Have the G10 currencies peaked against the USD earlier than expected?..
Chart Source: Aspen Graphics Data: ReutersPast performance is not an indicator of future results. Future returns are not guaranteed, and a loss of original investment mayoccur.
Foreign Exchange Strategies -From the Trading Desk
There are certainly a number of warning signsthat the last stage of the USD-weakness trendwe have been looking for (EURUSD to 1.35-1.37) is unlikely on a tradeable horizon
The chart opposite is our Broad/USD Index whichshows the performance of an equally weightedbasket of the “Old World G10”currencies versus theUSD, it’s USD-termed so lower is USD-strength.
Please note the Broad/USD Index is a product of theSecurities Division of GS.
As discussed in the daily update on Tuesday it hasturned lower from a near perfect hold of the 76.4retrace of the drop from the cycle highs lastNovember to the lows in June. As we often highlight76.4 retrace holds against cycle extremes such asthis are often seen at significant turning points.
The subsequent drop in the index, particularlyWednesday’s sharp fall has taken the market belowthe uptrend which had been forming since the Junelows.
Overall, as an overview chart this warns of a materialturn in the broader trend of the G10 currenciesversus that USD.