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By Peter Stoneham  —  Aug 11 - 05:45 AM
  • Dollar unable to shake off CPI disappointment: yen benefiting

  • Yen can't shake off central bank divergence: direction clouded

  • Technically, charts may hold clues for near-term direction

  • Back to back bear sessions have brought a key support point into play

  • The daily Ichimoku cloud base has supported the dollar since Sept 2021

  • Cloud base line is currently at 131.69: breaches seen but no close below

  • While above the base dip buyers likely to stall the fall

    For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Aug 11 - 04:40 AM
  • Constructive dailies but price still below key resistance

  • Daily cloud top at 1.2272 and Aug 1 high at 1.2277

  • Today's support levels to watch: Daily cloud base and 10DMA, 1.2171-1.2158

  • Despite the bid tone, while below the cloud top, downside risk remains

  • Weeklies forming a bullish engulfing candle: could support bullish cause

  • We lean slightly bullish but need stronger bullish confirmation

    For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Aug 11 - 03:45 AM
  • Aug 10 EUR/USD rocketed far above top 20-day Bollingers and snapped back

  • Aug 11 EUR/USD has risen back above the peak of the bands

  • This may be an opportunity to sell nL1N2ZN0DD

  • From a longer-term perspective rally isn't stretched

  • Mid-point 20-week bands is 1.0515, base 20-month is 1.0143

  • However, there are many short-term traders so daily chart matters

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Aug 11 - 03:35 AM
  • EUR/USD jumped to 1.0369 in the wake of CPI data from 1.0202 low

  • Big rally revealed a strong will to buy

  • Bull camp need more inspiration and techs are most likely source

  • EUR/USD peaked ahead 55-DMA at 1.0373 and fell to 1.0276

  • Pair has rallied since the arrival of European traders reaching 1.0325

  • Break beyond 55-DMA and daily cloud 1.0420-66 should excite

  • Options provide cautionary note with vols sinking nL1N2ZN0AQ

  • Options suggest pair will not break resistance, counter traders may profit

Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Aug 11 - 02:05 AM
  • Wed action stalled a pip shy of a 50% Fibo, 1.0787-0.9952

  • Pullback from the 1.0369 high has not negated the tentative upswing

  • We bid by 1.0270 for another run above 1.0300

  • Daily bull momentum has increased but not significantly

  • Daily RSI remains flat at neutral levels

  • However, still potential for the Wed upside range break to extend

  • Levels to watch for the Thursday session: 1.0123 and 1.0370, both 50% Fibos

    For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Ewen Chew  —  Aug 11 - 01:25 AM
  • AUD/USD turns lower, last 0.7066 from Thurs peak 0.7095

  • Reversal hints at failure to cross 100 DMA 0.7088

  • Confirmation that resistance has held will weaken bulls

  • Pullback may extend if 38.2% Fibo support 0.7056 breaks

  • May cue bailing of AUD/USD longs betting on slower Fed hikes

  • Several Fed members reiterated hikes to continue nL1N2ZN06B

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Aug 10 - 11:55 PM
  • EUR/USD opened +0.84% at 1.0299 after rising in softer than expected US CPI nL1N2ZN02I

  • After trading 1.0303 it drifted lower as USD clawed back some ground in Asia

  • EUR/USD eased to 1.0282 before settling around 1.0290 into the afternoon

  • EUR/USD resistance is at 50% retracement at 1.0369 and 55-day MA at 1.0373

  • Resistance was validated by yesterday's 10369 high and subsequent pullback

  • Bids are eyed ahead of 1.0250 and support is at 10-day MA at 1.0225

  • EUR/USD rally may be a seeling opportunity based on fundamentals nL4N2ZN06A

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Aug 10 - 09:45 PM

The softer than expected U.S. CPI sent EUR/USD above the three-week 1.0100/1.0300 range and forced out weak longs nL1N2ZM1U0.
But the elevated levels may present an excellent selling opportunity for those still looking for sub-parity over the coming weeks and months.

The fundamental backdrop remains bearish, even if hawkish Fed expectations are slightly scaled back.
The euro zone economy continues to face challenges that include potential energy supply disruptions nFWN2YM0I8 along with geopolitical and fragmentation risks nL4N2ZH47RnL1N2Z21AZ.

The U.S. economy, on the other hand, appears to be in a healthier state, as the U.S. labour market remains extremely strong nL1N2ZG2G3, while there is building evidence that inflationary pressures may be easing nL1N2ZL0KI.

Despite the below-forecast U.S. CPI, Fed officials were quick to point out that their inflation fight was far from over.
Minneapolis Federal Reserve Bank President Neel Kashkari on Wednesday reiterated his view that the U.S. central bank would need to raise its policy rate another 1.5 percentage points this year and more in 2023 nL1N2ZM1YK.

The EUR/USD rally was capped at the 50% retracement of the decline from May to July at 1.0369.
The 55-day moving average, which has capped rallies since June 9, is right behind at 1.0371.
Selling EUR/USD rallies with a stop-loss above 1.0375 is the favoured strategy for bears.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Aug 10 - 08:55 PM

  • Steady after bouncing 0.85% on the softer than expected U.S. CPI

  • German government struggles with measures to help economy nL8N2ZM2T0

  • Most governments in Europe are facing a similar dilemma to Germany

  • 5, 10 & 21 day moving averages rise with the daily momentum studies

  • 21 day Bollinger bands head higher - topside bias after range break

  • 1.0369, 50% May-July fall capped - break would target 1.0468 61.8%

  • Close below 1.0195 21 DMA a base in August would end the topside bias

  • 1.0275/80 548 mln, 1.0300 590 mln are Thursday's close strikes

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Aug 10 - 07:40 PM

  • Steady after jumping 1.2% against the softer USD after lower U.S. CPI

  • BoE's Pill says rate hikes won't hit economy until late 2023 nL8N2ZM6JE

  • UK housing soft on higher interest rates and cost of living nL8N2ZM6QC

  • Charts - positive daily momentum studies, 5, 10 & 21 DMAs head higher

  • 21 day Bollinger bands climbed - bounce turned technical outlook to positive

  • 1.2291 August high then 1.2320, 61.8% May-July fall are initial resistance

  • Close below 1.2077 rising 21 day moving average needed to end topside bias

  • 1.2110-1.2277 NY post CPI range is initial support and resistance

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Aug 10 - 07:10 PM
  • EUR/USD opens +0.84% after USD slid in the wake of softer US CPI nL1N2ZM1U0

  • Break above top of recent range (1.0294) sent EUR/USD to 1.0369

  • The 50% of 1.0787/0.9952 at 1.0369 validated by subsequent pullback

  • More resistance is at the 55-day MA at 1.0373

  • EUR/USD opens just above recent range high at 1.0297, which is support

  • EUR/USD trending higher with 5, 10 & 21-day MAs in a bullish alignment

  • A break below the 10-day MA at 1.0226 would warn of false break

  • Key will be the shaping of Fed expectations ahead of Sep 21 FOMC

  • After softer US CPI market priced out chance of a 75 BP hike in September

  • Fed officials still vigilant on inflation pressures nL1N2ZM1YK

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Aug 10 - 06:35 PM
  • AUD/USD opens +1.71% after softer US CPI sent USD reeling and risk assets skyward nL1N2ZM1U0nL1N2ZM2LTnL1N2ZM0IJ

  • AUD and NZD were the best performing currencies on Wednesday

  • AUD/USD broke and closed above strong resistance at 0.7045/55

  • It traded above the 100-day MA at 0.7092, but didn't close above

  • The 100-day MA descends to 0.7087 with next resistance @ 200-day MA @ 0.7152

  • Not far above is the 50% retracement of the year's high/low at 0.7171

  • Support is at former resistance at 0.7045/55

  • AUD/USD trending higher with the 5,10 & 21-day MAs in a bullish alignment

  • Key in Asia will be reaction in Asian equity and commodity markets

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 10 - 03:00 PM

Goldman Sachs maintains a bullish bias on the USD targeting a re-test of parity in EUR/USD over the coming months.

"Our economists still think a step down to 50bps is most likely at the next meeting, but see risks that rate hikes could be more frontloaded. But, with the market still pricing cuts next year, the bottom line is that we still see upside risks to inflation and policy pricing over the next few months," GS notes. 

"Overall, we continue to see upside risks to real yields in the US, and downside risks for the ECB. As a result, we think EUR/USD can re-test parity in the months ahead," GS adds. 

Goldman Sachs Research/Market Commentary
By Randolph Donney  —  Aug 10 - 02:40 PM

  • USD/JPY tumbled with Tsy yields after below-f/c US CPI readings

  • Prices neared daily cloud base at 131.685 before bouncing with Tsy yields

  • Fed's Evans nL1N2ZM1OC and Kashkari nS0N2YH091 reaffirmed rate hikes

  • These dovish Fed officials talked about 4% or more Fed funds by end-2023

  • Fed may be dissuading the initial CPI yield drop and surge in stocks

  • USD/JPY longs looking for less bearish mkt responses to Fed nL1N2ZM1HM

  • Tsy yields well off Wed's lows, avert test of crucial 100-DMA at 131.14

  • Hasn't been a sub-cloud and 100-DMA close since last Sept

  • Lots of US data before Sept Fed, but bulls need durable Fed hike pricing

  • USD/JPY's below level before the June 75bp hike, big drop from July high

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Aug 10 - 01:40 PM
  • GBP$ holds gains into NorAm close +1.4% at 1.2250; Wed range 1.2277-1.2066

  • Pair soared post-CPI under f/c; HL CPI y/y 8.5% vs 8.7%, core 5.9% vs 6.1%

  • Bulls bet Fed pivots to lower rate path; Sept +75bp odds dip from 70% to 37%

  • Room for GBP$ to run after regaining 1.22 on US inflation dip nL1N2ZM145

  • RES at upper 30d Bolli 1.2276, daily cloud top 1.2325, June 16 high 1.2405

  • Support at 10-HMA 1.2185, daily cloud base 1.2175, fmr res 10-DMA at 1.2156

  • Focus shifts to Aug 12's UK GDP for hints at strength of UK recovery

  • Rising rate's in response to BoE inflation f/c +13% by fall may temper growth

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 10 - 01:30 PM

MUFG Research maintains a bearish bias on GBP over the coming weeks.

"The BoE is forecasting GDP contraction for five consecutive quarters commencing in Q4 2022 and the baseline assumptions do not assume energy supply restrictions that result in blackouts and potentially major disruptions so we’d expect this story if confirmed to undermine confidence in the outlook for growth even further," MUFG notes. 

"The pound is the 2nd worst performing G10 currency so far in August and we see no reason for that performance to change over the coming weeks," MUFG adds,. 

MUFG Research/Market Commentary
By Christopher Romano  —  Aug 10 - 12:05 PM
  • AUD/USD overnight dip near the daily cloud base, buyers emerged

  • Pair then rallied above the 10- & 55-DMAs, got a big boost after US CPI

  • US$, interest rates fell sharply after downside surprises to July CPI

  • AUD/USD spiked up, broke the 61.8% Fib of 0.7282-0.6683, hit a 2-month high

  • Technical signals suggest AUD/USD dip buyers may see much bigger gains

  • Daily, monthly RSIs rising & not overbought, pair above the daily cloud

  • August monthly bull hammer candle follows July's monthly bull hammer candle

  • A test of the June monthly high at 0.72825 cannot be ruled out

  • Break of that high implies te4st of 0.7480/0.7550 resistance may be due

  • For more click on FXBUZ-

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

Credit Suisse discusses its EUR/USD and AUD/USD medium-term targets. 

"As our base case equates with higher US rates and likely higher implied volatility at least for equities, the core underlying premise of USD strength we still subscribe to would get a fresh lift. But with more CPI and employment data prints due ahead of 21 Sep, we doubt this leads to a decisive situation where key supports such as EURUSD 1.0000 and USDJPY 140.00 (our current target) are breached over the course of this month," CS notes. 

"Our medium-term targets such as EURUSD 0.9700 and AUDUSD 0.6550 likely need more supportive catalysts over the course of September before they can be realised," CS adds.

Credit Suisse Research/Market Commentary
By Paul Spirgel  —  Aug 10 - 10:05 AM

GBP/USD vaulted higher on Wednesday after U.S. headline and core inflation undershot forecasts, pushing cable above the 10- and 55-day moving averages and allowing traders potentially to target the 30-day Bolli at 1.2272 and early June highs by 1.2292.

The CPI data tempered the markets' view of the Fed's near-term rate path, weighing on the dollar, and could lead to talk of a U.S. rate pivot, possibly fueling further cable gains away from 2022's mid-July low at 1.1761.

Sterling rallied from NorAm open lows by 1.2094 to 1.2237, and traders may aim for the June 16 high at 1.2405 and the June 7 high at 1.2600 if they overcome the upper 30-day Bolli and early June highs.

However, they must contend with UK-specific headwinds, including Britain's complicated growth-inflation picture.
Should UK inflation -- due out on Aug.
-- continue higher, as the BoE expects, growth uncertainties may temper further GBP gains despite the possibility of a converging rate path with the U.S.

Also, the U.S. inflation report is just is just one data point, and rising U.S.
earnings and wages may keep price growth elevated.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 10 - 09:30 AM

Bank of America Global Research discusses USD/JPY technical outlook and flags a H&S top in the making.

"July price action was also necessary to show whether a "counter trend" top was forming that could postpone secular upside to 150+. Potential for such a top increases as USDJPY turns down from resistance in the 135s to begin forming the right shoulder of a head and shoulders top," BofA notes. 

"The neckline of the top is far away when compared to BBDXY and muddied with clustered support levels like 131.60, 131.35 and 130.41. However below the magenta cloud line at 131.68 will begin to confirm a top. For what it's worth, if this is a top then it measures down to 124.00," BofA adds. 

BofA Global Research
By eFXdata  —  Aug 10 - 09:02 AM

CIBC Research discusses its reaction to today's US CPI print for the month of July.

"US CPI inflation is over the hump and while core inflation is still too hot, the negative surprise will likely provide some relief for the Fed. Total CPI stalled in July with no month-over-month increase, leading the annual rate to decelerate 6 ticks to 8.5%, below consensus expectations of 8.7%. The slowdown in gasoline prices was offset by increases in food and shelter prices. Core inflation maintained some of its momentum to post a 0.3% advance on the month (vs 0.5% consensus). Shelter prices were once again a major contributor as rent and owners’ equivalent rent, which together represent a huge share of core CPI, continued to climb. Meanwhile, airfare, used cars, communication and apparel prices all declined on the month," CIBC notes.

"Overall, the annual rate for core inflation remained at 5.9%, below consensus expectations of 6.1%. While this release was better news than anticipated, given the strong payroll numbers and the momentum in core inflation, the Fed should still be on track for a 50 bps increase at its next meeting," CIBC adds.

CIBC Research/Market Commentary
By Jeremy Boulton  —  Aug 10 - 07:50 AM
  • EUR/GBP rises to 0.8469 challenging 100-DMA at 0.8470

  • EUR/GBP likely to gravitate towards Aug 17 cloud twist at 0.8547-51

  • Pair approaching the objective for minimum tech correction June-Aug drop

  • 38.2% 0.8721-0.83405 decline is 0.8486, 50/61.8% are 0.8531/0.8576

  • Given influence of twists worth note monthly cloud twists 0.8875 in Dec

Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Aug 10 - 07:20 AM
  • Overnight AUD/USD dip stalls near the daily cloud base, 0.6947 hit

  • Buyers emerge & bounce ensued as US$ sold broadly, 0.69785 traded

  • USD/CNH drop below 6.7570, equity ESv1, copperHGv1 gains aid lift

  • AUD/USD climbed back above the 10- & 55-DMAs, is near flat in early NY

  • Daily & monthly doji candles in place, suggest investors are indecisive

  • US July CPI risk due, a downside miss could sink US$, rally AUD/USD

  • AUD/USD longs may then test key resistance in the 0.7050/70 zone

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Aug 10 - 04:40 AM
  • Supported above its daily Ichimoku cloud USD/JPY set to climb

  • Cloud top today at 134.25 vs initial res. at 135.58, Aug 8 high

  • Main bull hurdle at converged 21-30DMAs, 135.75-81: 61.8% Fibo 135.95

  • Dollar's big yield advantage over the yen set to grow

  • CB policy divergence unlikely to change anytime soon

  • Also note a significant reduction in USD/JPY bull bets

  • The net long position was USD 11.5 bln in May, now just USD 4 bln

    For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
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