Barclays Pdf Report – Chart of the day: Crude rally stokes energy producer FX bid
The about-turn in WTI crude oil prices over the past 24-hours has forced us to re-evaluate our expectation of a USDCAD rally. Risk appetite has improved and a move below the February lows for USDCAD would signal further weakness to come. Other energy producer currencies such as RUB and NOK are also expected to benefit on the back of higher crude prices. A move above the 36.28 late January highs in WTI crude would point to stronger gains for the producer currencies.
- USDRUB support erosion signals lower. A close below 74.600 confirms downside towards targets in the 70.000 area.
- USDNOK down-day endorses the prior top candle and points towards targets near 8.4985 and then the 8.4455 lows.
- USDCAD bearish engulfing negates the prior bullish candle. Sub-1.3640 would signal further weakness towards1.3540/80 initially.
FX at a glance
EURUSD: No change. We are bearish and look for a move towards initial downside targets in the 1.1090/60 area. It would take a move below 1.1060 to make us more bearish and signal a deeper setback towards 1.0710.
USDJPY: A move below Wednesday’s 113.35 lows would encourage our bearish view. We look for selling interest in the 115.05 to provide a cap for a move lower towards initial downside targets in the 110.35/05 area. Beyond there we see room towards greater targets near 106.00.
GBPUSD: We are bearish towards initial targets in the 1.4150 area and then lower towards the 1.4080 year-to-date lows.
USDCHF: Having reached our initial target near 0.9940, we now look for a move above the 0.9960 area to signal higher in range towards 1.0130.
EURJPY: We are bearish and look for a move below initial targets near 125.75 to open our next targets near 125.00 and then the 122.00 area.
EURGBP: We are bearish following last week’s topping candle and look for selling interest in the 0.8000/0.8060 area to cap a move lower in range towards initial targets near 0.7625. A move below there would point towards the 0.7525 range lows.
EURCHF: Wednesday’s close above 1.1030, the 21-dma, encourages our bullish view. We are looking for a move higher in range towards 1.1150 and then the 1.1200 highs.
AUDUSD: No change. We are bearish and would look to sell against the 0.7245 range highs. A move below initial targets near 0.7000 would signal lower towards our greater targets in the 0.6915 area.
NZDUSD: We are bearish against the 0.6755 are for a move towards targets near 0.6415 and then the 0.6345 lows.
USDCAD: The about-turn in crude oil prices has wrong footed us and we have been forced to pare back our bullish view following yesterday’s bearish engulfing candle. A move below 1.3640 would make us more bearish towards targets near 1.3540/80 and then the 1.3460 former range highs.
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