Category Archive: 4) FX Trends

Main Author Marc Chandler
Marc Chandler
He has been covering the global capital markets in one fashion or another for more than 30 years, working at economic consulting firms and global investment banks. After 14 years as the global head of currency strategy for Brown Brothers Harriman, Chandler joined Bannockburn Global Forex, as a managing partner and chief markets strategist as of October 1, 2018.
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April 2023 Monthly

2023-04-01

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2023-04-01

There were three ways the monetary cycle was going to turn. First, unemployment could have reached unacceptable levels. This did not happen. Labor markets have proven thus far to be resilient among most G10 countries. Second, a significant and sustained drop in price pressures could end the tightening cycle. This has yet to materialize in a meaningful way. In some countries, governments have energy subsidies, and these measures only offer temporary...

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It’s quarter, month and week end. What to expect from some of the major currency pairs.

2023-03-31

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The US PCE came in weaker than expected and the USD is showing some weakness in trading today. In this report, we take a technical look at the EURUSD, USDJPY, GBPUSD and AUDUSD and outline the key levels in play. Stay up to date on the latest price action and potential trading opportunities.

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March: Going Out like A Lamb after Wrestling with a Lion

2023-03-31

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2023-03-31

Overview: The banking stress that roiled the markets this month has eased. However, the emergency lending by the Federal Reserve, vias the discount window and new Bank Term Funding Program hardly slowed in the past week ($152.6 bln vs. $163.9 bln). Money markets took in more funds. Almost $305 bln has flowed to them over the past three weeks. The US KBW bank index is up 3.75% this week coming into day (after pulling back 1.2% yesterday). Europe's...

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Thumbnail Sketch of the Peso Ahead of Banxico’s Decision

2023-03-30

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2023-03-30

The central bank of Mexico is expected to deliver a 25 bp rate hike later today that would lift the overnight cash target to 11.25%. The swaps market says this will be the last hike in the cycle. However, with a further hike by the Fed possible, it seems unlikely that Banxico will declare mission accomplished. Still, Mexico’s overnight rate is above current inflation.  CPI in February was about 7.6% and the core rate (excluding food and energy)...

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Dollar Soft but Stretched

2023-03-30

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2023-03-30

Overview: While bank stress seems to continue to ease, the dollar languishes against most of the major currencies. The Japanese yen is the notable exception. It is off about 1.5% this week. The Dollar Index has given back the gains scored at the end of last week but remains inside the range set last Thursday and Friday (~101.90-102.35). Perhaps the participants are waiting for Friday. In addition to month-, quarter, and fiscal-year ends, it is...

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Financial Stress Continues to Recede

2023-03-29

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2023-03-29

Overview: Financial stress continues to recede. The Topix bank index is up for the second consecutive session and the Stoxx 600 bank index is recovering for the third session. The AT1 ETF is trying to snap a four-day decline. The KBW US bank index rose for the third consecutive session yesterday. More broadly equity markets are rallying. The advance in the Asia Pacific was led by tech companies following Alibaba's re-organization announcement. The...

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Firmer Rates and Higher Bank Stocks Give the Greenback Little Help

2023-03-28

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2023-03-28

Overview: Financial strains eased yesterday, and short-term yields jumped. The two-year US yield jumped 25 bp to pierce 4%. Yet, the dollar fell against most of the major currencies yesterday and is mostly softer today. Banking stress is ebbing. The Topix bank index snapped a three-day decline and jumped nearly 2% today to recoup the lion's share of its three-day decline. The Stoxx 600 index of EMU banks is extending yesterday's 1,7% advance. The...

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Calmer Markets to Start the New Week

2023-03-27

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2023-03-27

Overview: There did not appear to be any negative surprises over the weekend, and this is helping calm investors' nerves at the start of the new week. Deutsche Bank shares have recovered most of the pre-weekend loss in the German market, and Stoxx bank index is posting a gain for the first time in four sessions. The AT1 ETF is slightly softer. In Japan, the Topix bank index slipped around 0.5%, its fourth decline in the past five sessions. Asia...

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The GBPUSD fell to support on Friday, and buyers stepped in. Buyers in control.

2023-03-26

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In this video, we'll take a closer look at the recent movement of the GBPUSD, which fell to support on Friday before buyers stepped in. With the buyers now more in control heading into the new trading week, we'll explore the key levels to watch and potential trading opportunities that could arise. Join us as we provide you with valuable insights and analysis that can help you navigate the Forex market and make informed trading decisions.

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USDJPY: The USDJPY has a small bullish bias heading into the new trading week

2023-03-26

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In this video, we'll analyze the current state of the USDJPY and examine the potential bullish bias heading into the new trading week. Despite the recent move to the downside, the USDJPY is showing some technical signs of strength, and we'll explore the key levels to watch and the potential trading opportunities that could arise. Join us as we provide you with valuable insights and analysis that can help you navigate the Forex market and make...

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A drill down look at the EURUSD

2023-03-26

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In this video, we'll take a drill-down look at the EURUSD and examine the key levels in play from both a short-term and long-term perspective to start the trading week. Whether you're a short-term or long-term trader, we've got you covered with valuable insights and analysis that can help you make informed trading decisions. Join us as we explore the latest trends and provide you with actionable strategies that can help you succeed in the volatile...

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S&P technical analysis: Bulls are holding

2023-03-26

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In this video, we'll examine the current support and resistance levels in the market and discuss the VAL (value area low) price level of 3930. As long as the market doesn't close a day below this level, bulls are holding. We'll then take a closer look at the next targets of 4029 and 4080 and what they could mean for traders. Please note that trading involves risks, and we encourage you to conduct your own analysis and research before making any...

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Where do I start?

2023-03-25

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Last week was eventful, with numerous releases and events, making it difficult to know where to begin. In this video, we'll start from the very beginning and discuss the highlights of the week that was, including the Federal Reserve's actions and how the market reacted. We'll explore the apparent tensions between the Fed and the market and discuss how both may have been performing their roles. Join us as we provide valuable insights into the...

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Banking Crisis Roils Capital Markets, Overshadowing High-Frequency Data

2023-03-25

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2023-03-25

The banking crisis is the newest shock to roil the capital markets. Pragmatic action by central banks, governments, and the private sector has thus far been insufficient to allow investors to be confident that the problem is ring-fenced. Credit Suisse was a pre-existing problem that flared up to the breaking point. The government's offer to take the first CHF9 bln in losses and the controversial triggering of clauses allowing AT1 bondholders to be...

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2023-03-24

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Financial contagion causes more anxiety in the financial markets.

2023-03-24

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The financial contagion has affected Deutsche Bank shares, causing them to drop by 10% during trading. This decline has led to lower movements in other European shares and US financials, prompting investors to seek refuge in safe-haven currencies like the USD and JPY. In this forex technical report, we will analyze the EURUSD, USDJPY, and GBPUSD currency pairs, highlighting the key levels in play for today. Stay up-to-date on the latest market...

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The Dollar Jumps Back

2023-03-24

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2023-03-24

Overview: The pendulum of market expectations has swung dramatically and now looks for 100 bp cut in the Fed funds target this year. That seems extreme. At the same time, the dollar's downside momentum has stalled, suggesting that the dollar may recover some of the ground lost recently as the interest rate leg was knocked out from beneath it. The euro twice in the past two days pushed through $1.09 only to be turned away. Similarly, sterling pushed...

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The Day After. What are the technicals in the EURUSD, USDJPY and GBPUSD saying now?ForexLive Video

2023-03-23

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In this video, we'll be discussing the recent Fed rate hike of 25 basis points and how it has affected the USD. Despite the rate increase, the USD has moved lower. We'll analyze the technical indicators for three major currency pairs, the EURUSD, USDJPY, and GBPUSD, and provide insights into what they're telling us about market sentiment and potential trading opportunities.

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Market Hears Dovish Fed Hike and Sells Dollars

2023-03-23

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2023-03-23

Overview:  The dollar remains under pressure following the Federal Reserve's rate hike. The market thinks it heard that the Fed was done hiking, even though Fed Chair Powell held out the possibility that "some additional firming may be necessary."  The Norwegian krone is the strongest of the G10 currencies today, up more than 1%, spurred by a 25 bp hike and a commitment to do more. The Dollar Index briefly traded below 102.00 for the...

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Tough Fed Decisions

2023-03-22

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2023-03-22

Overview: The market has concluded that the Fed will hike rates today. The US two-year yield has risen from about 3.63% at Monday's lows almost 4.20% yesterday. It needs to rise to 4.35% to recover half of its decline since March 8 but has come back softer today. Meanwhile, the banking crisis continues to ease, and Europe's Stoxx 600 bank index is up 1.5%, its third consecutive advance. The US KBW bank index rallied almost 5% yesterday. Still,...

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