Forex Week In Review

The Week That Was

A quiet week in terms of participation and turnover as Europe headed into the holidays and many squared positions ahead of the NFP print. Global tensions were once again driving safe haven flows with JPY the main beneficiary. The main focus of the week was the NFP print which came in at a shocking 126k and saw USD plummeting subsequently and bringing much respite across the G10 forex space.

  • USD Began to perform better again across the G10 space. Although data out of the states has been softer recently, so too has data elsewhere. However all strength was reversed on Friday following the shockingly low NFP print.
  • EUR Tumbled early in the week as concerns mount over Greece with the due date for it’s payment to the IMF approaching, and currently outweighing any reflationary signs out of the EuroZone. Saw late strength on Friday’s low NFP
  • GBP A very erratic week for the UK currency which saw negative action despite better PMI prints. Concerns over the upcoming election are worrying investors. The principal concern surrounding this issue is that of whether or not the party or parties which form the Govt will indeed hold an EU referendum which may reduce investment flows. Price Broke through the descending trendline from this year’s highs on the weak US NFP.
  • JPY Fell early in the week on weaker industrial production numbers but recovered some ground as USD positions began to see paring heading into the NFP crunch. JPY has been benefiting from safe haven flows stemming from a raft of global tensions and has benefited too from the drop in oil and continued to benefit on Friday.
  • CAD The better GDP print bolstered the Canadian currency but many feel the Canadian economy is heading for trouble which is creating limited directional flow on better data. A significant rebound in oil prices is needed to held the CAD case. Saw strong inflows this week and continued to outperform on Friday
  • AUD An extremely hard fought week the Aussie as price printed new yearly lows. Iron ore prices have been plummeting and markets are increasing expectations of an RBA rate cut at the next meeting. Bounced from yearly lows on Friday’s NFP print but not to the extent that we saw across the G10 as the weak commodity story and rate cut expectations continued to weigh.

Key Views

USD Index: Short Term (1-3 Days): Bearish – Medium Term ( 1-3 Weeks) Bullish
EURUSD:Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
GBPUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
USDJPY: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish
USDCAD: Short Term (1-3 Days): Bearish – Medium Term (1-3 Weeks) Bullish
AUDUSD: Short Term (1-3 Days): Bullish – Medium Term (1-3 Weeks) Bearish
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