Global Recession Fears & Continued Demand For CHF and JPY
Created 08/12/2019 at 10:00AM
FX Strategy 12 Aug 19
JPY and GBP are the top G10 FX gainers today, up 0.38% and 0.23% vs the dollar while NOK and SEK are the top losers, down -0.61% and -0.48% vs the dollar. The yen was trading firm on Monday, reaching a year and a half high versus the U.S. Dollar on concerns that a trade war between the United States of America and China could lead to a global recession. On Friday, U.S. President Donald Trump said that there will be no trade agreement between the U.S. and China for now; this has raised the demand for safe-haven currencies. We see continued demand for CHF and JPY amid uncertain trade environment. In the Asian equities space, Hang Seng closed -0.44% at 25824.72 and Kospi ended 0.23% at 1942.29. The European equities were trading mixed with the FTSE -0.14% at 7243.64, DAX 0.23% at 11720.94, and CAC 0.07% at 5331.5. In the rates market, global yields were trading weaker; the US 10-year yield was trading at 1.6864% and the Bund 10-year yield trading at -0.588%. In the energy space, the Brent (front month) is trading down (-0.84%) for the day at $58.04.
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Daily Pivots for Key Currency Pairs
10-year Yields Chart (6-month)
USD-Index Daily Chart (6-month)
Brent Front Month Daily Chart (6-month)
Trade Weighted Basket Hourly (two-week)
Major Currency Pairs
EURUSD Chart (Two-week)
Strategy: Resistance at 1.1200 for 1.1110
GBPUSD Chart (Two-week)
Strategy: Resistance at 1.2112 for 1.1952Short-term view:__ GBP/USD resistance at 1.2112, momentum is still bearish and we see a dip to 1.2000, likely 1.1952. Above 1.2112 to open 1.2190.
USDJPY Chart (Two-week)
Strategy: Resistance at 105.81 for 104.29
AUDUSD Chart (Two-week)
Strategy: Resistance at 0.6800 for 0.6725