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5 May 2016
Follow EUR/GBP higher, USD/JPY stretched – Deutsche Bank
Oliver Harvey, Macro strategist at Deutsche Bank, suggests that the EUR/GBP is their top scoring currency pair in G10 and is highly trending to the topside and is not at all stretched on both RSI and risk reversal metrics, suggesting the move should be followed.
Key Quotes
“USD/CAD is our top trending (to the downside) currency pair with VHF and newgroundiness at 98th and 82nd percentile, respectively. The cross has a smooth price action and is not at all stretched from risk reversal point of view. However, RSI indicates extreme level of stretchiness, suggesting the move lower might be chased via options.
USD/JPY is breaking new ground to the downside and has smooth price action. However, recent JPY strength is looking technically stretched as measured by both RSI and risk reversal metrics and the pair appears highly volatile as per realized volatility.
Both AUD and NZD have moved to the bottom of the trendiness table indicating that the currencies have lost momentum.”
Key Quotes
“USD/CAD is our top trending (to the downside) currency pair with VHF and newgroundiness at 98th and 82nd percentile, respectively. The cross has a smooth price action and is not at all stretched from risk reversal point of view. However, RSI indicates extreme level of stretchiness, suggesting the move lower might be chased via options.
USD/JPY is breaking new ground to the downside and has smooth price action. However, recent JPY strength is looking technically stretched as measured by both RSI and risk reversal metrics and the pair appears highly volatile as per realized volatility.
Both AUD and NZD have moved to the bottom of the trendiness table indicating that the currencies have lost momentum.”