Title - Sterling Down on Saunders Remarks, USD bullish, Here's Why

Created 09/27/2019 at 09:03AM


AUD and CHF are the top G10 FX gainers today, up 0.18% and 0.08% vs the dollar while GBP and NZD are the top losers, down -0.27% and -0.11% vs the dollar. Euro hit two years low as demand for the greenback at the end of the third-quarter remained high. The global economic outlook still remains weak amid uncertainty over trade tariffs. Another big loser was Sterling falling further after BoE policymaker Saunders hinted at a rate cut. He said that if Brexit uncertainty continues than further monetary easing is required. That said, any news about avoiding no-deal is likely to be beneficial to the pound as downside risk is largely priced in.

 

In the Asian equities space, the Nikkei 225 closed -0.77% lower at 21,878.90, Hang Seng closed -0.33% at 25954.81 and Kospi ended -1.19% at 2049.93. The European equities were trading firm with the FTSE up +0.91% at 7417.98, DAX up +0.55% at 12356.51, and CAC up +0.29% at 5636.86.

 

In the rates market, global yields were trading firmer; the US 10-year yield was trading at 1.7043% and the Bund 10-year yield trading at -0.578%. In the energy space, the Brent (front month) is trading down (-0.21%) for the day at $62.61.

 

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Major Currency Pairs

 

EURUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.0965 for 1.0840
Short-term view: EUR/USD resistance at 1.0965, MACD and RSI are weakening. Hence, we see a move to 1.0840. Above 1.0965 to open 1.1025.

 

GBPUSD Chart (Two-week)

 
 

Strategy: Resistance at 1.2339 for 1.2265
Short-term view: GBP/USD resistance at 1.2339, MACD and RSI are weakening. We see risk of a dip to 1.2265, likely 1.2219. Above 1.2339 to open 1.2381.

 

USDJPY Chart (Two-week)

 
 

Strategy: Resistance at 108.01 for 107.48
Short-term view: USD/JPY has resistance around 108.01, MACD and RSI are mixed. Hence, we see a move lower to 107.48, likely 107.05. Above 108.01 opens 108.43.

 

AUDUSD Chart (Two-week)

 
 

Strategy: Resistance at 0.6800 for 0.6725
Short-term view: AUD/USD MACD and RSI are weakening, resistance at 0.6800 for a move lower towards 0.6725, likely 0.6650. Above 0.6800 we look for 0.6830.