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.”
