• Bears looking to fade USD/JPY rebound now have a decent spot to do so

• Main down TL from March will be at 104 on Tues vs today's 103.935 EBS high

• Even a stop above last week's 104.08 high offers a tiny risk on a short

• Large and falling cloud cover further darkens the topside price outlook

• Supports, potential targets start with 103.50 kijun & Friday's 103.49 low

• The bigger pivot point is Jan. 21's 103.33 lows and pending ABC base

• Below there is support by 103, then the 102.595 trend low

For more click on FXBUZ

• Rally off Jan 18 low stalls near 21-DMA, 10-MDA gets pierced ensuing slide

• Daily RSI turns downs again while the monthly RSI falls further

• Inverted monthly hammer forming for January, bolsters bear sentiment

• Daily cloud top, 55-DMA, 1.2040/65 zone are key short-term support

• Break of those supports likely triggers stops, targets 1.1905/35 zone

• For more click on FXBUZ

• EUR/USD falls from 1.2183 (EBS) in Europe's am, NY opens near 1.2155

• Slide extends as equities, oil & global bond yields fall on risk-off

• US$ & yen bought, EUR/JPY sinks to 125.82 (EBS), EUR/USD hits 1.2116 (EBS)

• US$ bid fades slightly, EUR/USD bounces above 1.2140 late in the session

• Techs lean bearish, pair below 21-DMA, 10-DMa pierced, RSIs are falling

• More reasons for EUR/USD bulls to play defense nL1N2K017B

• For more click on FXBUZ

Bank of America Global Research discusses USD/CAD outlook and targets the pair at at 1.26 in 1Q, rising to 1.29 in 3Q, reflecting BofA's view that undershooting is set to reverse as 1H plays out.

"We see limited downside potential in USD/CAD from current levels. The broader USD has declined back to equilibrium. Oil prices have risen above our commodities research team's forecast of $47 for 2021. Global risk assets have already to a large extent priced in global recovery," BofA notes. 

"Most importantly, as 2021 plays out, US vs. CA fundamentals look unlikely to deteriorate particularly on the back of large fiscal expansion in the US, which should keep USD/CAD fair value supported near our current estimate of around 1.29. In fact, our expectation is for US-CA rate differentials to rise, provided that oil prices prove contained despite ongoing recovery. Further USD/CAD undershoot looks unjustified, rendering dips in USD/CAD unsustainable," BofA adds. 

• Bear signals intensify as AUD/USD falls below 10- & 21-DMAs

• Daily RSI implies short-term bear momentum is increasing

• Monthly RSI is close to diverging on the bull-trend high recently set

• January's inverted hammer candle reinforces bearish sentiment

• 0.7640/60 is key support, if breaks stops likely get triggered

• Break of support might cause bears to come to market & hit bids

• Tests of supports near 0.7450, 0.7350 then cannot be ruled out

• For more click on FXBUZ

Credit Agricole CIB Research discusses its expectations for this week's FOMC policy meeting on Wednesday.

"The January Fed meeting will be the main event this week with investors keen to see how the fiscal stimulus plans of the Biden administration would impact the FOMC outlook. We think that Fed Chairman Jerome Powell will continue to push against any notion of premature taper," CACIB notes. 

"That said, indications that growing government spending would represent an upside risk to the outlook could give UST yields a boost and help the USD consolidate," CACIB adds. 

EUR/USD fell on Monday after its rally off the Jan.
18 low stalled short of the 21-DMA, as bears gain traction with the help of disappointing German data and EU COVID concerns.

German Ifo business morale deteriorated more than expected, hitting a six-month low under the weight of COVID-19 restrictions nL8N2K01YW, which led German bund yields DE10YT=RR lower and euroribor prices FEIZ1 higher on the view that worsening data could force the ECB into a dovish turn.

Slow EU vaccine deployment has also put EUR/USD on defense.
AstraZeneca informed EU officials vaccine deliveries will be cut by 60% nL1N2JX274 while French health officials expressed worries about that country's COVID-19 situation nL1N2K00D1.

Technicals added to EUR/USD pessimism, with the 21-day moving average helping to cap rallies and the euro falling below the 10-DMA again.
RSI studies indicate bearish momentum is increasing as daily RSI turns down again while monthly RSI falls further from its recent peak.
January's inverted hammer candle bolsters the bearish signals.

EUR/USD bears have their sights on key short-term support around 1.2040/65, a break of which would trigger stops, increasing the chances of testing 1.1905/30.

For more click on FXBUZ

Societe Generale Research sees EUR/USD in a range trade over the near-term and likes short EUR/AUD exposure around current levels.

"EUR/USD needs to break through the end-2020 1.2215 level to make room for any further rebound, and given positioning and relative real yield moves recently, that seems a bit of a stretch. More likely the biggest FX pair trades in a range," SocGen notes. 

"It is, though, down against all the other European currencies except for the Swiss franc and the Polish zloty. Short EUR/NOK still appeals to us, and does EUR/AUD,' SocGen adds. 

Citi discusses GBP outlook and maintains a bearish bias over the medium-term.

"GBP starts the week slightly down with the dollar taking a bid during the European morning. The week ahead for GBP is quiet on the data front, and with a lack of catalysts, GBP looks to trade in tandem with broader risk," Citi notes.

"CitiFX Strategy remains bearish on GBP in the medium term. Recent price action does seem attractive, however, the team prefers to not chase current levels. A key flag is the current account deficit of the UK, which looks to widen as we head into January," Citi adds. 

• GBP/USD has traded a 58 pip range thus far Monday, 1.3666-1.3724

• Those parameters are within Friday's one cent range of 1.3636-1.3736

• Friday's high was nine pips shy of Thursday's 32-month peak

• Ascent to 1.3745 was influenced by UK's rapid COVID-19 vaccine rollout

• Risk of 'vaccine-busting' new variants prompting tougher UK border control

• See: nL8N2K02R5. Net GBP long held by IMM specs ticks up nL1N2K00BL

• USD/JPY bulls stopped in their tracks by huge technical supply nL1N2K00EJ

• USD/JPY sees a 103.68-89 range so far on Monday, meaning bias on downside

• Japanese exporter offers have continued to limited the upside

• There are said to be decent offers from Asian names circa 103.90 and 104.10

• Though dollar shorts in real danger of being crowded out nL1N2JZ0EH

• Global stocks rise on recovery hopes nL1N2K00HT

• USD/JPY, EUR/JPY relationship weak, 30-day log correlation well under +0.50

EUR/USD options are historically cheap, yet retain an upside lean that might attract bulls, especially when there's no upfront cost.

Implied volatility determines option pricing - trading near crisis lows suggests relative value.
It retains a small premium for EUR calls over puts, suggesting EUR/USD gains are deemed more likely than losses, which should lift implied volatility if EUR/USD resumes its uptrend.

Bulls might consider a three-month expiry 1.2450 EUR call for $60 pips, funded by the sale of a three-month expiry 1.1950 EUR put for $60 pips.
The 1.2450 would increase in value as EUR/USD gained, while the 1.1950 would lose value.

Another strategy would be to buy a EUR/USD call spread.
Three-month expiry 1.2300 costs $105 pips, but can be offset by selling three-month 1.2500 EUR calls in twice the amount.

Of course, such trades aren't without risk - the first if EUR/USD breaks below 1.1950, and the second sustained gains above 1.2500.
Strikes and maturities can be tailored to suit.

For more click on FXBUZ

• Scope grows for gains this week through the kijun line at 1.2202

• Spot recently left a bear trap under the 1.2064 Fibonacci level

• 1.2064 Fibo is a 38.2% retrace of the 1.1602 to 1.2349 (Nov to Jan) EBS rise

• That was followed by a daily close above the key 1.2167 Fibo = bullish

• 1.2167 Fibo is a 38.2% retrace of 1.2349 to 1.2054 January drop

• EUR/USD Trader TGM2334. Previous update nL1N2JX0EW

• OTC FX options expire at 10-am New York/3-pm London - Monday Jan 25

• EUR/USD: 1.2000 (563M), 1.2050-70 (658M), 1.2090-1.2100 (519M)

• 1.2230-40 (1.2BLN), 1.2245-55 (1BLN)

• AUD/USD: 0.7650 (1.4BLN), 0.7690-0.7700 (700M), 0.7750 (768M) 0.7800 (711M)

• USD/CAD: 1.2700 (603M), 1.2900 (536M)

• USD/JPY: 103.25 (380M)

• Option traders typically buy strikes at levels they think FX rate can reach

• 1.40 GBP call demand has picked up over recent sessions - 1-3-month expiries

• These simple options allow holders to buy GBP/USD at 1.40 at expiry

• Options can increase in value if GBP/USD, and/or implied volatility gains

• Implied volatility met demand at new long term lows last week

• Benchmark 1-month now 7.85 from a new crisis low/support at 7.5

• That's below daily historic - fair value measure nL1N2JU0MJ

  
  

  
  

• Strong close on the week and weekly bull trend defined by 10WMA, 1.3523

• Last week of the month and monthly action eyes cloud top at 1.4068

• Dailies constructive buy choppy: dip buying a strategy

• Our bid raised to 1.3640, just ahead of Frid's 1.3636 low

• Charts continue to point higher: levels above 1.40 could be seen this week

• Last week's 1.3745 high the first hurdle

  For more click on FXBUZ

  
  

• GBP/USD prodded higher Mon as investor optimism returns

• Bouyant Asia stocks lead FX traders to dump haven USD

• Bullish chart pattern about to be reaffirmed above 1.3684

• Momentum increasing with push above March 2018 bottom 1.3712

• Helped by fear of missing potential breakout above 1.3800 barrier

• Vote on Yellen for Treasury Sec ahead; US FOMC on Wed eyed

• For more click on FXBUZ

  
  

• AUD/USD opened 0.7720 and after dipping to 0.7707 it tracked higher

• E-minis (+0.44%) and AXJ equity index (+0.90%) firmed underpinned AUD

• AUD/USD traded as high as 0.7734 and was at the highs into the afternoon

• The 10-day MA comes in at 0.7733 and Friday's high is at 0.7770

• Support is at the 21-day MA at 0.7712 and bids are tipped ahead of 0.7700

• For more click on FXBUZ

• EUR/USD opened 1.2165 and traded in a 1,2161/74 range

• Heading into the afternoon it was at the session high

• EUR/USD idled while risk currencies clawed back ground lost on Friday

• EUR/USD didn't benefit from risk-on mood in Asia

• E-minis were up 0.40% while the AXJ index was up around 0.90%

• EUR/USD support at 10-day MA @ 1.2141 with key support at 55-day MA @ 1.2085

• Resistance is at the 21-day MA @ 1.2197 and break targets 61.8 fibo @ 1.2236

• For more click on FXBUZ

• GBP/USD rebuilds early Mon after significant drop below 1.3700 Fri

• Daily Bollinger uptrend channel was however kept intact

• Base of channel now props up near 1.3680, keeping bulls in control

• If GBP/USD closes below that support, capitulation likely follows

• Britain likely still long way from easing lockdown nS8N2DU0AZ

• Improvement in daily cases insufficient to let guard down nS8N2DU0B0

• For more click on FXBUZ

  
  

• Asian equity markets open modestly higher and E-minis are up 0.24%

• AUD/USD has traded to 0.7725 after trading as low as 0.7707 earlier

• AUD/JPY also 0.15% higher since Friday's close

• AUD/USD resistance is at the 10-day MA ay 0.7731 and Friday's high at 0.7770

• Support is at the 21-day MA at 0.7711 and buyers are tipped ahead of 0.7700

• For more click on FXBUZ

• USD/JPY fades to 103.76 from opening of 103.81 on EBS; flat vs Fri

• Daily Ichimoku Cloud hovering at 103.87 may be deterring longs

• Should help deflect from Bollinger uptrend channel at 103.97

• Nikkei recovering from mild losses, now flat; S&P futures +0.2%

• IOC affirms Olympics will go ahead in Tokyo July-Aug nL4N2JX3TF

• plans to vaccinate every Olympian fore Tokyo games nFWN2JX0VH

• For more click on FXBUZ

  
  

• AUD/USD traded around 0.7720 at the open after closing Friday at 0.7713

• AUD/USD fell 0.66% on Friday as risk currencies slipped with risk assets

• Risk assets came under some pressure due to concerns related to coronavirus nL1N2JX2NG

• Support is at the 21-day MA at 0.7711 with buyers tipped ahead of 0.7700

• Resistance at the 10-day MA @ 0.7731 and break would ease downward pressure

• Direction will be influenced by E-mini futures and Tokyo AUD/JPY flows

• For more click on FXBUZ

• USD spec short positioning increased in Jan 13-19 period

• EUR specs were relatively heavy buyers long rises 7,576 contracts to 163,466

• EUR net long now 53% of total positioning; long component at 237k contracts

• JPY specs sold 506 contracts now long 50,014, JPY fell 0.13% in period

• GBP specs +763 contracts long grows to 13,705; Brexit, neg rate fears ebb

• AUD, CAD specs reduced longs near recent multi-yr highs; NZD specs +1,276