MAJORS FX: The dollar index violated a medium-term important “B-wave high” at 81.44 and this points closer to prior tops at ~89, but the bullish move wasn’t sustained and the low monthly close somewhat dilutes a bullish stance. Similarly the 1st attempt below a key “Neckline” in the ECB euro index was rejected, but the broader outlook remains bearish for at least ~90 – while holding under 108.50. EUR/USD broke below the key 1.2860 ref which in it self points towards ~1.21/1.16 (ideally below 1.1876), but the pair was refused a bearish looking monthly close and a short-term extension towards 1.34\35 is a possibility before turning lower. The pound index remains high inside a larger triangle (but should at some point break below it). In cable it looks wise to look for an “e-wave high” after which a pronounced move lower should materialize and in EUR/GBP 0.8070 may be seen before turning higher again. The yen index remains in its “ending diagonal” together with both USD/JPY & EUR/JPY. At some point this move will be completed and a larger reaction likely to unfold – but timing here is everything (and not likely as long as US yields are falling). EUR/CHF is still floored by the SNB and as long as they show commitment, a 1.20\1.25 range is likely and there after and extension towards 1.29.
COMMODITY FX: AUD/USD is on the fore and over 1.0750 would unlock 1.1080 (possibly 1.1470) but overhead resistance is notable. NZD/USD had a good run last month and as long as holding over 0.80 there is a short-term upside tilt. USD/CAD holds above the yearly average and as long as it does, the outlook is tilted towards another attempt at resistance around 1.0660\1.0850.
NORDIC FX: Swedish TCW & Norwegian NOI44 are both still stuck in ranges, but not without chances to break them and if so with a slight skew to the upside (weaker scandies) then primarily carried by USD/xxx moving higher – with focus on 7.0730 & 6.2360. EUR/SEK & EUR/NOK look less convincing, but recent downside “failures” point up rather than down.
EMERGING FX: European EMs; like HUF, PLN, RUB & TRY have all strengthened more than thought a month ago, but important support levels in USD/EMs are thought soon to have impact and slow/curb short-term EM strength. EUR/TRY is the one cross here actually pointing further south after last month confirming supply at the high end of a larger diagonal. USD/ZAR, USD/BRL & USD/MXN have all aggressively corrected lower but also here important support levels below are thought to balance current short-term supply overhang. USD/INR still looks bullish while USD/CNY (NDF) could eke out a fresh low. USD/KRW is somewhere in between. EUR/SGD is still falling and thought to extend this move.
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SEB tech team