Low FX Volatility & PM Johnson Meets Merkel
Created 08/22/2019 at 09:11AM
FX Strategy 22 Aug 19
SEK and NOK are the top G10 FX gainers today, up 0.39% and 0.26% vs the dollar while JPY and GBP are the top losers, down -0.3% and -0.15% vs the dollar.
The forex volatility is down ahead of the meeting of central bankers at the Jackson Hole Symposium on Friday. The holiday season is also aiding the lack of volatility. That said, the trade wars worries will continue to impact the forex market with the devaluation of yuan a big concern.
Elsewhere, sterling remains in focus as PM Boris Johnson heads to Berlin to meet Chancellor Merkel for talks over Brexit. The pound has got some support after Merkel improved chances of pragmatic solutions on the Irish-Backstop. Due to the heavy short-position in GBPUSD, any positive news can cause sharp upside in the pound.
In the Asian equities space, the Nikkei 225 closed -0.28% lower at 20,618.57, Hang Seng closed 0.15% at 26270.04 and Kospi ended 0.22% at 1964.65. The European equities were trading firm with the FTSE up +0.73% at 7176.75, DAX up +0.77% at 11741.17, and CAC up +1.13% at 5405.13. In the rates market, global yields were trading firmer; the US 10-year yield was trading at 1.6029% and the Bund 10-year yield trading at -0.654%. In the energy space, the Brent (front month) is trading up (0.6%) for the day at $60.39.
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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: Support at 1.1062 for 1.1167
GBPUSD Chart (Two-week)
Strategy: Resistance at 1.2190 for 1.2046
USDJPY Chart (Two-week)
Strategy: Resistance at 106.65 for 105.03
AUDUSD Chart (Two-week)
Strategy: Resistance at 0.6800 for 0.6725