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Hardy: USD levels you need to know

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The US dollar is still on the up, helped in part by a strong US employment report for September. So how best to trade the dollar? Saxo’s John Hardy says the most obvious is to expect EURUSD to decline further. He says this will be helped in part by the clear policy divergence between the ECB and the Federal Reserve. But he also looks at USDCHF which he believes could see a move to parity, as the Swiss National Bank suggests negative policy rates on sight deposits.

If the dollar does start to weaken Hardy says one of the indicators to look at is risk appetite. And for this look at USDJPY for any potential consolidation. He says the level is towards 110-109 or even 108.

As for key levels in EURUSD, Hardy says 1.25 is very symbolic. If that falls 1.20 is the number to watch. For GBPUSD 1.5750 is a target with 1.60 being the psychological resistance. Hardy also recommends traders look at the dollar verses commodity currencies. So he picks 0.7650 as a key level on NZDUSD and in an important week ahead for AUDUSD he warns the level could shift to 0.81 or even 0.80.