eFXplus DATA

Barclays Research discusses its expectations for next week's ECB policy meeting. 

"The next monetary policy meeting will take place on 12 December, and this will be the first one chaired by Christine Lagarde.

We expect her to re-iterate the need for maintaining an accommodative policy stance in the current economic environment, and the call to euro area governments to support ECB action with appropriate fiscal policies. She will present the updated macroeconomic projections, which we believe will remain broadly unchanged from September, and we expect her to repeat the message of patience delivered by outgoing President Draghi at his last meeting in October," Barclays projects. 

"Given our view on the economic outlook for 2020, we now expect monetary policy to remain unchanged for the whole of 2020," Barclays adds. 

• USD/JPY holding above the 55-DMA that caught this week's low

• But price action is disconcerting for the uptrend since mid-October

• The daily cloud top and Nov. 14 swing low at 108.235 look crucial

• A break and close below them would end the uptrend from Oct's 106.48 low

• Bulls need a 110+ close to take on Fibo targets by 110.50

• RSIs are rising and the pair holds above the daily cloud top

• Short-term consolidation persists which should resolve to the topside

• 10-DMA is poised to cross above both the 21 & 55-DMAs

• Bull sentiment should be bolstered when the 10-DMA does cross above

• Tests of the 200-DMA and October high seem likely

• Break above October's high will target 0.700/20 zone & July's high

Credit Suisse discusses GBP/USD technical outlook and flags a scope for further gains upon a break of resistance around 1.3185.

GBP/USD  has also surged higher after completing a bull “triangle” and is now testing pivotal resistance at the 50% retracement of the 2018/2019 fall, April high, potential long term downtrend from 2014 and the 200-week average at 1.3103/85," CS notes. 

"A break above here remains needed to mark a broader regime shift higher, which is our bias, with resistance then seen next at the “measured triangle objective” at 1.3276 ahead of current 2019 high at 1.3381, before the 61.8% retracement at 1.3453 and then the “neckline” to the early 2018 top at 1.3712," CS adds. 

The stellar U.S. jobs reportnLLA6NEF5NnW1N26F01R is driving USD/JPY up toward Thursday's 109 high, as Treasury yields and stocks also rise nL1N28G0H3. However, a breakout beyond the 109.73 trend high and 110 option barriers toward major topside objectives by 110.50 will require tangible progress toward a U.S.-China phase one trade deal.
The jobs data, boosted by the end of the GM strike and a five-week sample period, suggests the U.S. has the upper hand in trade talks as the Dec.
15 U.S. tariff-hike deadline approaches.
The question is whether the relative durability of the U.S. economy will tempt the U.S. to press hard for concessions, particularly on guaranteed Chinese farm goods imports of $40-$50bln a year that is more than double pre-trade war import levels.
With that and the level of tariff rollbacks China wants for sealing a phase one deal, there's enough uncertainty to keep the risk-sensitive USD/JPY below key 110 resistance until the Dec.
15 tariff hike deadline is dealt with.
Thursday's 109 high and $3.5bln of expiries there on Dec.
10-11 are immediate hurdles.
The 76.4% Fibo of 2019's drop and an ABC target off 104.46 by 110.50 will be in play if the Dec.
15 tariffs are delayed or a deal is reached.

CIBC Research discusses its reaction to today's Canadian jobs report for the month of November.

"Canada's labour market took more than a breather in November, with an apparent massive decline in employment.

Headline jobs fell 71K during the month. While roughly 20K of that drop was due to a reversal of temporary federal election related hiring, the rest of the weakness was broadly based by industry and by type of employment (both full-time and part-time). The drop left the unemployment rate rising four ticks to 5.9%, and while wage growth held steady at 4.4%, that comes as a weak reading fell out of the annual calculation," CIBC notes. 

"Overall, a weak set of numbers, something that could have the Bank of Canada rethinking its on-hold stance if it were to continue," CIBC adds. 

TD Research discusses EUR/USD tactical outlook and advises against chasing it higher in the near-term. 

"Following this week's ISM report, we get the sense that the USD may soon regain its footing again. The failure to reclaim the 1.11 handle - yet again - is an notable feature to us. The 200dma located at 1.1160 just above should be a notable blockage - the pair has remained below it since mid-2018, and we have no reason to expect that will change in the near-term," TD notes. 

"We think this suggests that the risk/reward of chasing further upside in EURUSD from here looks fraught with risk...As a result, we believe EURUSD is in for a tactical reversal with the 1.0980 level as the next likely attractor for the pair," TD adds. 

• High flying kiwi dollar had left Aussie in the dust nL4N28F47X

• However, modest AUD/NZD short-covering has buoyed AUD/USD on Friday

• AUD/USD has seen a 0.6831-0.6850 range according to Refinitiv prices

• Huge techs, option hedge dictate AUD, no bets on big NFP move nL1N28G092

• AUD/USD direction also vulnerable to progress of U.S.-China trade talks

• USD bears need a repeat close under a key Fibo to avoid trap nL1N28G084

Option flows and price action can signal potential targets in the underlying product, making them useful in predicting the GBP's level after the UK election.
GBP call options have been the bet of choice nL2N27V06N, on hopes of a large Conservative majority, which is considered the best outcome for GBP.
GBP/USD 1.3500 has been the stand-out target strike for many, with expiries in the days and weeks following the election.
A large Conservative majority is sure to fuel further speculative GBP demand, but 1.3500 could prove sticky as traders take profits.
As well as 7 billion pounds 1.3500 vanilla option strikes expiring Dec.
13 to Jan.
31, 1.3500 barrier options are numerous and likely to be well- defended.
For now, the GBP advance has faltered in the mid 1.31s, but if the Conservatives maintain their 10-point poll lead over the weekend, more pre- election gains are possible.
There's big tech and barrier resistance 1.3168-1.3200 to contend with first nL1N28F09U, and beware the post election volatility, and setback risk warning from options, too nL1N28G05P

• EBS flow data shows USD/JPY has been steadily sold since NY session Thursday

• Big event risk: U.S. non-farm payrolls and unemployment rate data Friday

• USD/JPY risks a big drop, bulls need a close above tenkan nL1N28G06A

• Daily tenkan line comes in at 109.08. EBS range has been 108.59-78 Friday

• Japanese importers, other buyers from 108.50, exporters from 109.00

• EUR/JPY's correlation with USD/JPY high, 30/60-day logs are +0.67/+0.60

• Dollar is in tatters nL1N28F178

• EUR/USD twice broke, but failed to close above the 1.1104 Fibo

• However, the thick daily cloud that spans the 1.1030-77 region props

• A daily close above the 1.1104 Fibo would expose the Oct 1.1180 peak

• 1.1104, a 61.8% retrace of the 1.1180 to 1.0981 (Oct to Nov) EBS drop

• December is a terrible month to be short EUR/USD nL1N28D08Y

• A weaker dollar is at the mercy of U.S. jobs data nL1N28F07O

• Previous update nL1N28F053. EUR/USD Trading Page TGM2334

• EUR/USD: 1.1040-50 (1.8BLN), 1.1075 (900M),1.1095-1.1100 (1.1BLN)

• 1.1120-25 (1.3BLN)

• GBP/USD: 1.3100 (753M), 1.3170 (350M), 1.3200 (320M)

• AUD/USD: 0.6835 (1BLN)

• USD/CAD: 1.3165-75 (750M)

• USD/JPY: 107.50 (1BLN), 108.50 (250M), 110.00 (500M)

• EUR/USD slumbered in Asia between 1.1100-10, range 1.1103-08 EBS

• Supported by short-covering ahead of the US jobs report, relatively buoyant

• USD has been on the defensive since weak ADP and US ISM earlier in the week

• EUR/USD sellers ahead of 1.1120 with break targeting 200-day MA at 1.1158

• Support at 1.1060/70 and more @ 1.1045 where the 21 & 55-day MAs converge

• Large option expiries tether of sorts - 1.1090-1.1105 E1.3 bln

  
  

Nomura Research discusses USD/JPY's CTA positioning and notes that it's mainly close to neutral and sidelined around current levels.

"CTAs having held back on going long in the USD/JPY market (buying USD and selling yen) during the recent risk-on phase, they have managed to avoid simultaneous stock selling and yen buying.

CTAs' USD/JPY positions are close to neutral at present, and they are not currently moving either to buy or to sell," Nomura notes. 

"With the latent risk of yen appreciation being suppressed, if fundamentals-oriented investors begin tentatively dip-buying below 23,000, this downward move by the Nikkei 225 could be brought to a close relatively soon," Nomura adds.

• Flat in a 1.3153/1.3161 range, but decent interest once Asia fully opened

• EUR/GBP saw modest volumes with a very tight 0.8438/0.8341 range

• Conservative election victory expectations attracted fresh demand this week

• Initial significant resistance at 1.3168/90, 50% 2018/19 fall and May high

• 1.3168 capped in NY, but is under pressure - strong resistance into 1.3200

• Close above 1.3200 would be a strong positive into the election next week

• Sustained 1.3200 break would open the door to the 1.3380 2019 high in March

• Close below the prior 1.3000 range high needed to undermine topside bias

• EUR/USD gaining traction higher on bullish technical validation

• Bounce off daily Ichimoku Cloud at 1.1077 on Thurs provides boost

• Also reaffirmed Bollinger uptrend channel, pointing to 200 DMA 1.1158

• Economic data ahead could be driver for another spurt higher

• German industrial output and US nonfarm payrolls data due today

• Improvement in US jobs data could thwart EUR/USD rally; exp 180k

• +0.1%, AUD/NZD profit taking, cross is up 0.15% after falling 0.8% this week

• Cross trends south on divergent data, central bank expectations nL4N28F0G9

• AUD has consolidates below 0.6862, 61.8% of the Nov fall for 3 days

• Charts are neutral - momentum studies, 5, 10 & 21 DMAs conflict

• Fundamentals suggest the next move is lower unless the USD falls

• 0.6831 earlier low and 0.6848 London high initial support-resistance

• Flat, closed +0.4%, as expectations of a Conservative majority attract flow

• Charts - momentum studies edge higher, while 5, 10 & 21 DMAs moving north

• Weekly charts also show 5, 10 & 21 week MAs climbing - bullish setup

• Initial significant resistance at 1.3168/90, 50% 2018/19 fall and May high

• 1.3168 capped in NY, but is under pressure - strong resistance into 1.3200

• Sustained 1.3200 break would open the door to the 1.3380 2019 high in March

• Close below the prior 1.3000 range high needed to undermine topside bias

• NY 1.3126/1.3166 range is initial support-resistance

  
  

  
  

NAB discusses NZD/USD technical outlook and flags a scope for an extended bullish breakout.

"Q4 2019 uptrend is accelerating with the break of key resistance at 0.6450/80. Bullish breakout in the weekly RSI adds further uptrend confirmation," NAB notes. 

"MT and LT momentum indicators are decisively positive. The break of the 2018/2019 triangle in the weekly RSI confirms the most aggressive positive MT momentum shift of 2018/2019. 

We anticipate a challenge of 0.6610/20 in the coming weeks. Weekly close above 0.6610 will initially target 0.6775/00 with scope to target 0.6900+ MT," NAB adds. 

• GBP/USD ends NY firm at 1.3160 +0.42%; NorAm range 1.3166-1.3126

• Pair buoyed by upbeat UK elex tones, Tory majority seen moving Brexit along

• IMM: Sterling seeks evidence of fresh longs to underpin rally nL1N28F0NT

• Fib resistance at 1.3168 holds for now, above eyes May 6 high 1.3190

• EUR/GBP -0.18% at 0.8436, Thurs range 0.8454-31; GBP/EUR hot nL1N28F109