EUR/USD, USD/JPY flows - extending happy Monday, outlook still uncertain
Overnight oil and tech risk-positive combination extends into NY
Outlook remains uncertain
Largely extension and amplification of the overnight action heading into NY, with oil building on its latest push lower on the back of the Trump comments, and tech equities still attempting to build at least a corrective bounce leg, even with Nvidia’s specific concerns.
US crude’s run on, now off around $3-3 ½, takes it back to the recent lows and key support from the Oct lows – if that gives way then the next settlement area is down at $80, late Aug lows.
USD/risk generally largely responsive to this current oil-tech combination, still the driving axis post election, though its largely indecisive consolidation overall when you step back and view the last few days. EUR/USD in particular is right back on its recent 1.12 pivot with ½ to 1 point range band around that in recent weeks. Still very ambiguous at to whether that is basing (and amid very short euro positioning), or consolidating and unwinding oversold conditions in the swing lower, reflected in some currently very uncertain market trading sentiment regarding the merits of dip buying versus strength selling. Positioning does remain heavily skewed to the defensive risk-off side of the fence, so that remains one consideration.