EUR/USD will fall, and USD/JPY risks will rise – TDS

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At TD Securities, economists discuss the EUR/USD, USD/CAD, and USD/JPY pairs’ futures.

The S&P 500’s primary support level is 3950.

“For some time, we have been leaning toward a tactical move lower in the EUR/USD. Despite the fact that the 200-DMA will provide significant support, we continue to consider 1.05 to be the primary reevaluation point for this bias. This point for USD/CAD is 1.37, but if stocks fail to hold key supports (we believe the key level will be 3950 in the S&P 500), this may push higher.

USD/JPY risks are currently higher; The next key resistance, 137 (200-DMA), roughly corresponds to the relative 1y1y OIS differential pit of the pair. Note that both broad USD variation and US/JP 1y1y OIS are solid drivers for USD/JPY, so a break of 1.05 in EUR/USD and a move higher in terminal rate expectations are likely requirements for failure to hold this resistance.

 

About the author

Nafees Saifi // entrepreneur, author, trainer, and stocks and FX trader. 
Nafees Saifi is a professional FX trader from, India. Nafees has extensive experience trading commodities, bonds, and equity futures in the Asian, European, and US markets. Nafees holds a Bachelor of Finance and Economics degree and is focused heavily on Investment Finance and Quantitative Analysis.

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