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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
MARKET INSIGHT
The DXY move off its recent highs is now close to 4% (using the late September intra-day high). This is in line with pullbacks in May and July/August, although the recent correction has happened over a much shorter time frame. The index is now sub its 20-day MA (110.914) versus last 110.10/15. We are still some distance away from the 50-day MA (108.88) though, having spent very little time below this level since the USD bull run commenced earlier this year.
- For the G10, momentum has shifted only modestly against the USD. Only 4 currencies, the EUR, GBP, JPY (albeit just at the time of writing) and SEK are above their respective 20 day MAs against the USD.
- This leaves our G10 FX MA momentum gauge barely off recent lows, see the first chart below. This measure looks at the proportion of G10 currencies which are above their respective 20, 50,100 or 200 day MA against the USD. Currently we sit just 4 out of possible 36, or just 11.1%.
- Typically, this measure gets closer to 50% or higher before topping out, at least if the 2022 experience is to be repeated.
Fig 1: G10 MA Momentum & DXY Trends
Source: MNI - Market News/Bloomberg
- The table below presents the deviation for each currency pair, in terms of current spot levels relative to each of these MA levels.
- AUD and NZD are the furthest (in percentage terms) from their respective 20 day MA levels.
- A lot may depend on how EUR/USD trends unfold, given it is within striking distance of its 50-day MA (1.0016), versus current spot of 0.9975.
Table 1: G10 Spot Deviation From MA Levels (Percentage Terms, %)
Source: MNI - Market News/Bloomberg
Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.
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