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By eFXdata  —  May 05 - 03:00 PM

Citi outlines its expectations for this Thursday’s Scottish Parliamentary election, and BoE policy meeting.

"With no overnight counting, event risk is likely to persist into this weekend. The SNP is likely to be the biggest party, but whether they achieve an outright majority remains relevant for GBP. Concerns about another independence referendum could weigh on GBP into and after the event, but CitiFX Strategy believes that GBP weakness on risk reduction into political uncertainty should be faded – the underlying GBP picture remains strong for Q2," Citi notes. 

"We see a reasonable chance that the BoE do message a technical QE taper, in line with the base case of our colleagues in Citi Economics. We also see plenty of reasons to wait. We think FX is only going to care if the nature of the ‘taper or no taper’ debate at the April meeting bears much relevance to the overall direction of monetary policy, especially on the risk of earlier rate hikes," Citi adds. 

Citi Research/Market Commentary
By Randolph Donney  —  May 05 - 04:08 PM
  • USD/JPY uptrend is consolidating in back-to-back inside days

  • Fourth higher daily low keeps the bullish bias intact

  • Rising cloud top will be at Tuesday's 109.045 low on EBS on Thursday

  • Close above the 61.8% Fibo of March-April slide at 109.64 is key for uptrend

  • 110.97 2021 peak eyes on a close above 110

  • Monday's low and 38.2% of 107.48-9.695 rise at 108.90/85 pivotal support

For more click on FXBUZ

Chart Click here

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  May 05 - 02:36 PM
  • USD/JPY sees a second inside day within Monday's 108.90-9.695 range

  • ADP, PMI and ISM not far enough of course to cause breakout nL1N2MS1OJ

  • Puts the onus on Friday's NFPs report to energizes bulls or bears

  • Close above 106.94, 61.8% of March-April slide, would restart uptrend

  • Big 109-110 option expiries into mid-May, 1-, 2-wk vols falling

  • Cloud top on Thur matches Tues's 109.045 low on EBS favoring dip buyers

  • The 38.2% Fibo of the 107.48-9.695 rebound at 108.85 props

  • But Friday's 108.71 low is the on-close pivot point

For more click on FXBUZ

Chart Click here

Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  May 05 - 01:58 PM
  • Equities ESv1 rally while yen sales rally AUD/JPY towards 84.70

  • US$ =USD bid after April ADP report nAQN044IDU, USD/CNH nears 6.4935

  • Copper gives up gains after setting 9.5-year high, iron-ore slide extends

  • AUD/USD bulls ignore some downside influences, lift pair in Europe & NY

  • 10-DMA gets pierced, rally extends slightly, 0.7755 trades then dip ensues

  • Pull back is minor though, AUD/USD near 0.7745 late in the session

  • AUD/USD is back on familiar turf, trades in rage established mid-April

  • US April jobs risk looms, range break unlikely to occur until then

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 05 - 01:30 PM

Nordea Research discusses EUR/USD outlook and targets the pair at 1.15 end of Q2.

"Our view on USD interest rates could also lead to a reversal of the EUR/USD towards the second half of this year. We find it likely that we will end 2021 on clearly lower levels in EUR/USD compared to current spot, as the USD interest rates are simply more alive than EUR dittos, not least as the ECB seemingly wants to keep printing more into the economic rebound during the spring and early summer," Nordea notes. 

"The fixed income market also reflects relative growth perspectives, which simply look more upbeat in the US compared to in Europe, among other things due to a more successful vaccine roll-out. We target 1.15-1.16 in EURUSD," Nordea adds. 

Nordea Research/Market Commentary
By Christopher Romano  —  May 05 - 12:28 PM
  • EUR/USD bear sentiment persists as pair hits a 12-session low today

  • Rally sellers are becoming more aggressive, bounces are shallow

  • Daily cloud top, 200-DMA & April 14 daily low are impediments for shorts

  • Falling daily, monthly RSIs imply downside momentum intact, fall to extend

  • US April jobs reports is a key risk, if upbeat impediments likely to break

  • EUR/USD bears then likely to target 1.1855/75 support zone

  • For more click on FXBUZ

eur/usd Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 05 - 10:45 AM

NAB Research discusses AUD/USD outlook and notes that the pair continues to find the air thin above 0.78. NAB thinks that while seasonally, May can be a tricky month for the AUD/USD, fundamentally the pair is starting to look undervalued.

"Our outlook for the AUD/USD, that sees the pair climbing above 80c around mid-2021 and then moving into a higher 80-85 cents trading range in H2 2021/H1 2022, has been predicated on our expectations of commodity prices remaining relatively firm against a softer USD backdrop," NAB notes. 

"Our analysis suggests that China’s orchestrated slowdown towards a more sustainable growth rate of around 6% is not necessarily a risk to this outlook. A more drastic decline in China’s credit impulse is a risk that needs monitoring, although history shows that it is possible for other economies to pick up China’s activity slack," NAB adds. 

NAB Research/Market Commentary
By Paul Spirgel  —  May 05 - 10:17 AM

GBP/USD rose on Wednesday but trimmed earlier gains after near-expectations ADP EMnAQN044IDU and ISM services data [nN9N2KB00Q] did nothing to damage the U.S. recovery story, leaving sterling bulls to hope for a hawkish BoE outcome in the next session.

Cable held near the lower end of its early U.S. 1.3925-1.3895, range but still anchored near the upper end of its recent trading band within the 30-day Bolli envelope spanning 1.3680 and 1.3993.

As focus shifts to Thursday's BoE meeting nL1N2MS0J6, the question is whether MPC will join Canada in tapering its asset purchase program, with rates widely expected to remain on hold.

Currently purchasing GBP 4.4bn gilts per week, the BoE will meet its 2021 target of GBP 875bn by September.
With the UK economy turning a corner, it is almost certain the BoE will not add to its existing program and will likely lower its QE target in 2022.

A hawkish BoE hold, beginning at least with taper talk, could catapult cable above its April 20 trend high at 1.4009 and 1.4022's 61.8% Fib of 1.4240-1.3670, putting the Feb. 24, 2021, high at 1.4240 in sharper focus nL1N2MS0WI.

For more click on FXBUZ

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 05 - 09:30 AM

Bank of America Global Research notes that a range of metrics suggest commodity FX is only tentatively factoring in the possibility of a commodity super cycle.

"Correlations are at the higher end of historical ranges, symptomatic of strong demand expectations. The undervaluation gap, skew premium and short positioning have all meaningfully narrowed but these moves may have further to run if the commodity price rally proves sustainable . Near-term, we are most constructive on NOK that has the most hawkish central bank and benefits from lagged normalization in Europe," BofA notes. 

"Longer-term, the AUD may benefit from green/digital transitions given its available reserves of key commodities such as copper, lithium and cobalt. The China commodity impulse and associated indicators remain key over 2021," BofA adds. 

BofA Global Research
By eFXdata  —  May 05 - 08:37 AM

Credit Suisse discusses EUR/USD technical outlook and flags a scope for bearish turn towards 1.1860.

"EURUSD maintains the weak tone set Friday after closing the week back below key resistance at 1.2100/03 to suggest we have seen a “false ” break higher...The immediate outlook stays seen finely balanced though and we still need to see a break below 1.1995/90 to add weight to this view, as this would set a small intraday top with next supports at 1.1945/42, the 200 -day average and mid - April “outside day” low. Beneath here would then confirm a more important turn lower has indeed been seen with support seen next at 1.1871/60," CS notes.

"Resistance moves to 1.2036 initially, with a break above 1.2077 needed for a move back to 1.2100/03," CS adds.

Credit Suisse Research/Market Commentary
By Rob Howard  —  May 05 - 06:43 AM
  • Cable hits 1.3925 (two-day peak) after rallying off 1.3877 (intra-day low)

  • Rally precedes BoE MPA and Scottish/Hartlepool election event risks Thursday

  • BoE may reduce pace of its bond purchases from GBP 4.4bln/week nL8N2ML9FM

  • 47 of 129 Scottish election seat results due Friday, other 82 due Saturday

  • See: nL4N2MR2UH. Hartlepool by-election result due Friday nL1N2MR0F5

  • 1.3931 (Monday's high), 1.3958 and 1.3979 are GBP/USD resistance levels

GBPUSD Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  May 05 - 05:43 AM
  • Reports of a massive A$ 4-billion 0.6600 AUD put/USD call trade on the CME

  • 4-month expiry with a premium of $7.5-pips - a buyer

  • Trade may have been behind a pick up in AUD/USD OTC option flow Wed's

  • 3-month AUD/USD traded 9.15 implied vol, 2-month on A$350mln at 8.95

  • 1-month AUD/USD implied volatility trades 8.75 (8.4 recent/pandemic low)

For more click on FXBUZ

AUD=D3 Click here

AUD/USD 1-3-month implied volatility near pandemic lows Click here

Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  May 05 - 04:37 AM
  • Monday's bearish engulfing signal playing out and bear trend developing

  • Big support levels looming but potential for a full retracement

  • 76.4% Fibo off recent 0.8589 to 0.8719 is at 0.8620

  • Daily cloud base and 55DMA stand in the way, 0.8622 and 0.8595

  • 14-day momentum and RSI confirming price drop

  • We offer by 0.8670 for a run back to 0.8472 Apr low

    For more click on FXBUZ

EUR/GBP Trader:

EUR/GBP daily candle chart: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  May 05 - 03:42 AM

Those long GBP/USD should beware of its tendency to drop in May, and a break under the April 30 1.3803 low posted would be a near-term sign of weakness.

A study of GBP/USD's performance for each May since 2000 shows it has fallen in 17 of the last 21 years, including in every year since 2010.
Seasonality should not be considered in isolation, but it's a useful tool combined with other factors.

Commodity Futures Trading Commission data show that for the week ending April 27, the value of the net long GBP position held by speculators rose to 1.83 billion pounds from 1.57 billion pounds the previous week.
GBP Refinitiv Matching data since April 27 shows traders may have exited some of those longs, but outstanding longs remain vulnerable to possible near-term sales.

GBP/USD volatility is expected by analysts ahead of Thursday's Bank of England meeting and the Scottish parliamentary elections nL1N2MR1AY.
Related nL1N2MR0H9

For more click on FXBUZ

GBP/USD May Seasonality Chart Click here

IMM Pound Positions Chart: Click here

GBP/USD Refinitiv Matching Flow Data Chart: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  May 05 - 02:39 AM
  • USD/JPY failed to close above the 109.64 Fibo after it broke above it on Mon

  • 109.64 Fibo is a 61.8% of the 110.97 to 107.48 (March to April) EBS drop

  • That has caused a bull trap that creates considerable downside risk

  • Bull trap: a market breaks above a tech level but subsequently reverses

  • However thickening, rising cloud, that spans 107.15-108.88, should prop

  • USD/JPY Trader TGM2336. Previous update nL1N2MR0C6

  • EUR/JPY has seen a 131.31-44 range on Wednesday according to EBS prices

Daily Chart: Click here

Refinitiv IFR Research/Market Commentary
May 05 - 03:55 AM

EUR/USD - Chart Downside Risk Grows

By Martin Miller  —  May 05 - 02:23 AM
  • EUR/USD at risk of a deeper dive into the cloud that now spans 1.1900-1.1974

  • Spot recently failed above the 1.2103 Fibonacci level, leaving a "bull trap"

  • 1.2103 Fibo is a 61.8% retrace of the 1.2349 to 1.1704 2021 (EBS) drop

  • Bull trap is when a mkt breaks above a tech level but subsequently reverses

  • Friday's 2nd biggest daily fall of 2021, closing down 94 pips = bearish

  • USD usually gains in May, the U.S. economy could be key nL1N2MR0H9

  • EUR/USD Trader TGM2334. Previous update nL1N2MR0AZ

Daily Chart: Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  May 05 - 02:07 AM
  • FX options expire 10-am New York/3-pm London- Wednesday May 5

  • EUR/USD: 1.2025-30 (560M), 1.2040 (367M), 1.2050-55 (1BLN), 1.2120 (650M)

  • USD/CHF: 0.9175 (200M). EUR/GBP: 0.8635-50 (300M)

  • AUD/USD: 0.7700 (481M), 0.7750 (1BLN), 0.7775 (488M)

  • 0.7800 (452M), 0.7850-70 (1BLN)

  • USD/CAD: 1.2300 (1.1BLN)

  • USD/JPY: 108.85-109.00 (607M), 110.00 (293M)

  • EUR/SEK: 10.175 (326M)

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  May 04 - 11:40 PM
  • AUD/USD opened 0.68% lower at 0.7711 after USD broadly moved higher nL1N2MR218

  • After trading 0.7709 it tracked higher for the rest of the morning

  • Asian equity markets steadied, E-minis rose 0.3% and Lon copper rose 0.65%

  • Aus building approvals came in much stronger than expected and gave support nAZN06YK00

  • Heading into the afternoon AUD/USD was at session high at 0.7735/40

  • Resistance is at the 10-day MA at 0.7750 and break eases downward pressure

  • Support is at 0.7675 where 50% of 0.7532/0.7818 and yesterday's low converge

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  May 04 - 09:46 PM
  • Aus March buliding approvals boomed at +17.4% versus +3.0% expected nAZN06YK00

  • Reaction to the volatile series muted, but AUD/USD retains bid tone

  • it is trading near the highs of the session just below 0.7730

  • Resistance is at the 10-day MA at 0.7750 and break would ease pressure

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  May 04 - 09:16 PM
  • AUD/USD has moved abve the 21-day MA *0.7718) to a high of 0.7729

  • Equity markets are steady with E-minis up 0.20% and AXJ index +0.12%

  • AUD/USD resistance is at 10-day MA at 0.7750 and break would ease pressure

  • Fall on Tuesday held the 50% of the 0.7532/0.7818 move at 0.7675

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  May 04 - 08:03 PM

  • Steady after closing +0.2% amid broad based USD strength

  • Final day of Golden Week - expect risk and the USD to lead

  • Charts, rising daily cloud provides underlying support - cloud top 108.88

  • Horizontal Tenkan & Kijun lines, 5, 10 & 21 daily moving averages conflict

  • Setup suggests a period of 108.50-109.70 consolidation until Tokyo return

  • 109.63, 61.8% of the March-April fall, tested Monday, is first resistance

  • 108.88 cloud top and 108.58 Tenkan line are the key supports

  • NY 109.04-109.42 range is initial support, resistance

For more click on FXBUZ

jpy may 5 Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  May 04 - 06:46 PM
  • EUR/USD opens 0.41% lower after USD broadly gained on waning demand for risk

  • Yellen comments on higher US yields weighed on risk and underpinned USD nL1N2MR218

  • EUR/USD trend higher may have run its course, as short-term signals turn

  • The 5-day MA has crossed below the 10-day MA - suggesting waning momentum

  • A close below the 21-day MA (1.2011) would confirm end of trend higher

  • The 38.2 of 1.1704/1.2150 is at 1.2079 and break would suggest top in place

  • Resistance at the 10-day MA @ 1.2065 and break would ease downward pressure

  • Bias is for lower, but moves may be limited ahead of Friday's US jobs

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Krishna K  —  May 04 - 05:44 PM
  • USD/JPY opens +0.2% higher, USD steals march over JPY as risk aversion rises

  • Supported as Yellen comments on U.S. interest rates trigger stocks sell-off

  • Treasury's Yellen: Interest rates may need to rise modestly nL1N2MR1GQ

  • USD likely to remain well bid ahead of U.S. jobs data on Friday

  • Standard chartered eyes possible rise of more than 1.5 mln jobs

  • Resistance 109.65-75, support 108.90-109.00; trade a 108.60-109.60 range

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  May 04 - 03:00 PM

The dollar rose on Tuesday, as sharp losses in stocks and other higher risk assets prompted safe-haven flows into the U.S. currency, which recovered most of late-April losses versus the euro.

The dollar also posted more modest gains against other safe-haven currencies, such as the yen and Swiss franc.

EUR/USD fell as far as 1.1999 on EBS but trimmed losses after failing to achieve big breaks below the 21-day moving average at 1.2005 and 1.2000 figure that would embolden shorts.

The 38.2% Fibo of the 1.1704-1.2150 rebound and the daily cloud top at 1.19795/938 offer support if the April 22 low and April 16 high at 1.1994-5 give way.
A bearish bias exists heading into key U.S. data on Wednesday and Friday's employment report nL1N2MR1A6.

USD/JPY's 0.18% rise came after the yen was also widely sought for safety in early trading, sending yen crosses sharply lower intraday.

USD/JPY's recovery from the April 23 trough at 107.48 on EBS is well supported near Monday's 108.90 low, but prices need to close above the 61.8% Fibo of the March-April plunge at 109.64 to put in play upcoming, large 110 options expiries and the 110.97 2021 peak nL1N2MR1F1.

Sterling was down just 0.09% in late U.S. trade after an early risk-off dip to 1.3840 by the kijun line.
The pound was helped by a further retreat in EUR/GBP after April's repeated rally rejections above 0.8700.

There pound received support from the view that the BoE meeting on Thursday might reveal QE tapering plans as rapid UK vaccinations and lifting of restrictions bolster recovery prospects nL1N2MR150.

AUD/USD fell to its lowest since April 14 after the RBA remained adamant about not tightening policy for a long time, but the main move lower came in London trading and amid the drop in stocks that bolstered the U.S. dollar.
Tuesday's selloff to 0.7675 held exactly at the kijun and 50% Fibo of the April recovery and by the April 7 swing high.

Bitcoin, which has recently underperformed ether's string of record highs in seven of the last eight sessions, was last down roughly 4%.
Ether gained 3%.

Wednesday's main event risks are April ADP and ISM non-manufacturing reports ahead of Friday's employment report, which follow the inflationary and supply-side constrained ISM manufacturing data Monday nN9N2KB00N, with the drop in the employment index.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
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