Quarterly Outlook
Fixed Income Outlook: Bonds Hit Reset. A New Equilibrium Emerges
Althea Spinozzi
Head of Fixed Income Strategy
Access all our platforms from a single account.
Technical Update - Dollar Index, EURUSD, USDJPY & GBPUSD. Key support and resistance levels being tested
Kim Cramer Larsson
Technical Analyst, Saxo Bank
Summary: Dollar Index dancing around key support at 103.20.
EURUSD in and uptrend closing in on key resistance at 1.08
USDJPY downtrend continues could be looking at 126 level
GBPUSD seems strong. Can it break resistance and move to 1.27?
The Dollar Index closed yesterday below key support at 103.20. Despite this lower close the RSI is still showing divergence i.e., not supporting the lower level. RSI closing below its rising trendline will be a strong indication for further downside on the Dollar Index, because trend is down short- and medium-term.
For a short-term rebound a close above 105.50 is needed but upside seems limited. The medium-term 55 daily SMA is declining and close to break below the 200 daily SMA supporting the underlying bearish trend.
Next support is at around 101.30.
Weekly chart strongly indicates we will see a test of 101.30 support. The Dollar Index is trading below 55 weekly SMA, Bollinger bands are still expanding and RSI is showing negative sentiment.
If the Index closes below 101.30 a move to test the 200 weekly SMA is in the cards.
EURUSD uptrend seems a bit stretched short-term. The higher daily close has not pushed the RSI to a higher level. RSI has even failed to break the falling trend line and is still showing divergence. Resistance at 1.08 could be a struggle to break at first attempt. But if EURUSD closes above and RSI closes above its falling trendline there is more upside.
A daily close below 1.0480 could see EURUSD drop back to around the 200 daily SMA. Key strong support at around 1.0240.
Just above it is the 0.618 Fibonacci retracement of the entire down trend at 1.1247 and below it the 0.786 retracement of the downtrend from where it really took off, at 1.1075.
The 200 weekly SMA slightly declining will provide resistance.
RSI showing positive sentiment supporting the medium-term uptrend picture.
USDJPY is trading in a falling channel pattern having failed a couple of attempts to close above the upper falling trendline.
The bounce from support at 130.38 and the divergence on RSI suggests a correction but if RSI closes below its rising trend line and USDJPY closes below 130.38 a move to support at around 126.30 is likely.
If buyers manage to lift USDJPY to close above the upper falling trendline there is strong resistance at around 138.
Weekly chart medium-term trend is down but 130.38 is still holding on. RSI below 40 showing negative sentiment. USDJPY seems set for lower levels. Support at 126.3 is key.
GBPUSD sellers failed to close GBPUSD below key support at 1.19. Fridays market formed a Bullish Engulfing candle strongly suggesting GBPUSD is likely to trade higher in the near future. RSI is positive sentiment indicating higher GBPUSD .
If GBPUSD closes above 1.23 with the RSI closing above 60 threshold on the weekly GBPUSD would be set for a push higher to around 1.27. Resistance at 1.2667 which is also the 1.382 Fibo Projection of the current correction. But a spike up to touch the 0.618 Fibonacci retracement at 1,2445 should not be ruled out.
If GBPUSD closes above 1.23 with the RSI closing above 60 threshold on the weekly GBPUSD would be set for a push higher to around 1.27. Resistance at 1.2667 which is also the 1.382 Fibo Projection of the current correction. But a spike up to touch the 0.618 Fibonacci retracement at 1,2445 should not be ruled out.
RSI divergence: When instrument price is making a new high/low but RSI values are not making new high/low at the same time. That is a sign of imbalance in the market and an weakening of the uptrend/downtrend. Divergence or imbalance in the market can go on for quite some time but not forever. It is an indication of an exhaustion of the trend
Latest Market Insights
Quarterly Outlook
-
-
Quarterly Outlook
Equity Outlook: Will lower rates lift all boats in equities?
Peter Garnry
Chief Investment Strategist
After a period of historically high equity index concentration driven by the 'Magnificent Seven' sto... -
Quarterly Outlook
FX Outlook: USD in limbo amid political and policy jitters
Charu Chanana
Chief Investment Strategist
As we enter the final quarter of 2024, currency markets are set for heightened turbulence due to US ... -
Quarterly Outlook
Macro Outlook: The US rate cut cycle has begun
Peter Garnry
Chief Investment Strategist
The Fed started the US rate cut cycle in Q3 and in this macro outlook we will explore how the rate c... -
Quarterly Outlook
Commodity Outlook: Gold and silver continue to shine bright
Ole Hansen
Head of Commodity Strategy
-
Quarterly Outlook
FX: Risk-on currencies to surge against havens
Charu Chanana
Chief Investment Strategist
Explore the outlook for USD, AUD, NZD, and EM carry trades as risk-on currencies are set to outperfo... -
Quarterly Outlook
Equities: Are we blowing bubbles again
Peter Garnry
Chief Investment Strategist
Explore key trends and opportunities in European equities and electrification theme as market dynami... -
Quarterly Outlook
Macro: Sandcastle economics
Peter Garnry
Chief Investment Strategist
Explore the "two-lane economy," European equities, energy commodities, and the impact of US fiscal p... -
Quarterly Outlook
Bonds: What to do until inflation stabilises
Althea Spinozzi
Head of Fixed Income Strategy
Discover strategies for managing bonds as US and European yields remain rangebound due to uncertain ... -
Quarterly Outlook
Commodities: Energy and grains in focus as metals pause
Ole Hansen
Head of Commodity Strategy
Energy and grains to shine as metals pause. Discover key trends and market drivers for commodities i...