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FX Financial Scorecard: Long AUD, CAD, NZD VS Short CHF, EUR, JPY‏

ByDanske Markets
Published 01/13/2014, 08:24 AM
Updated 05/14/2017, 06:45 AM
USD/JPY
0.01%

This week the scorecard recommends buying AUD, CAD and NZD while selling CHF, EUR and JPY.

All input factors with the exception of FX score currently favour being long AUD and NZD and, for the fifth consecutive week, the scorecard recommends buying both AUD and NZD this week. In particular, interest rates and the technical input factor favour buying AUD while support to the NZD mainly comes from the positioning input factor. Last week's sell-off in CAD seems overdone according to the model and the scorecard recommends buying CAD this week, even though all input factors besides FX score still point in the other direction.

The short basket this week mainly includes EUR and CHF. Besides some appreciation against the USD last week which gives a negative contribution to total score from the FX input factor, only the technical input factor currently has a significant negative view on EUR and CHF. Finally, the short basket this week also includes JPY following last week's gain versus USD (FX score) and last week's increase in 1M USD/JPY risk reversal (positioning input factor).

Last week's signals resulted in a 1.5% gain. In particular, the short CAD position performed well, while the short SEK and NOK positions cost a bit. Hence, again this week, the scorecard delivered a solid return and year-to-date the scorecard has now returned a gain of 3.4%.

Next scorecard signals will be sent out on 20 January.

To Read the Entire Report Please Click on the pdf File Below.

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