ZAR: USDZAR Probing YTD Lows Amid Delayed Tariff Risk
USDZAR is testing the year-to-date lows at 18.3022, trading just over 1% lower on the session as the USD Index sinks to its lowest level since mid-December. Ongoing strength for equities and spot gold trading close to cycle highs will have also contributed to a 1.8% recovery for the rand compared to Monday’s lows, factors which have assisted the broader EM FX basket.
- US President Trump signed a measure yesterday ordering his administration to propose country-by-country reciprocal tariffs. However, Commerce Secretary Lutnick said that the studies on the issue will not be complete until April 1, averting any immediate trade risk from the latest announcement and in turn providing some relief for EM assets.
- Note that Trump issued an order halting all aid to South Africa earlier in the week – likely in a bid to punish the nation for adopting a new land-expropriation law – and therefore the delay to reciprocal tariffs could suggest that further action from the Trump administration against South Africa is unlikely in the very near term.
- For USDZAR, a breach of the Jan 24 YTD low of 18.3022 would reinstate the recent bear cycle and open 18.2343 and 17.9992, the 61.8% and 76.4% retracement points of the Dec 12 - Jan 13 upleg.
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NORWAY: 2024 Goods Trade Surplus Down 13% Y/Y
The Norwegian goods trade balance widened to NOK83.2bln in December, up from NOK74.1bln in November. For 2024 overall, the trade surplus was NOK745bln, 13% below 2023’s level. Excluding offshore trade, Norway ran a deficit of NOK338bln (11% larger than in 2023).
- Total exports were down 4% Y/Y at NOK1,805bln, while imports rose 3.6% Y/Y to NOK1,061bln. The weak NOK likely pushed import prices (and therefore total import values) higher through the year.
- Natural gas exports were NOK559bln in 2024, 11% lower than in 2023. However, natural gas exports still exceeded those of crude oil (which totalled NOK529bln).
- The end of the Russia-Ukraine transit deal and recent cold weather in Europe have supported natural gas prices in January. These developments will have a positive impact on Norwegian gas export values from a price and volume (i.e. substitution) perspective.
- Fish exports were NOK168bln, a new record high.
EUR: FX Exchange traded Weekly Option
FX Exchange traded Weekly Option, expiry Friday:
- EURUSD 1.0500c, sold at 0.00035 in 1.2k.
USDJPY TECHS: Corrective Pullback
- RES 4: 160.00 Round number resistance
- RES 3: 159.45 High Jul 12
- RES 2: 159.26 0.618 proj of the Sep 16 - Nov 15 - Dec 3 price swing
- RES 1: 158.87 High Jan 10
- PRICE: 156.32 @ 14:46 GMT Jan 15
- SUP 1: 155.95 Intraday low
- SUP 2: 154.71 50-day EMA
- SUP 3: 154.44 Low Dec 19
- SUP 4: 153.16 Low Dec 17
The trend condition in USDJPY is unchanged, it remains bullish and the latest move lower is considered corrective. The pair has traded through the 20-day EMA and an extension lower would signal scope for a deeper retracement. The next support to watch is 154.71, the 50-day EMA. A resumption of gains and a breach of 158.87, the Jan 10 high, would confirm a resumption of the uptrend and open 159.45, the Jul 12 ‘24 high.
