EUR/USD, AUD/NZD flows: Waiting on MoU outcome; national CPI up next
Still in waiting mode for MoU outcome
AUD/NZD remains the signature move of the week
Focus this morning turns to national CPI data
No fresh news on the Iran front, so leaving the market in waiting mode to see what Trump does with the latest draft MoU over the weekend. Oil sitting around the week’s lows and EUR/USD parking itself just off the 1.1650/60 resistance for instance.
AUD/NZD remains the star of the week of course as the RBNZ trigger point, the Iran/ terms-of-trade turn and the resulting technicals on extreme spec long positioning play through. The cross is -0.3% today and has made it back to 1.2, the initial support breakdown target. 1.1927~ weekly lows would be the next line back on further kiwi recovery.
The other noted 'ToT cross trade' NOK/SEK has been a bit more circumspect and didn’t quite have the same positional excess perhaps but it does have a pullback low of 0.991~ so far, around 23% back, with 0.98 and 38% back if it too can extend. If, of course, the news and oil price action does turn out to be ultimately good.
On that front, the market is very much prisoner to how Trump reacts to his own conservative hawk reactions over the next couple of days, having blinked last time, and whether he opts to push ahead with the interim agreement regardless. The only qualm in that case would be the fact that provisional agreements don’t really carry much weight or hold many qualms in terms of ripping them up with the current administration, it seems.
In Europe, focus is on the various flash inflation reports shortly from France, Spain, Italy and Germany alongside German and Italian unemployment data