Oliver Harvey, Macro strategist at Deutsche Bank, reviews the G10 currencies based on technical measurements to determine which one are the most favourable to trade, noting that while AUD/USD is the most trending currency, the pair appears very stretched from both RSI and RR measures.
Key Quotes
"EUR/SEK is the top technical currency pair in G10. It is one of the least stretched currencies as measured by both RR and RSI metrics, and the currency is trending (to the topside) with VHF at the 84th percentile."
"AUD/USD is the most trending currency with VHF at the 98th percentile and is breaking new ground (to the downside) with smooth price action from realized vol perspective. However the currency pair appears very stretched from both RSI and RR measures, suggesting caution in chasing the move."
"USD/CHF looks attractive – it is trending (to the topside), but we note is not stretched at all although high realized vol means that investors may have to be brave. It also appears the trend lower in EUR/GBP and EUR/USD may be over, with both crosses no longer trending but looking extremely stretched."
Key Quotes
"EUR/SEK is the top technical currency pair in G10. It is one of the least stretched currencies as measured by both RR and RSI metrics, and the currency is trending (to the topside) with VHF at the 84th percentile."
"AUD/USD is the most trending currency with VHF at the 98th percentile and is breaking new ground (to the downside) with smooth price action from realized vol perspective. However the currency pair appears very stretched from both RSI and RR measures, suggesting caution in chasing the move."
"USD/CHF looks attractive – it is trending (to the topside), but we note is not stretched at all although high realized vol means that investors may have to be brave. It also appears the trend lower in EUR/GBP and EUR/USD may be over, with both crosses no longer trending but looking extremely stretched."
