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By John Noonan  —  Oct 20 - 10:51 PM
  • EUR/USD opened at 1.1650 when USD eased during US session

  • It grinded higher through the morning as the USD retained an offered tone

  • Heading into the afternoon it is at the session high at 1.1666

  • Resistance is at the 38.2 of the 1.18909/1.1522 move at 1.1670

  • A clear break targets 1.1715 where the 50% retrace and 55-day MA converge

  • Support is at the 21-day MA at 1.1615 and break eases upward pressure

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 20 - 09:21 PM
  • AUD/USD has traded above 0.7530 to a fresh 3-month high

  • Key resistance at 0.7555/65 now in focus as Aus bond yields climb

  • 10-year Aus yield is around 1.83% - 16 BPs higher than US 10-year yield

  • The 50% of the 2021 high/low is at 0.7556 and 200-day MA is at 0.7565

  • The strong resistance may slow the relentless aUD/USD gains for now

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Oct 20 - 09:02 PM

The EUR/USD bounce has entered its second week, led by a weaker U.S. dollar, and has further to run technically.
In the bigger picture, this is a healthy correction in the primary downtrend.

The outlook for interest rate differentials remains supportive of the USD in the longer term. The Federal Reserve is on track to taper this year despite moderating U.S.
economic growth, as inflationary and wages pressures build nL1N2RG2BX.
In Europe, inflationary pressure is seen as transitory nW1N2LK03OnF9N2PW017and the European Central Bank is about to lose its most prominent hawk nL8N2RG2LK.

Yet there are short-term negatives for U.S. growth expectations and potentially the USD. Supply chain issues, a major contributor to inflationary pressures, appear set to persist for longer than initially thought nL1N2RF2LD.

While the market is confident that President Joe Biden will deliver a stimulus package, uncertainty over its size, composition and timing could undermine confidence nL1N2RG2VD.

Technically the short-term EUR/USD outlook is positive, though the primary downtrend since May remains in place. Since mid-July, EUR/USD has swung between the upper and lower 21-day Bollinger bands four times, pivoting around the 21-day moving average.

EUR/USD rejected the lower band in early October and closed above the 21-DMA on Tuesday.
The break was sustained on Wednesday, suggesting that the next move is a test of the falling upper band, at 1.1726 on Thursday.

For more click on FXBUZ

eur Oct 21 Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 20 - 07:12 PM
  • EUR/USD opens 0.15% higher after failing to match Tuesday's high at 1.1670

  • USD broadly weakened but most of the losses were against risk currencies

  • Resistance is at the 38.2 of the 1.1909/1.1522 move at 1.1670

  • This level needs to break soon or sideways trading will return

  • Break above 1.1670 targets 1.1615 where the 55-day MA & 50% retrace converge

  • Support is at the 21-day MA at 1.1615 and the 10-day MA at 1.1599

  • A break below 1.1595 would suggest a short-term top is in place

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 20 - 06:23 PM
  • AUD/USD gained another 0.52% and is comfortably above 0.7500 as Asia opens

  • Buoyant equity & commodity markets underpin, as high Aus yields also support nL1N2RG2X4

  • Key resistance at 0.7555/65 in focus as the first objective of trend higher

  • The 50% retrace of the year's high/low is at 0.7556 and 200-day MA at 0.7565

  • Support is at former resistance at 0.7475/85 and 10-day MA at 0.7414

  • Key will be whether Aus bond yields continue to outpace rise in US yields

  • Lofty AUD/USD levels leave it susceptible to a negative mood change in risk

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Oct 20 - 03:18 PM

The dollar index tumbled on Wednesday after a rebound attempt failed to surpass the 21-day moving average, reaffirming its retreat from this month's highs as equities gains dimmed safe-haven demand for the U.S. currency and traders pruned Fed rate hike pricing.

The Fed's beige book report ahead of its Nov.
2-3 meeting reiterated the supply-side challenges including labor scarcity, cost pressures, disruptions and price hikes nNAQN04RNQ, though markets had already priced in much of this.

The dollar is facing an historically bearish setup presented by U.S. CPI now near its highest since 2008 and real 2-year Treasury yields near their most negative since 1980's post-dollar float low nL1N2RG1FR.

EUR/USD was up 0.2% after an early dip to the just cleared 21-DMA support on news Bundesbank President Jens Weidmann was leaving at year-end, perhaps making room for a less hawkish replacement nL8N2RG2LK.

The rebound from Wednesday's 1.1617 low on EBS remains below the 30-DMA and 38.2% Fibo of the September-October slide at 1.1666/70, but upside risks appear to be growing nL1N2RG19Z.

Adding to the sense the dollar's broader recovery has reached meaningful resistance and warranted a correction, was USD/JPY's 0.15% drop after a fleeting breach of long-term resistance and ahead of late-2017's high and major options barrier defense at 115.

USD/JPY is ripe for a retracement of October's 110.82-114.695 advance, with the 38.2% Fibo at last Thursday's 113.21 low an attractive target nL1N2RG13R.

Though USD/JPY is generally helped by risk-on flows, the drag from the drop in 5-year Treasury-JGB yields spreads more than offset it.

This comes as Japanese officials have been voicing concerns about the weakening of the yen in the context of soaring import prices and a slowdown in exports nL4N2RE057, though FX intervention looks far less likely than rhetoric geared toward keeping yen losses in check.

GBP/USD was up 0.24%, reversing an overnight pullback tied a slightly lower-than-forecast UK inflation print, and back up by the 50% Fibo of the June-September slide, that's also the weekly kijun, and Tuesday's recovery high at 1.3831/34.

Cable was on track to close above the 100-DMA for the first time since Aug.
5, being supported by aggressive BOE rate hike pricing nL1N2RG1DE.

The pound's advance was undeterred by sharply rising UK COVID cases, and related deaths now at their highest since March nL8N2RG1K5.

AUD/USD was up 0.64% and hit a 3-1/2 month high as a risk and commodities proxy and in anticipation of roughly 75bp of RBA hikes next year nL1N2RG27J.

USD/CAD fell 0.44% with Canadian inflation hitting an 18-year high in September nL1N2RG137.

Ether's 6.3% advance led bitcoin's 3.8% rise to fresh record highs nL1N2RG1GH in the wake of Tuesday's strong debut for bitcoin futures ETF, and as risk-on flows and inflation fears work in favor of cryptos.

Unexpected drops in U.S. crude and petrol product inventories sent WTI to a 7-year high.

claims, Philly Fed and existing homes sales top Thursday's releases.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Oct 20 - 03:07 PM
  • Early rally past 2018's 114.55 high was reversed at 114.695

  • That high shy of the Nov 2017 peak at 114.735, big 115 barriers

  • Prices o/b on dailies and weeklies, due for at least a decent dip

  • Oct's 110.82-114.695 EBS rise completes its Fibo objective

  • 23.6% and 38.2% Fibos of Oct's rise are at 113.78/21

  • Both Fibos are by recent daily highs and lows, look attractive

  • Short-term Treasury-JGB yields spreads pulling back is a drag

  • Japan govt is jaw boning against yen drop, specs already short

  • Real 2-yr Tsy ylds now near most negative since 1980 nadir nL1N2RG1FR

  • Real 2-yr JGB yields still positive, could limit USD/JPY gains

For more click on FXBUZ

Chart Click here

Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Oct 20 - 01:36 PM
  • Sterling firms into NY close, ends by session high +0.26% at 1.3825

  • GBP/USD finds res at 1.3831, 50% Fib of 1.4250-1.3412's 2021 range

  • Post-UK CPI weakness reversed, UK rates price in 2021 hike BOEWATCH

  • Sterling bulls shrug off UK CPI miss, highs above 1.38 in view nL1N2RG1DE

  • Above 1.3831 bulls eye the upper 30d Bolli at 1.3899, late Jul high 1.3984

  • 55-DMA supports by 1.3728, below 10/30-DMA support by 1.3680 in focus

  • EUR/GBP slips 0.06% to 0.8428, Wed range 0.8458-25; risk bid as havens USD, JPY unwound

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 20 - 12:00 PM

MUFG maintains a bearish and short GBP/USD exposure.

"The September inflation data has been released in the UK and there has been limited reaction to the weaker than expected print... The overall annual inflation rate slowed from 3.0% to 2.9% in September with goods inflation picking up only modestly from 3.3% to 3.4% while services inflation slowed from 3.0% to 2.6%," MUFG notes.

"In addition to the weaker inflation data, the pound has other news to deal with after the COVID data yesterday revealed an alarming 233 deaths from COVID, the biggest one-day total since early March. This followed a recent pick-up in infections as well with 44,145 cases reported yesterday," MUFG adds. 

MUFG Research/Market Commentary
By Christopher Romano  —  Oct 20 - 12:40 PM
  • EUR/USD slide on Wednesday hit 1.1617 on EBS but buyers then emerge

  • Buyers appear near the 21-DMA and a rally ensues with risk-on theme

  • EUR/USD turns +ve on the day, bull tech signals get reinforced

  • Daily bull hammer forms off the 21-DMA, daily RSI turns up again

  • Rising monthly RSI, October monthly bull hammer reinforces bull signals

  • Longs set to take on Oct 19 & Sep 29 highs, 38.2% Fib of 1.1909-1.1522 drop

  • Break of those impediments puts 1.1750/60 zone, daily cloud in play

  • For more click on FXBUZ

eurusd Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 20 - 10:45 AM

Bank of America Global Research maintains a bullish USD bias into year-end.

"A synchronized sharp rise in global yields on all three historical occasions (Jun-2013, Sep-2019, Jun-2021) were driven by rising US yields amid US bond tapering or tighter US credit (Exhibit 1)," BofA notes. 

"Ahead of the next FOMC meeting in November, where the market anticipates the Fed to announce the start of bond tapering, we expect the USD to be supported and the US to continue to act as the main driver of global FX market," BofA adds. 




BofA Global Research
By Christopher Romano  —  Oct 20 - 09:42 AM

EUR/USD bounced on Wednesday after initially extending its fall from the previous session's high, with options and technicals signaling upside risks.

EUR/USD risk reversals indicate the vol premiums for puts over calls is eroding and are either neutral or only slightly in favor of puts.

The current risk reversal trend suggests premiums for calls might soon exceed those for puts.
The price action suggest EUR/USD options investors are less wary of a downside move.

Technicals continue to suggest EUR/USD faces upside risks.
The drop from Tuesday's high stalled at the 21-day moving average in Europe.
After hitting a 1.1617 low on EBS buying took hold and the pair turned positive in early New York trading.
Daily RSI is rising again and a daily doji candle formed.

Monthly tech signals reinforce the bullish outlook.
Monthly RSI is rising and not near overbought.
A monthly bull hammer candle has formed after EUR/USD rallied away from the 50% Fib of the 1.0636-1.2349 rally.

The 38.2% Fib of the 1.1909-1.1522 decline and Sept.
29 daily high remain impediments for EUR/USD longs but they look vulnerable still.
Should they break longs are set to test 1.1750/60 resistance and the daily cloud which sits near 1.1800.

For more click on FXBUZ

eurusd Click here

eurvol Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 20 - 09:30 AM

Credit Agricole CIB Research discusses the impact of shifting towards the reflation theme on G10 FX markets.

"What does the shift towards the ‘reflation’ theme mean for the G10 FX markets? The high-yielding currencies of G10 energy exporters could remain the biggest beneficiaries. The USD should be able to hold on to its recent gains vs the JPY where its yield advantage is an instrumental driver but the sizeable market longs in the currency could limit any meaningful gains elsewhere," CACIB notes. 

"The EUR and GBP could benefit from abating fears about an energy crisis in Europe. We worry, however, that too many positives are in the price of the GBP with respect to future policy tightening by the BoE," CACIB adds. 

Crédit Agricole Research/Market Commentary
By eFXdata  —  Oct 20 - 09:04 AM

Credit Suisse maintains a bearish bias on EUR/CHF targeting a move towards 1.05 over the coming weeks.

"The results of the German election have so far confirmed our base case scenario in which we saw only limited EURCHF upside. In the event, EURCHF subsequently even declined, validating our second main argument that monetary policy divergence between the euro area and Switzerland should continue to weigh on the currency pair," CS notes.

"Having narrowly missed our initial target of 1.0650, we believe that there is a risk that SNB FX intervention might be less aggressive from here and consequently could see EURCHF grinding lower to our new 1.0500 target," CS adds. 

Credit Suisse Research/Market Commentary
By Rob Howard  —  Oct 20 - 06:47 AM
  • EUR/CHF retreat from 1.0764 extends to 1.0735 EBS low on Weidmann exit news

  • See: nL8N2RG2LKnL1N2RG0QC. 1.0735 is a pip shy of Monday's EBS high

  • 1.0764 was two-week EBS high in early European trade (1.0741 was Asia low)

  • Ascent to 1.0764 influenced by rise in risk appetite (franc is safe-haven)

  • EUR/CHF plumbed 11-month low sub-1.07 last week (Oct 14) nL1N2RA0MD

EURCHF Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Oct 20 - 05:35 AM

Well-touted and large 115.00 barrier options will prove a tough nut to crack, so leaning against this level to benefit from existing defence could bring rewards if it holds. nL1N2RG0E2

Binary options might be worth considering as they only risk an upfront premium.
Those that pay a fixed amount if 115.00 holds aren't cheap however, with the premium being 38% of total payout for a one-month expiry, and 26% for two-month, although attaching a downside barrier will significantly reduce cost.

Consider a two-month expiry 115.00/110.00 Double-No-Touch (DNT) option.
Its premium is just 12.5% of total payout, so an 8:1 return if USD/JPY hasn't traded at 115.00, or at 110.00 before the Dec 20 expiry.

An additional advantage is that FX option implied volatility has risen to highs since March, making these options cheaper.
If 115.00 holds, however, implied volatility has room to ease, and lower implied volatility will increase the cost of binary options and the profit potential for those who wish to pare early.

For more click on FXBUZ

2-month USD/JPY 110/115 DNT Click here

USD/JPY 1-month expiry option implied volatility Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Oct 20 - 04:50 AM
  • 0.7481 is low for AUD/USD since it scaled 15-week peak of 0.7505 in Asia

  • Rise to 0.7505 influenced by higher Australian government bond yields

  • Investors expect RBA cash rate hikes well before 2024 nL1N2RG06C

  • AUD shorts squeezed hard during climb from 0.7226 over the past fortnight

  • Net AUD short held by IMM speculators hit all-time high in week ended Oct 5

  • See: nL1N2RE0M8. 0.7534 (July 7 high) is a resistance level beyond 0.7505

AUDUSD Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Oct 20 - 03:39 AM
  • EUR/USD 1-month expiry implied volatility backs off to 5.1 from 5.3

  • Tuesdays gains due to topside short covering amid FX gains nL1N2RF0L7

  • 1-month risk reversals retreat to 0.1 from 0.4 last week - EUR put over call

  • Retreat in EUR put premium shows pressure off downside/1.15 barrier, for now

  • Price action becomes consistent with return to range trade, lower volatility

  • 2-month expiry implied vol favoured since Fed, ECB capture nL1N2RF0H9

For more click on FXBUZ

EUR/USD 1-3 month expiry option risk reversals Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Oct 20 - 02:37 AM
  • Cable drops to 1.3781 after UK Sept CPI comes in fractionally below forecast

  • Up 3.1% YY vs 3.2% f/c nL8N2RG1FE. 1.3788-1.3814 was Asia range (pre-CPI)

  • 1.3781 is also the low water-mark since Tuesday's one-month high of 1.3834

  • Tuesday rise to 1.3834 followed hawkish shift in BoE expectations on Bailey

  • See: nL1N2RD07B. BoE rate hike expected on Nov 4 nL1N2RF0GJnL8N2RF2TE

  • 1.3765 (Monday's high) and 1.3750 (Sept 23 high) are GBP/USD support points

GBPUSD Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Oct 20 - 02:36 AM
  • USD/JPY reached new 4-year high at 114.695 (EBS) in Asia Wednesday

  • Huge option barriers and related defence make 115 hard to crack nL1N2RB0KH

  • Previous spikes above 114 in late 2017 and late 2018 failed to break 115.00

  • 114.73 was the peak in Nov 2017, not above 115.00 since March 2017

  • However, options market remains wary - Implied volatility highs since March

  • Limited option positions and short covering can fuel demand if 115 breaks

For more click on FXBUZ

JPY=EBS Click here

Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Oct 20 - 01:53 AM
  • Long upper candle shadow Tues warned of demand fade

  • However, early Wednesday and bulls are running again

  • Our 1.1633 long just on-side for 1.1745, tight stop set below 1.1600

  • Fibo retrace hurdle at 1.1670, 38.2% 1.1909-1.1522

  • 30DMA at 1.1667 and Tues high at 1.1670

  • 14-day momentum holding a flip into positive territory

  • Key support and bear trigger at 1.1572 Oct 18 low

    For more click on FXBUZ

EUR/USD Trader

EUR/USD daily candle chart: Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 19 - 10:58 PM
  • EUR/USD opened 0.2% higher at 1.1632 after topping out at 1.1670

  • After trading at 1.1626 early Asia it moved up to 1.1647

  • Heading into the afternoon it is settling around 1.1635/40

  • Resistance is a the 38.2 of the 1.1909/1.1522 move at 1.1670

  • A break of 1.1675 targets 1.1715 where the 55-day MA & 50% retrace converge

  • Support is at the 21-day MA at 1.1616 and break would ease upward pressure

  • The EUR/USD needs to break 1.1675 or risk more sideways consolidation

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 19 - 09:46 PM
  • AUD/USD at fresh 3-month high above 0.7485 - with high so far at 0.7489

  • AUD attractive on yield plays, as 10-year Aus bond yield moves above 1.80%

  • Buoyant Asian equity markets also helping to underpin price action

  • Talk of sellers ahead or 0.7500 may slow down progress, but trend is higher

  • Next resistance isn't until 0.7555/65 where the 200-day MA & fibo are found

  • Support at yesterday's 0.7407 low and 10-day MA at 0.7390

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Oct 19 - 08:35 PM

  • Steady after closing up 0.2% - stalling at 1.1669, 38.2% Sep-Oct fall

  • Germany must resist Russian 'blackmail' over pipeline - Greens nL1N2RF1UJ

  • Potential new German fin min - could signal a significant change in stance

  • Charts, 21 day Bolli bands contract, 5, 10 & 21 day moving averages conflict

  • Momentum studies climb - neutral setup suggests further choppy consolidation

  • Close above 1.1616 21 DMA targets 1.1728 upper 21 day Bolli, as in Aug-Sep

  • Tuesday's 1.1609 low and Europe's 1.1670 high initial support and resistance

  • 1.1600/15 1.022BLN and 1.1690/95 684MLN are Wednesday's close strikes

For more click on FXBUZ

eur Oct 20 Click here

Refinitiv IFR Research/Market Commentary
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