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EUR / USD
GBP / USD
USD / JPY
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EUR / CHF
EUR / GBP
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GBP / JPY
By Martin Miller  —  Oct 26 - 02:56 AM
  • EUR/USD's recovery move has been limited by the key 1.1670 Fibonacci level

  • 1.1670 Fibo is a 38.2% retrace of the 1.1909 to 1.1522 (Sept to Oct) drop

  • A daily close under kijun line, now at 1.1621, will hurt the outlook further

  • We remain long at 1.1633 hoping for much bigger gains in coming sessions

  • However, bulls really need to convincingly take out the 1.1670 Fibo

  • EUR/USD Trader TGM2334. Previous update nL1N2RK0G0

Daily Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Oct 26 - 02:09 AM
  • EUR/USD drop from 1.1670 Fibo stalls 1.1591 Mon, trades 1.1597-1.1612 Tue

  • There are 6-billion euros of option strikes expiring Tues-Fri 1.1590-1.1615

  • Related hedge flows will be larger and can help contain/support EUR/USD

  • FX also likely to be subdued ahead of ECB and its dovish potential Thurs

  • Option premiums remain on the downside, but are well below recent highs

  • Dovish risks noted, but options say any deeper declines likely a grind

  • 12 Oct lows 1.1522 lows and huge 1.1500 option barriers significant hurdles

  • Related comment nL1N2RL1EG





For more click on FXBUZ


6-billion euros of strikes around 1.1600 expire this week Click here

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

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Oct 26 - 01:35 AM
  • FX option strikes expire at 10-am New York/3-pm London - Tuesday October 26

  • EUR/USD: 1.1600-10 (1.5BLN), 1.1700 (272M), 1.1720-30 (849M)

  • GBP/USD: 1.3800 (278M). AUD/USD: 0.7400 (772M)

  • USD/CAD: 1.2300 (370M), 1.2400 (1BLN), 1.2500 (258M), 1.2550 (651M)

  • USD/JPY: 113.55-60 (626M), 113.85-114.00 (1BLN), 114.20-25 (500M)

  • 114.50 (1.1BLN)


For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Oct 25 - 11:18 PM

  • Steady, at the top of a 1.3758-1.3769 range with only modest interest

  • UK's Sunak to unfreeze public sector wages in the budget nL8N2RL5KA

  • Budget's major components appear to have all been given to the press

  • Charts; 10 & 21 day moving averages climb, 21 day Bollinger bands expand

  • Daily momentum studies conflict - bullish setup while 1.3750 10 DMA holds

  • Close below 1.3750 would target a test of 1.3653 21 day moving average

  • 1.3831, 50% of 2021 fall capped last week - break to test 1.3913 Sep high

  • Sterling vulnerable as the good news is priced in nL1N2RL2PU

    For more click on FXBUZ


gbp 2 Oct 26 Click here

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 25 - 11:12 PM
  • EUR/USD opened 0.30% lower at 1.1611 as market prices for dovish ECB

  • It remained heavy in Asia after completing bearish outside day on Monday

  • Heading into the afternoon it is just above the session low at 1.1598

  • A close below the 21-day MA at 1.1600 would add technical pressure

  • It appears a top is forming at the 38.2 of 1.1909/1.1522 move at 1.1670

  • Recent soft EZ data is hardening the view the ECB will remain dovish

  • EUR/USD may start making tracks towards the Oct 12 trend low at 1.1522

  • For more click on FXBUZ










Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 25 - 10:07 PM
  • AUD/USD traded as high as 0.7511 after getting a boost from AUD/JPY demand

  • Steady equities and commodities underpinning AUD sentiment

  • Key resistance is at the 200-day MA at 0.7561 with sellers ahead of 0.7550

  • Support is at the 10-day MA at 0.7454 and break eases upward pressure

  • AUD/USD unlikely to wander too far ahead of tomorrow Aus CPI

  • For more click on FXBUZ










aud/usd Click here

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Oct 25 - 08:16 PM

Sterling faces plenty of upcoming event risk, while most of the good news is already priced in.

The UK budget will be delivered on Wednesday, but against tradition nL8N2RL540, the government has pre-released the major components: an increase in the mininum wage to 9.50 pounds an hour nL8N2RL434, a 6 billion pound package to boost health service capacity nL8N2RK0E5, and 8 billion pounds of extra health and education spending nL1N2RJ0GN.

There is some controversy over how much of the spending is fresh money, but its early release suggests a modest sterling impact.

Money markets price in a Bank of England rate rise on Nov 4, but recent data was mixed with strong PMIsnZRN0030U9and soft retail sales nL8N2RI1F6 and consumer confidence nL8N2RH2HA. BoE rate-setter Silvana Tenreyro indicated Monday she is in no rush to raise rates, as the end of the government's furlough scheme plays out nL8N2RL4BP.

Brexit minister David Frost believes the European Union's Northern Ireland proposals don't go far enough, as the tortuous negotiations continue, with an unlikely trade war still on the table nL8N2RL55Y.

Technically the GBP/USD bias is higher, but major resistance caps and pivotal support is close.

The 1.3831 level, 50% of the 2021 fall, proved resilient resistance last week.
The 10- and 21-day moving averages climb and 21-day Bollinger bands expand - a positive setup while the very close 1.3749 10-DMA holds.

For more click on FXBUZ


gbp Oct 26 Click here

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 25 - 07:25 PM
  • EUR/USD opens 0.30% lower after completing a bearish outside day

  • Market expects no change from ECB Thursday and a relatively dovish message

  • Inability of EUR/USD to break resistance at 1.1670 discouraged bulls

  • EUR/USD is trading below the 10-day MA at 1.1617 suggesting top is in place

  • The 21-day MA is at 1.1600 and close below opens the door for move lower

  • Minor support is at the Oct 18 low at 1.1572

  • A move back above 1.1620 would ease downward pressure for now

  • For more click on FXBUZ










Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Oct 25 - 06:34 PM
  • AUD/USD opens +0.28% as AUD rose against every major currency nL1N2RL1WV

  • Firm commodity and equity priced supported risk currencies nL1N2RL0IXnL1N2RL2EZ

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

  • Key resistance is at the 200-day MA at 0.7561 with seller ahead of 0.7550

  • Support is at 10-day MA at 0.7453 and break would suggest a top is forming

  • Market will likely consolidate ahead of the key Aus Q3 CPI tomorrow

  • For more click on FXBUZ










aud/usd Click here

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 25 - 03:00 PM

MUFG Research shifts its bias on CAD from bullish to neutral in the near-term.

"Our short-term USD/CAD valuation model takes into account both short-term yield spreads and the price of oil. It provided an accurate reversal signal that CAD weakness was overshooting over the summer. CAD undervaluation has since fully reversed," MUFG notes. 

"While momentum still favours further CAD gains in the near-term, the risk/reward balance has become less favourable at current stronger levels," MUFG adds. 

Source:
MUFG Research/Market Commentary
By Randolph Donney  —  Oct 25 - 02:38 PM

  • Early USD/JPY bounce brushed back by 10-DMA and tenkan resistance

  • Down with drop in Tsy-JGB yield spreads, brief dip in S&Ps

  • But 103.505 EBS low find bids by up TL from Sept. 22 Fed-day at 113.53

  • Break and close below TL, Tues at 113.72, would target 113.21 props next

  • Market lopsided with large, late IMM spec longs nL1N2RL11F

  • Weekly charts remain top-heavy with ample space for correction lower

  • BOJ Thursday, but Fed Nov. 2-3 main focus

  • Japan elections Oct. 31 eyed for new govt, fiscal policy nL1N2RL0IN

For more click on FXBUZ


Chart Click here

Chart Click here

Source:
Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Oct 25 - 01:38 PM
  • GBP/USD ekes out 0.08% gain Monday at 1.3770, NorAm range 1.3779-1.3742

  • BoE's Tenreyro not ready to hike rates amid inflation uncertainties

  • Sterling anchored by thin daily cloud, awaits policy clarity nL1N2RL1BL

  • Close below the daily cloud (1.3778-67) diminishes bullish structure

  • Supt by 10-DMA 1.3732, Oct 18 low at 1.3710; bears in control sub 1.3623

  • Res 1.3796's 100-DMA, 1.3831 50% Fib of 1.425-1.3413, 200-DMA by 1.3851

  • EUR/GBP -0.32% to 0.8432, Mon range 0.8464-28; ECB meets Thursday

  • EUR soft ahead of ECB as Fed & BoE seen more hawkish in near-term

GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 25 - 01:30 PM

Credit Agricole CIB Research discusses the impact of the coming winter season on the JPY.

"The northern hemisphere winter could have potentially two contrasting impacts on the JPY. First, Covid, like the flu, spreads more easily when people gather in large groups indoors...One of the sources of the JPY’s recent weakness was the return of the pre-pandemic yield differentials between Japan and the rest of the G10 as investors priced in central banks (other than the BoJ) withdrawing monetary stimulus," CACIB notes. 

"The second impact comes from energy prices. Japan has the largest net trade energy deficit as a share of its GDP in the G10, so higher oil prices are a significant negative terms of trade shock for the JPY. A La Nina weather event threatens a colder-than-usual winter. But the market has to a large extent already priced a cold winter via higher oil and gas prices," CACIB adds. 

Source:
Crédit Agricole Research/Market Commentary
By Paul Spirgel  —  Oct 25 - 11:52 AM
  • USD/CAD hover near flat, +0.04% at 1.2372, Mon range 1.2388-1.2339

  • Pair tests 10-DMA/Tenkan resistance by 1.2380/84 slips a touch lower

  • Rising commods temper USD gain, BoC likely on hold expect hawkish tones

  • POLL-BoC to raise rates in Q3 next year, possibly sooner nL4N2RL37F

  • Res 1.2394's daily Tenkan, 200DMA by 1.2496, 50% of 1.2896-1.2289 at 1.2593

  • Support 1.2338 Today's low, 1.2289 Oct 21 low, 1.2238 lower 21-d Bolli

CAD Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 25 - 10:45 AM

ING Research discusses its expectations for this week's ECB policy meeting.

"The highlight of the week will be Thursday’s ECB meeting. Here the ECB will be caught between; a) acknowledging that inflation risks have increased and b) wanting to push back against market pricing of an ECB hike in late 2022. Typically the ECB would try to navigate this path by not saying to much and passing the buck to a full review coming at the December 16th meeting," ING notes. 

"So far the EUR/USD correction has stalled at resistance at 1.1670/80. Our short term Financial Fair Value (FFV) models, looking at short term yield spreads, yield curves and risk sentiment point to a 2% overvaluation of EUR/USD – largely because short-dated US yields have continued to power ahead. This time next week we would expect EUR/USD to be trading decisively under 1.16," ING adds. 

Source:
ING Research/Market Commentary
By Paul Spirgel  —  Oct 25 - 10:24 AM

Sterling remains consolidative, hovering near flat at 1.3757, as it continues to straddle the thin daily cloud at 1.3767-78, unable to break out of its wider range between the 55-DMA by 1.3721, and the 200-DMA at 1.3851.

Sterling has traded in a tight 30-pip range in early NorAm between 1.3772 and 1.3742 as traders are somewhat confounded by remarks from BoE member Silvana Tenreyro who said she was in no hurry to raise rates, while she noted the inflationary effects of supply chain disruptions and their return to normalcy is a key uncertainty for the economy.

Tenreyro's reluctance to begin rate hikes, amid recent data misses in the UK, is helping keep GBP/USD bulls at bay, as sterling remains wary of testing resistance at last week’s triple top above 1.3830.

Also coming into play is the 50% Fibo of 2021's 1.4250-1.3412 range at 1.3431, which appears to be a line that traders are unwilling to cross, even with rising hawkish BoE tones BOEWATCH.

For now, the tug-of-war between hawks and transitory inflation doves, in the U.S. and UK, is likely to keep GBP/USD anchored nearby as traders await the Nov.
3 Fed meeting and the Nov.
4 BOE meeting for clues about U.S. and UK rate liftoffs.

For more click on FXBUZ




GBP Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Oct 25 - 09:30 AM

Citi discusses its expectations for this week's ECB policy meeting on Thursday.

"We expect a slightly dovish ECB Meeting, pushing back slightly against market expectations of interest rate increases or any reconsideration of sequencing ending QE ahead of hiking rates. A dovish surprise would be to hint at extending PEPP or insist on inflation being fully temporary, and a hawkish surprise would be to view inflation as persistent, to indicate the end of PEPP or to open the way to future rate hikes or changes in sequencing," Citi notes. 

"Market implications will likely be limited, but in line with our bearish EURUSD view in the medium term. Going forward, we expect a formal tapering announcement at the 3 November FOMC meeting," Citi adds.

Source:
Citi Research/Market Commentary
By eFXdata  —  Oct 25 - 08:30 AM

Danske Research discusses the EUR outlook around ECB meeting on Thursday.

"Summing up on last week's data, we see the global economy (and Europe) as continuing to slow down and that Fed has indeed become more hawkish. Although spot EUR/USD did not move much in particular, the incoming data does continue to suggest risks are to the downside, in our view," Danske notes. 

"This week, focus will turn to ECB where we expect Lagarde to be more dovish than e.g. Fed and this may act as a short-term catalyst to take EUR/USD somewhat lower," Danske adds. 

Source:
Danske Research/Market Commentary
By Rob Howard  —  Oct 25 - 07:04 AM
  • Cable has traded a 45 pip range thus far Monday, 1.3745-1.3790

  • Those parameters are within Friday's range nL1N2RL0DV

  • Friday's low was just shy of a 23.6% Fibo support level nL1N2RL0FH

  • IMM specs flipped to net GBP long position in week ended Oct 19 nL1N2RL0CL

  • MPC dove Tenreyro to speak at 1300 GMT: 15 bps BoE hike expected next week

  • Wednesday's budget is biggest UK event risk pre-BoE MPA Nov 4 nL9N2PI02B

GBPUSD Click here

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Oct 25 - 06:13 AM
  • 1.0692 is EBS high for EUR/CHF since Friday's fall to 1.0660 (11-month low)

  • Offers may emerge around 1.07 if EUR/CHF pushes its recovery envelope

  • There is a large 1.0700 option expiry at the end of this week nL1N2RL0FA

  • Drop to 1.0660 followed Weidmann exit news nL1N2RL0GKnL8N2RG55P

  • Swiss sight deposits rose for the sixth consecutive week last week

  • A rise in sight deposits can indicate SNB intervention to weaken the franc

EURCHF Click here

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Oct 25 - 05:29 AM
  • Offers above 0.7500 are keeping a lid on AUD/USD: 0.7505 = intra-day high

  • Rise to 0.7505 influenced by rebound for iron ore and copper prices

  • See: nL1N2RL0B9nL1N2RL0BM. More AUD/USD offers tipped pre-0.7550

  • 0.7546 was 15-week high on Oct 21 (after more AUD shorts were squeezed)

  • IMM speculators cut gross AUD shorts by 11,111 contracts in week to Oct 19

  • This reduced net AUD short to 76,058 vs 89,979 all-time high 2 weeks before

AUDUSD Click here

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Oct 25 - 03:37 AM
  • GBP/USD bias remains on the upside while the 1.3734 Fibonacci level

  • 1.3734 Fibo, 23.6% retrace of the 1.3412-1.3834 rise, supports

  • Cable based on Friday at 1.3736, keeping the overall bias bullish

  • We remain long at 1.3767 for bigger gains towards our 1.3900 target

  • Bulls will likely target 200-DMA, now at 1.3851, above will accelerate

  • GBP/USD Trader TGM2338

Daily Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Oct 25 - 02:52 AM
  • EUR/USD's recent recovery move has so far been limited by key 1.1670 Fibo

  • 1.1670 Fibo is a 38.2% retrace of the 1.1909 to 1.1522 (Sept to Oct) drop

  • We remain long at 1.1633 in anticipation for bigger gains through 1.1670

  • That would unmask the 1.1716 Fibo, 50% of the same 1.1909-1.1522 fall

  • Our stop is under the daily tenkan line that is currently at 1.1600

  • EUR/USD Trader TGM2334

Daily Chart: Click here

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Oct 25 - 02:35 AM
  • FX option implied volatility heavy near pandemic-era lows

  • Low implied volatility consistent with low actual FX volatility

  • Volatility premium for downside strikes retreats from early Oct highs

  • Mild demand for 1.1700-50 strikes last week, but overall traded volumes low

  • Minimal premium for Thurs ECB, slightly more for Nov Fed, but focus on Dec

  • 2-month at a premium to 1-month since Dec ECB and Fed capture nL1N2RI15W

  • Price action remains consistent with EUR/USD trading limited/familiar range

For more click on FXBUZ


2-month EUR/USD gains over 1-month Click here

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

Source:
Refinitiv IFR Research/Market Commentary
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