves, with the RBNZ, BOE, ECB and US NFPs all still to come in the latter half of the week.

TECHNICAL OUTLOOK

Risk_Off_Trade_Builds_Momentum_in_European_Session_body_eur.png, Risk Off Trade Builds Momentum in European Session

EUR/USD: The latest failure ahead of 1.3500 and subsequent break back below 1.3350 could now warn that a lower top is finally in place ahead of the next major downside extension below the 2012 lows by 1.2620. However, there is some short-term rising trend-line support off of the 2012 lows by 1.3150 which will need to be convincingly broken before we can really get behind the idea of a full on downside acceleration. Inability to establish below 1.3150 will keep bulls in the picture and could still warn of additional corrective gains in 2012. Back above 1.3320 will also compromise bearish outlook. Look for clarity with Tuesday’s daily close to see if the market will end up below 1.3150 or above.

Risk_Off_Trade_Builds_Momentum_in_European_Session_body_jpy2.png, Risk Off Trade Builds Momentum in European Session

USD/JPY:The market is doing a good job of showing the potential for the formation of a major cyclical bottom after taking out the 200-Day SMA and now clearing psychological barriers by 80.00 for the first time in 6 months. This further solidifies basing prospects and we could be in the process of seeing a major bullish structural shift that exposes a move towards 85.00-90.00 over the coming months. At this point, only back under 77.00 would delay outlook and give reason for concern. However, in the interim, it is worth noting that gains beyond the recent highs at 81.85 over the coming sessions could prove hard to come by with technical studies needing to unwind from their most overbought levels in over 10 years before a bullish continuation. As such, we would caution buying breaks above 81.70 for the time being and instead recommend looking for opportunities to buy on dips into the 78.00-80.00 area.

Risk_Off_Trade_Builds_Momentum_in_European_Session_body_gbp2.png, Risk Off Trade Builds Momentum in European Session

GBP/USD: Inability to establish above the 200-day SMA once again keeps the multi-day range intact, and from here we would look for a bearish resumption back down towards the 1.5650 area over the coming sessions. Look for a sustained break below 1.5800 to confirm outlook, while only a daily close back above 1.5950 gives reason for concern.

Risk_Off_Trade_Builds_Momentum_in_European_Session_body_swiss1.png, Risk Off Trade Builds Momentum in European Session

USD/CHF: Setbacks have stalled for now just ahead of 0.8900 and the market could finally be looking to carve the next medium-term higher low ahead of a bullish resumption and eventual break back above 0.9660. Look for additional gains over the coming sessions back towards 0.9300, with a break above to confirm and accelerate. Ultimately, only a drop below 0.8930 negates and gives reason for pause.

--- Written by Joel Kruger, Technical Currency Strategist

To contact Joel Kruger, email jskruger@dailyfx.com. Follow me on Twitter @JoelKruger

To be added to Joel Kruger’s distribution list, send an email with subject line “Distribution List” to jskruger@dailyfx.com

Check out Market Vibrations: News and commentary

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.

DISCLOSURES

News & Analysis at your fingertips.