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By eFXdata  —  Feb 21 - 01:15 PM

CIBC Research discusses AUD outlook and adopts a neutral bias over the coming weeks. CIBC targets AUD/USD at 0.67 by end of Q1 and at 0.68 by end of Q2.

"The combination of the bushfires and coronavirus fears saw AUD/USD fall over 5.0% from the highs seen at the beginning of this year. This month, AUD/USD pared some of those losses, as the initial shock of the virus has now calmed. In addition, the RBA policy decision was less dovish than the market expected, with the Bank reiterating that it was comfortable remaining on hold for now. Rate cut expectations were postponed from Q2 2020 to Q4 after the meeting, thereby establishing a bottom for the currency," CIBC notes. 

"We caution that there are near-term headwinds facing the AUD, especially as the full ramifications of the coronavirus and the bushfires are not yet known. We remain neutral on the AUD in the coming weeks, as we wait to see how these events feed through to hard data," CIBC adds. 

CIBC Research/Market Commentary
By Randolph Donney  —  Feb 21 - 02:45 PM

The overbought dollar nL1N2AL0IO took a beating in a selloff triggered by news that U.S. services PMI nL1N2AL0SN slipped into contraction and manufacturing growth fell.
Above-forecast euro zone PMIs were already helping a EUR/USD rebound after long-term tech support held Thursday’s 34-month low.
Adding to the dollar's woes, Treasury yields plunged -- including 10s dropping below key support at 1.5% and nearing September’s trade-war nadir, 30s' record low and money markets ramping up expected Fed rate cuts for July instead of September.
A second cut is more than priced in by January 2021.
Before the PMI miss, falling Treasury yields were viewed as dollar supportive, driven by global demand for the relatively high-yielding paper backed by an outperforming economy, and as the coronavirus fallout was being dealt with.
Global investors now need fresh reassurance in upcoming data, particularly from February.
Overbought USD/JPY was already starting to correct part of February’s 3.6% gains after Thursday’s high stopped short of 2019’s 112.40 peak and after news that Japan’s PMI fell the most in seven years.
The lack of expected rate cuts by the BOJ in response to growing recession threats and its containment of 10-year Japanese yields reduces the allure of JGBs and the yen as a haven compared with positive-yielding Treasuries and potential capital gains in U.S. government bonds during financial stress periods.
On the PMI surprise front, the UK’s manufacturing beat, combined with the poor U.S. result, sent cable back above the 100-DMA it broke below this week.
The broader USD index was down 0.57% in late New York, off Thursday's 34-month high and back below last year’s peak.
USD/CNH gave back modest overnight gains.
In coronavirus developments, an upward revision to the Feb.
19 Hubei cases increase from 349 to 775 and cautious words from the head of WHO hurt risk heading into the weekend, a long one for Japan.
Tumbling Treasury yields and risk-off flows sent gold up 1.5% last to its highest since February 2013.
Silver gains trailed behind, as did copper.
Oil recovered most of its intraday losses, helped by the Saudis debunking stories about possibly separating from the OPEC+ group that has been trying to bolster prices with production cuts.
The G20 meeting this weekend may produce some headlines, but the focus will remain on COVID-19 news.

Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Feb 21 - 01:15 PM
  • GBP firm into NY close +0.71% at 1.2970; NorAm range 1.2977-25

  • Pair lifted after UK PMI beat nL8N2AL2XW, higher still after US PMI misses

  • Sterling enjoys PMI lift, even if Brexit gloom looms nL1N2AL0P1

  • GBP/USD probes abv 100/10-DMA (1.2961/68), eyes 55-DMA 1.3059

  • Despite UK data beats UK rates seen -25bp by YE '20 BOEWATCH

  • EUR/GBP -0.07% to 0.8367, Fri range0.8384-46; weak US PMI's drive USD. UST yields broadly lwr

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 21 - 11:45 AM

ANZ Research discusses AUD outlook and adopts a mildly bearish bias over the coming week, and a mildly bullish bias over the coming month.

"The AUD has fallen to a multi-year low, as growth differentials and concerns over the global growth outlook weigh. Asset prices and sentiment, more broadly, remain elevated, despite mounting risks as the spread of COVID-19 is scrutinised. While the aggregate numbers have been positive, isolated pockets of contagion are more worrisome and pose further downside risks to growth. We continue to favour defensive positioning as the growth outlook frays," ANZ notes. 

"In the current environment, AUD will remain a liquid proxy for global risk, as markets assess the impact of COVID-19," ANZ adds. 


ANZ Research/Market Commentary
By Paul Spirgel  —  Feb 21 - 10:35 AM

Sterling bulls received encouragement from UK flash PMI data nL8N2AL2XW, though they still face a tough slog through the uncertainty of post-Brexit trade talks with the EU.
Particularly helpful was the forecast-beating manufacturing PMI, which helped GBP/USD rally off lows at 1.2885 to highs by 1.2958 after the weak U.S. PMI release.
Still, the possibility of London and Brussels failing to reach a trade deal by the Dec.
31 deadline remains a headwind for GBP/USD, which could keep the BoE from considering rate hikes, especially with global growth confronted by the macro challenge of the coronavirus outbreak.
The shallow rise off 2020 lows, particularly in light of the recent slew of UK data beats, highlights GBP/USD's generally offered tone.
Today's rise may be profit taking after this week's fall from Monday's 1.3045 high.
Bears remain in control below the 55-DMA at 1.3058 with bulls gaining momentum above 1.3210 the Jan. 31 high.
The risk remains that the recent upbeat data was a result of post-election and Brexit euphoria, which may dissipate and leave GBP/USD at the mercy of trade negotiations and the deteriorating global growth outlook.

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 21 - 09:20 AM

TD Research discusses the current market conditions and looks to fade the rally in USDJPY and look to sell into EURUSD rallies ahead of 1.10.

The coronavirus impact has altered and muddied the global growth story for perhaps the full first half the year. Still, there's a massive gap between what high-frequency data and financial conditions project for the global economy. The truth lies somewhere in the middle. For now, risk markets should remain on edge into Super Tuesday, as markets start to grapple with the Bern factor," TD notes. 

"The USD should remain upbeat but looks vulnerable over the next two weeks on month-end and US political risks. Still, that's just another reason to fade the rally in USDJPY and look to sell into EURUSD rallies ahead of 1.10," TD adds. 

TD Bank Research/Market Commentary
By eFXdata  —  Feb 21 - 08:26 AM

 UOB Research discusses USD/JPY technical outlook and flags a scope for a move towards 113.30 in the near-term.

"From here, all eyes are on the solid mid-term resistance at 112.40. A break of this critical level could spur further USD gains towards 113.30 in the coming days," UOB notes. 

"Only a move below 111.20 (‘strong support’ level was at 110.30 yesterday) would indicate that the current rally has run out of gas," UOB adds. 

UOB Research/Market Commentary
By Christopher Romano  —  Feb 21 - 07:45 AM
  • AU Feb. composite PMI 48.3 from 48.6, AU yields fall, AU-US spreads widen

  • Concerns for econ growth on Covid-19 spread keep US$ bid nL1N2AK1YO

  • AUD/USD hits a new trend low, nears 0.6585 before meagerly bouncing

  • March 17 & 18, 2009 daily lows (0.6566) are support which remain threatened

  • Talk of corporate buying helping to slow AUD/USD slide but bears still reign

  • Daily, monthly RSIs imply the downside momentum remains intact

  • 0.6566 break targets 0.6510/30 zone, 0.6400/15 zone is targeted thereafter

chart: Click here

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Feb 21 - 05:45 AM

After trading in a 1.09-1.12 range for months, the recent drop in EUR/USD is at least a move into a lower range, but it might be the beginning of a much deeper decline nL1N2AL05A.
Chances are good the pair will settle into a lower range.
The downtrend has been defined by a series of falling 300-pip ranges from 1.15-18 since October 2018.
If that continues, then EUR/USD might settle somewhere close to 1.07-10 short-term.
Rallies are likely to hold below the 21-DMA at 1.0935 and psychologically important 1.1000 mark.
For the downtrend to continue, the pair shouldn't close back over the 200-DMA at 1.1105.
Volatility has risen but remains low enough to support a gradual decline.
That said, there's the issue of the break of a key Fibo at 1.0863.
The drop below this mark suggests the entire rise from 1.0340 will unravel.
Whether that happens gradually or whether vols rise is open to debate, but a bigger drop is likely.

EURUSD: Click here

EURUSD weekly: Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Feb 21 - 04:20 AM
  • Cable eyes 1.2925 after extending north from 1.2849 pre-UK PMIs at 0930GMT

  • 1.2925 was high after UK retail sales data beat/38.2% Fibo of 1.3049-1.2849

  • 1.2849 = 12-week low Thursday as USD index rose to a new 33-month high

  • Resistance levels beyond 1.2925 include 1.2949 (Feb 13 low) and 1.2971

  • 1.2971 was Tuesday's low. UK mfg PMI f/c 49.7, service PMI f/c 53.4

  • EUR/USD up to 1.0820 (EBS high) after German mfg PMI beat nZRN0007ZC

GBPUSD: Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Feb 21 - 03:30 AM
  • AUD/USD hits 0.6586 after breaking below 0.6592 (Asian session base)

  • 0.6586 is the lowest level since March 2009 (0.6285 was low that month)

  • Coronavirus concerns are helping weigh on the risk-sensitive AUD

  • South Korea reports 52 new cases, takes national total to 156 nL4N2AL02N

  • Kospi closed down 1.49% nAZN21MD00. AUD/USD bear targets include 0.65

  • 0.6611 (Thursday's low) is now a resistance level. 0.6624 was Asia high

AUDUSD: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Feb 21 - 02:20 AM
  • Options expire 10-am New York/15.00GMT - big strikes often attract

  • EUR/USD: 1.0740 (230M), 1.0845-55 (840M). EUR/GBP: 0.8325-35 (290M)

  • USD/JPY: 112.00 (875M). AUD/JPY: 73.40 (306M). USD/CHF: 0.9850 (410M)

  • EUR/JPY: 118.00 (1.1B), 119.15 (284M), 120.00 (360M), 121.00 (380M)

  • USD/CAD: 1.3150 (520M), 1.3250-55 (921M), 1.3270 (370M), 1.3280-85 (568M)

  • AUD/USD: 0.6670-80 (641M), 0.6700 (364M)

  • NZD/USD: 0.6440 (245M), 0.6600 (516M). Options Maturity Calendar: TGM2369

Bubble Expiries Chart: Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Feb 20 - 10:25 PM
  • +0.1% in a 2.2880-1.2895 range, with light flow, focus on Asian currencies

  • POLL - goods trade deal likely, 'hard' EU exit at 25% from 20% nL8N2AJ3ET

  • Flash UK PMI's for February significant event risk, see chart for poll

  • Lower 21 day Bolli a base yesterday - comes in as 1.2840 support today

  • Charts - momentum studies, 21 day Bolli bands, 10 & 21 DMAs edge lower

  • Bearish setup targets support at 1.2822, the range base in late November

  • 1.2849 NY low and 1.2925 London post data bounce, support-resistance

ukd feb 21 Click here

gbp 3 feb 21 Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 20 - 02:30 PM

CIBC Research discusses CAD outlook and now expects USD/CAD to trade around 1.32 by end of Q1 before moving towards 1.34 by end of Q2.

"If fears abate and sentiment eventually improves in the next few months, oil prices should rebound and the loonie will likely be dragged along for the ride. As such, the C$ should end Q1 slightly stronger than its current level, seeing USDCAD hover around 1.32. However, that rebound will likely be short-lived, as softness in GDP growth continues and strength in the labour market wanes accordingly," CIBC notes. 

"Moreover, that will likely be compounded by the repercussions of the coronavirus on global supply chains and production, and potentially current rail disruptions. That could be enough reason to see the Bank of Canada cut interest rates by 25 bps in April. Given that such a move is not currently priced into markets, that surprise would take a bite out of shortterm rates and send the currency weaker, with USDCAD reaching 1.34 by the end of Q2," CIBC adds.  

CIBC Research/Market Commentary
By John Noonan  —  Feb 20 - 10:20 PM
  • EUR/USD opened 1.0784 and traded in a 1.0784/93 in Asia

  • Talk of option barrier at 1.0775 discouraged fresh selling

  • Asia turned risk-off late morning, but had no impact in EUR/USD

  • Resistance at 10-day MA at 1.0838 and break could spark small correction

  • Trend indicators still pointing lower, as USD strength broadens

eur/usd Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Feb 20 - 09:45 PM
  • Risk assets turned decidedly negative on coronavirus and global growth fears

  • No single news item behind risk selling, as was the case during US session

  • AUD/USD below 0.6600 - trading down to 0.6592 for a fresh 11-year low

  • S&P futures down 0.37% while AXJ equity index down 0.80%

  • There isn't any technical support in the AUD/USD within 200 pips

audusd Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Feb 20 - 08:20 PM
  • AUD/USD better bid this morning after yesterday's 1.0% tumble

  • Talk of buyers ahead of 0.6600 discouraging fresh selling

  • Sentiment bearish as strong USD, coronavirus fears and domestic data weigh

  • Sellers tipped around 0.6650 with resistance at former trend low at 0.6657

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Feb 20 - 01:25 PM
  • GBP/USD off new 2020 low, ends NY 1.2875, NY range 1.2888-49 nL1N2AK17V

  • Broad USD bid sinks pair; EU-UK trade, upcoming budget uncertainties loom

  • UK retail therapy fails Brexit-beleaguered sterling nL1N2AK0RP

  • Below 2020 low 1.2849 support at 1.2769 Nov 8 low, 1.2694 200-DMA

  • Bears in control sub-55DMA 1.3062; bulls in control abv 1.3210, Jan 31 high

  • EUR/GBP +0.24% to 0.8382, Thurs range 0.8415-0.8358; EUR buying vs GBP, JPY retards EUR decline

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 20 - 01:00 PM

Citi discusses Gold prices and notes a setup in options markets reminiscent to 2010/2011 when Gold last traded to $1,800-1,900/oz before declining through 2015.

"Cit analysts point to the set-up in Gold options markets and call skew as being reminiscent of 2010/2011, when Gold last traded to $1,800-1,900/oz. Meanwhile, gold net long positioning—when normalized for the expanded asset base—is at only half the levels of the 2011 peak. Slowing physical demand in Asia, especially jewelry sales, which still take down ~45% of annual world supply, is a bearish risk for bullion," Citi notes. 

"But investor inflows and central bank gold buying are significant buffers for gold consumption and more importantly, the gains in Gold come even as the USD continues to strengthen (breaking the inverse correlation between Gold and USD)," Citi adds. 

Citi Research/Market Commentary
By Christopher Romano  —  Feb 20 - 01:20 PM
  • Pair heavy early but filled gap, 1.0775 barrier drive a bounce nL1N2AK0KH

  • EUR/JPY rally lifts EUR/USD near 1.0820, daily techs warn shortsnL1N2AK0SR

  • Sellers take over again as EUR/JPY gains erode, pair near 1.0795 late

  • Meager bounce after gap filled should concern EUR/USD longs nL1N2AK0YS

  • Daily doji forms, investors indecisive ahead of key PMI data on Friday

  • If PMI is downbeat EUR/USD bears are likely to take greater control

chart: Click here

Refinitiv IFR Research/Market Commentary
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