• Nikkei reverses course to end higher on bargain buying nL4N2SO1IY

• Dollar gains as Fed hawks circle before jobs report nL4N2SO18T

• USD/JPY rose from Asia's 112.96 low, to 113.49 in London, EBS data shows

• USD/JPY chart is pointing to a bigger recovery nL1N2SO0FD

• But large USD 1.3B 113.00 strike set to expire at the NY cut could attract

• EUR/JPY's 30-day correlation with USD/JPY sub +0.5: relationship broken

• AUD/USD falls to 0.7059 as USD benefits from Fed vs RBA rate outlooks

• First Fed rate hike expected in May/June vs Sept pre-hawkish Powell Tuesday

• In contrast, RBA is not expected to raise rates until 2023 nL4N2SM42U

• 0.7059 is lowest level since Nov 2020 (0.6990 was the low that month)

• AUD/USD could fall further if U.S. Nov NFP above 550k f/c at 1330 GMT

• China iron ore futures closed down 2.1% today (up 6.4% on week) nL1N2SO0CF

• EUR/USD soft in Friday trading, the tenkan and kijun lines remain negative

• Where EUR/USD closes at the end of trading on Friday is key for direction

• Bears need to force a daily close under the 1.1290 Fibo to avert a bear trap

• 1.1290 Fibo is a 61.8% retrace of the 1.0636 to 1.2349 (2020 to 2021) rise

• Tue's 1.1387 peak a barometer for direction, above will signal a bull tilt

• EUR/USD usually makes gains in the month of December nL1N2SN0MH

• EUR/USD Trader TGM2334. Previous update, more on bear trap nL1N2SN0CQ

• Cable drops to 1.3273 (intra-day low) as USD benefits from hawkish Fed speak

• Mester says Omicron threatens to stoke U.S. inflation - FT nL1N2SO09C

• Bostic, Daly and Barkin all struck hawkish stances on Thursday nL4N2SO18T

• First Fed rate hike expected in May/June vs Sept pre-hawkish Powell Tuesday

• U.S. Nov jobs data due 1330 GMT, NFP f/c 550k. Beat could spur 1.3195 test

• 1.3195 was 11-month low on Tuesday, after USD jumped on Powell nL1N2SL1O5

• UK PM Johnson's Tories retain "safe" Bexley seat in by-election, as expected

• Nov 30's volatile 1.3195-1.3371 range upset the bearish order

• However, the bear bias is trying to re-establish itself

• We are maintaining a short from 1.3285 for 1.3170

• Daily action forming a bearish continuation pattern

• Drop under 1.3263, Dec 1 low, sees resumption of bear trend

• Topside Fibos key, 1.3438 and 1.3514 (Nov 18 high) off 1.3834-1.3195

  For more click on FXBUZ

• AUD/USD drops 0.3% as Fed officials show greater consensus for faster taper

• Heads for 5th week of losses as RBA meeting looms Tuesday nL4N2SO0B0

• Robust U.S. economic data weighs; Nov U.S. jobs data awaited FrinL1N2SN27Y

• Omicron concerns undermine risk currencies; AUD/JPY down 0.3% to 2-month low

• 0.70625 trades Fri in Asia, new 2021 low; 38.2% of 2020-2021 rally @ 0.7053

• Stronger support at 0.6990-0.7000; resistance 0.7115-20, 0.7150

• For more click on FXBUZ

• EUR/USD opened -0.12% at 1.1305 after topping out ahead of 1.1350

• The pair traded in a 1.1290/1.1307 range in Asia as risk currencies fell

• EUR continues to benefit from Omicron concerns and they increased in Asia nL1N2SN1QY

• Support is at the 10-day MA at 1.1275 and break increases downward pressure

• Resistance is at the 21-day MA at 1.1359 with sellers ahead of 1.1350

• EUR/USD likely to consolidate ahead of US non-farm payrolls today

• For more click on FXBUZ

• AUD/USD opened 0.20% lower at 0.7094 and tracked lower through the morning

• Reports of more cases on Omicron cases in the US soured the mood in Asia nL1N2SN1QY

• Eminis fell 0.40% while the AXJ index fell 0.60% despite Wall Street lead

• AUD/USD trading at session lows around 0.7065 - near last week's 0.7063 low

• Key support is at the 38.2 of the 0.5510/0.8007 move at 0.7053

• A break below 0.7050 targets the Nov 2020 low at 0.6990

• Price action setting up for some volatility around release of US jobs data

• AUD/USD trend lowwer intact while 10-day MA at 0.7148 caps rallies

• For more click on FXBUZ

• The AUD/USD is sinking in Asia and is at the session low at 0.7070

• Support is at last week's 0.7063 low with major support at 0.7053

• The 38.2 of entire 0.5510/0.8007 move is 0.7053 and break would be bearish

• A break below 0.7050 would initially target the Nov 2020 low at 0.6990

• RBA/Fed policy divergence and Omicron uncertainty weighs on AUD sentiment

• For more click on FXBUZ

• EUR/USD opens 0.12% lower after USD broadly firmed ahead of US jobs report

• Firmer short-end US Treasury yields weighing on EUR/USD

• EUR/USD getting some support from ongoing Omicron variant concerns nL1N2SN1QY

• Resistance is at 21-day MA at 1.1359 and break would suggest bottom in place

• Support is at the 10-day MA at 1.1275 with buyers tipped at 1.1285/95

• EUR/USD consolidation likely to continue ahead US non-farm payrolls

• For more click on FXBUZ

Barclays Research discusses GBP outlook and targets GBP/USD around 1.33 by year-end.

"GBP’s close correlation to real, not nominal interest rates, explains its past despondence to elevated rates market expectations for front-loaded Bank of England tightening. Rising UK inflation is undercutting the positive impact of BoE rate hike expectations. The front-end of the UK OIS curve now looks reasonably priced to us. However, rising inflation into Q1 22 should undercut real rate support for the pound," Barclays notes. 

"Slowing growth and ongoing concerns about the EU-UK post-Brexit trading relationships will limit the ability for GBP to rally near term. Further out, elevated levels of foreign acquisition and investment in UK assets should provide an undercurrent of support for GBP," Barclays adds. 

• AUD/USD set to open -0.20% as the USD edged higher ahead of US jobs report

• Strong rally in risk assets failed to support AUD/USD nL1N2SN32M

• Diverging Fed/RBA expectations weighing on AUD/USD as is market volatility nL1N2SN21K

• AUD/USD trending lower with the 5, 10 and 21-day MAs in a bearish alignment

• Resistance is at the 10-day MA, which will descend to around 0.7150 today

• Key fibo support at the 38.2 of the 0.5510/0.8007 move at 0.7053 is in focus

• Asia likely will be quiet today ahead of the US non-farm payrolls

• For more click on FXBUZ

• USD/JPY up after Fed's Bostic says economy, markets can handle taper, hikes

• More historically tight US labor data pre-payrolls nL1N2SM2MS props

• Bostic comments tamed bear curve flattening, lifted stocks nL1N2SN1QG

• USD/JPY up from 112.71 NY low to 113.33 high on Bostic, strong data

• Pending bullish engulfing candle if closes above Wed's 113.02 open on EBS

• Omicron and correction of o/b condition low at 112.535 by 23.6% of '21 range

• But tenkan and kijun at 114.03 (50% of 115.525-2.535 drop) are key hurdles

  For more click on FXBUZ

• AUD/USD slips 0.3% to 0.7087 as NorAm closes; NY range 0.7115-0.7084

• Early NorAm bid evaporates as S.Africa warns on Omicron nL8N2SN5RI

• Virus may sap RBA from shifting to more hawkish rate view on Dec 7

• AUD/$ steady above 2021 low, bulls need help from RBA on Dec 7 nL1N2SN1RD

• Resistance at falling 10-DMA by 0.7168, 200-WMA at 0.7191

• AUD/$ supt at Thurs low 0.7084, Nov 30 low 0.7063 & lwr 30-d Bolli at 0.7050

• Below 0.7050 a series of 2020 lows from 0.6990 to May 2020 low at 0.6373 attracts

• For more click on FXBUZ

ING Research discusses GBP outlook ahead of this month's BoE meeting.

"EUR/GBP has remained supported as markets revised expectations for a December Bank of England rate hike after MPC member Catherine Mann’s comments on Tuesday. The OIS market is currently pricing in 8bp of tightening for the December meeting," ING notes. 

"For today, except for any news on the Omicron spread/vaccine efficacity, markets will have no data or BoE speakers to further direct their policy expectations. EUR/GBP may hold around current levels, although any further risk-off swing bears a good deal of upside risk for the pair," ING adds. 

• Sterling +0.15% at 1.3295 into NY close; NorAm range 1.3333-1.3294

• Early rise to 1.3333 pared amid rising Omicron, Fed rate uncertainties

• S.Africa's sees 3-fold higher risk of reinfection from Omicron nL8N2SN5RI

• Sterling's reprieve may be short-lived if BoE disappoints again nL1N2SN1BX

• Daily MAs, cloud point lower hint at more weakness

• Support at Tues low 1.3263, Nov 30 low 1.3195 & lwr 30-d Bolli at 1.3172

• Res at 10-DMA by 1.3339, bearish momentum stalls abv 1.3464 50% of 1.4250-1.2676

MUFG Research discusses its expectations for this month's major central banks meetings.

"December is packed with key central bank decisions that could certainly fuel increased FX volatility into year-end. Again, based on the above assumption on Omicron, we expect the FOMC to signal the need for a faster taper of QE but downplay the implications for rate hikes," MUFG notes. 

"The FOMC announcement on 15th December will then be followed the next day by the ECB and BoE meetings. We expect the BoE to hike rates by 15bps to 0.25%. Covering the three-day period 15th/17th December, across G10 and EM there will be no less than 12 central bank announcements. This could prove a volatile period for the financial markets especially given the Fed appears determined to confirm a speeding up of the QE tapering at the FOMC meeting," MUFG adds. 

Sterling led major currencies higher versus the dollar on Thursday, rising 0.37% to 1.3321, reversing most of Wednesday's late, Omicron-related, risk-off drubbing to 1.3263, with the pound seen well placed to weather uncertainties so long as the BoE remains on course to hike rates.

But, the BoE will have to deliver its Dec.
16 meeting after balking at the MPC policy gathering in November.

Relatively speaking the pound has held up well, falling just 2.6% versus the dollar in 2021, better than low-for-longer EUR and JPY, down 7.2% and 9.2% respectively.
Sterling has risen 4.7% versus the euro and 7.1% against the yen.

Since the BoE wrong-footed markets by holding rates steady on Nov.
4, keeping then, expectations for a hike in December have fallen from 100% for a 25bp increase to 50% for a 15bp move BOEWATCH.

Another disappointment by the BoE on rates would extend the pound's weakness versus the dollar, potentially below the Nov.
30 flash low at 1.3195, while undermining its performance against the euro and yen.

For more click on FXBUZ

Bank of America Global Research highlights its top 5 FX trades for 2022.

"Long USDJPY. We target 117, with current spot at 112.9, and stop loss at 110.8.

Long USDCHF. Buy a 3m 0.94/0.97 USDCHF call spread. Fundamentals and Technicals supportive. USDCHF has formed diamond bottom and is due to upside break.

Short EURUSD. Buy a 6m ATMF-1.09 EURUSD put spread. We see elevated FX vol as global inflation spikes higher and we position for monetary ECB-Fed policy divergence," BofA notes. 

"Long NOKSEK. Buy NOKSEK at 1.0050, target 1.07, stop/loss 0.9750. We are bullish oil prices and we think relative monetary policy is underpriced.

Long EURCAD vol. We see higher FX vol. 3m EURCAD vol has been performing and elevated oil prices and monetary policy divergence should keep it sustained," BofA adds. 

Credit Suisse discusses EUR/USD outlook and maintains a bearish bias targeting a move towards 1.1150.

"The arrival of the Omicron variant poses a new threat to global growth and risky assets, and it's not surprising in that context to see both equity and rate volatility spike higher in the past week. Unfortunately for markets, Fed chair Powell's recent comments do not suggest he is now inclined to turn dovish again to bail out investor sentiment. Rather, the idea of an accelerated taper is being proposed instead, acting as a further signal for markets to sober up and take stock," CS notes. 

"From our perspective, as USD bulls against both EUR and JPY before Omicron emerged, the important element here is that the idea of longer-term rates divergence in favour of the USD has not been eliminated yet, despite the knee-jerk spread tightening that emerged once the news of the new variant hit the wires. As such, we retain our EURUSD 1.1150, even if it may now take longer to get to that level than seemed likely a week ago," CS adds. 

• Cable reaches 1.3332 after extending north from 1.3281 (early London low)

• 1.3332 = intra-day high, 20 pips shy of Wednesday's peak nL1N2SN0F7

• Risk-sensitive GBP supported by positive U.S. equity futures nL4N2SN2JH

• 1.3300 is now a GBP/USD support level (1.3305 was Asian session high)

• There is a large 1.3300 option expiry for the 10am ET NY cut nL1N2SN0D9

• UK firms struggle to find staff, see higher CPI - BoE survey nL8N2SN2I3

When parity gets a mention, currency pairs usually head in the opposite direction, often swiftly.
Currently no one expects EUR/USD to drop that far, which is why EUR/USD traders should consider it.

In contrast to big speculation and bearish forecasting for moves to and below parity in the past, EUR/USD traders have stubbornly retained longs throughout a large decline, and when economists were last polled by Reuters they expected a rise.

Should EUR/USD drop below 1.0863, a fraction of the decline from 1.2135 since June, techs would target the multi-decade low at 1.0340, and a move under this year's low at 1.1186, which is 61.8% of the rise from 2016's 1.0340 low to 2018's 1.2556 peak, may provide the spark.

The $2 billion staked on a drop in November compares to $15 billion bet on a fall when EUR/USD reached 1.1105 in June 2019, and 26 billion in January 2015 when EUR/USD first dropped below 1.1100 on route to 1.0457.

The proportions of betting reached during those risk-averse times could be eclipsed in the current environment, where stimulus supports gambling and sharply diverging ECB/Fed policy weighs. nL8N2SM1K0

For more click on FXBUZ

EUR/USD could make gains this month, something it has done in 14 of the past 21 Decembers, including every one since 2017.
While seasonality trends should not be considered in isolation, when combined with other factors they can be a useful tool.

EUR/USD remains at risk from a bear trap that has been set under the 1.1290 Fibonacci level, 61.8% of the 1.0636 to 1.2349 (2020 to 2021) rise.
For two weeks in a row EUR/USD broke but failed to close under this key level.

A bear trap is set when a market breaks below a tech level but then reverses, and is usually a bullish sign.

This week's 1.1387 high, set on Tuesday, should act as an early barometer for EUR/USD's direction.
A break above here will signal a bigger recovery in spot into the turn of the year.

A month-end close above the December 1.1335 EBS open is needed to keep December's positive streak intact.

Related dollar comment. nL1N2SM0SB

For more click on FXBUZ

• German engineering orders soared 19% in Oct, foreign orders +23%

• Aug-Oct foreign orders +58% nL1N2SN0EA

• In wake of new COVID-19 variant demand likely to wane

• The Fed led withdrawal of stimulus will also impact demand

• Between Aug-Oct EUR/USD dropped 1.1909 to 1.1522

• Pair dropping to 1.1186 since exposing big downside levels nL1N2SN0FT