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By Rob Howard  —  Nov 14 - 02:30 AM
  • Cable slides to 1.2675 as dollar adds to gains, courtesy of "Trump trades"

  • 1.2675 is lowest level since Aug 8 (1.2666 was low that day)

  • Republicans win majority of House seats in government sweep, Edison projects

  • 1.2700 (ex-support point) and 1.2719 (Tuesday low) are now resistance levels

  • Trump's Treasury pick: Lutnick now a top contender alongside Bessent

  • BoE's Bailey and UK finmin Reeves to speak at Mansion House tonight (GMT)

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Nov 13 - 10:10 PM
  • AUD/USD down 0.2% in Asia as USD extends gains and U.S. yields rally

  • Drops to lowest since Aug 5 as commodities slide, China concerns persist

  • CNY drops to 3-month low despite PBOC dampening fix, copper hits 2-month low

  • Australia's employment growth slows but no rate cuts expected until mid 2025

  • RBA's Bullock says policy will stay restrictive until confident on inflation

  • 0.6489 support break has increased likelihood of ratchet to 0.63485-0.63625

  • Minor supports 0.6465-70,0.6440, 0.6410-15; Resistances 0.6515-20, 0.6545-50

  • Fed Chair Powell participates in Dallas event Wed; Asia range 0.64995-0.6471

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 13 - 04:30 PM

Synopsis:

MUFG views the early German election date as a potential positive for the EUR outlook. A December 16 confidence motion will likely set an election for February 23, ending Germany’s political uncertainty sooner than anticipated. A potential CDU-led coalition is seen as market-friendly, potentially supporting EUR, but external USD strength and US policy shifts remain influential.

Key Points:

  1. Early Election Date: Germany’s power vacuum may end sooner with a scheduled election on February 23, if the government loses the December 16 confidence vote.

  2. CDU’s Market-Friendly Appeal: Polls favor the centre-right CDU, which may attract business-friendly policies. A stronger CDU showing in the polls is anticipated to bolster market sentiment for EUR.

  3. Challenging Economic Backdrop: The German ZEW Survey of Current Conditions fell to -91.4, its lowest since 2020, reflecting the need for economic revival which a CDU-led government may support.

  4. Potential Coalition Scenarios: The CDU/CSU is polling at 32.8%, with a coalition likely to include the SPD, and possibly the Greens or FPD if smaller parties do well. Strong CDU support could facilitate a faster coalition process, easing market concerns.

  5. USD and US Policy Impact: While German political clarity is positive for EUR, MUFG highlights the potential overshadowing effect of the USD, especially amid expected Trump-led tariffs that could impact Germany’s economy.

Conclusion:

MUFG expects early German elections to reduce political uncertainty, which may support EUR if the CDU performs well. However, US policies and potential trade tariffs present downside risks, making the EUR’s trajectory dependent on both domestic and external factors.

Source:
MUFG Research/Market Commentary
By Andrew M Spencer  —  Nov 13 - 09:50 PM
  • Trades -0.15 - fresh trend low, with the USD +0.1% as UST yields climb

  • Treasury market is pricing rising inflation under Trump - likely contagious

  • Flash GDP and industrial production lead Eurozone data - unlikely to impact

  • Charts - daily momentum studies slide as 21-day Bollinger bands expand

  • 5, 10 & 21-day moving averages fall, signals show a bearish trending setup

  • Tuesday's 1.0663 top then Monday's 1.0728 high are initial resistance

  • Next major support is the 1.0448 2023 base, then 1.0402, 0.500% 2022/23 rise

  • 1.0550 1.074 BLN and 1.0600 1.435 BLN are the close strikes for Nov 14th

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 13 - 09:45 PM
  • Trades 0.15% lower at the base of a busy 1.2692-1.2710 range on FX Matching

  • UK house price growth quickens but budget clouds outlook, RICS survey shows

  • Sharp rise in UST yields in the last month supports higher gilt yields

  • BOE Governor Andrew Bailey is due to speak at the Mansion House Dinner

  • Charts - daily momentum studies fall, 21-day Bollinger bands expand

  • 5, 10 & 21-day moving averages head lower - a negative trending setup

  • Targets a test of the 1.2665 August low then the 1.2616 June base

  • Wednesday's 1.2770 high then Tuesday's 1.2873 top are first resistance

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Nov 13 - 07:55 PM
  • AUD/USD dips but recovers after Aus employment rises 15.9K vs 25K expected

  • Full time employment 9.7K; unemployment rate steady at 7.1%

  • Data unlikely to change hawkish stance of RBA; c.bank vigilant on inflation

  • RBA's Bullock says policy will stay restrictive until confident on inflation

  • Upside limited as Trump trade, China woes, lower commodities weigh

  • Support 0.6480, 0.6465-70, 0.6440, resistance 0.6515-20, 0.6545-50

  • Fed Chair Powell participates in Dallas event Wed; Asia range 0.64825-0.6499

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Nov 13 - 07:25 PM
  • AUD/USD trades with an offered tone after closing 0.7% lower Tuesday

  • Undermined by elevated US yields, broadly higher USD, lower commodities

  • Progress lowering US CPI stalling; Fed officials wary of inflation risks

  • Australia employment data Thu, forecast +25k jobs, unemployment rate 4.1%

  • Pair working through key 76.4% Fibo support of Aug-Sep rally at 0.6489

  • RBA's Bullock says policy will stay restrictive until confident on inflation

  • Clear break opens 0.6465-70, 0.6440, 0.6410; major support 0.63485-0.63625

  • Resistances 0.6515-20, 0.6545-50; Asia range 0.6487-0.64995

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 13 - 05:55 PM
  • -0.05% after closing down 0.6% with the U.S. dollar up 0.45%

  • ECB's Villeroy: Trump's economic agenda risks a global inflation return

  • There is no tier one EZ data today, so risk appetite and the USD lead EUR

  • Charts - daily momentum studies slide as 21-day Bollinger bands expand

  • 5, 10 & 21-day moving averages fall, signals show a bearish trending setup

  • Tuesday's 1.0663 top then Monday's 1.0728 high are initial resistance

  • Close below 1.0608, 0.382% of 2022/2023 rise and 1.0601 2024 low is bearish

  • Next major support is the 1.0448 2023 base, then 1.0402, 0.500% 2022/23 rise

  • 1.0550 1.074 BLN and 1.0600 1.435 BLN are the close strikes for Nov 14th

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 13 - 03:00 PM

Synopsis:

Credit Agricole sees potential for an upside surprise in the upcoming Australian labor report, which could bolster the AUD. Despite a slowdown in real GDP growth, Australia’s labor market remains robust, with strong employment growth and steady job advertisements. The RBA anticipates a rise in the unemployment rate to 4.3% in H2 2024, but Credit Agricole believes the data could continue to outperform.

Key Points:

  • Strong Employment Growth: Employment has remained resilient, with the unemployment rate hovering near the estimated natural rate of 4%, despite slower GDP growth.

  • Risk of Positive Surprise: Consistent job advertisement levels suggest that labor market data may exceed expectations, adding potential support for the AUD.

  • RBA Forecast vs. Current Levels: While the RBA projects the unemployment rate to rise to 4.3% in H2 2024, the current rate is at 4.1%, indicating room for continued strength in labor market data.

Conclusion:

Credit Agricole expects a potential upside surprise in the Australian labor market report, which could provide a lift for the AUD. Continued labor market strength would support AUD resilience, particularly if the data contrasts with the RBA’s forecast for a gradual rise in unemployment.

Source:
Crédit Agricole Research/Market Commentary
By Krishna K  —  Nov 13 - 04:55 PM
  • AUD/USD down 0.8% heading into New York close as key support gives way

  • Pair likely to close below 76.4% Fibo of Aug-Sep rally at 0.6489

  • Elevated US yields, broadly higher USD, China woes continue to weigh on AUD

  • Sliding commodities undermined AUD; copper hits 2-month low

  • Progress lowering US CPI stalling; rate cut pace uncertain in 2025

  • Fed officials wary of inflation risks as they weigh more rate cuts

  • Australia employment data Thu, forecast +25k jobs, unemployment rate 4.1%

  • RBA Governor Michele Bullock participates in panel discussion, 10 AM Sydney

  • Minor supports 0.6465-70, 0.6440, 0.6410-15; major support 0.63485-0.63625

  • Resistances 0.6515-20, 0.6545-50; Wed range 0.64805-0.6545

  • Fed Chair Powell participates in Dallas event Wed

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Nov 13 - 01:35 PM
  • NY opened near 0.6525 after a tight range traded overnight

  • 0.6545 hit after US yields US2YT=RR, US$ sank after US Oct. CPI

  • Sellers emerged however as post-CPI moves began reversing

  • Yields, US$ bounced; USD/CNH hit a new high & gold XAU= turned lower

  • AUD/USD turned lower again, hit a 3-mo low of 0.64805, was down -0.71% late

  • Techs are bearish; RSIs are falling, monthly inverted hammer in place

  • Australia October employment report is a key risk in Asia trading hours

  • US weekly jobless claims and October PPI are data risks Thursday in NY

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Nov 13 - 01:35 PM
  • GBP$ soft in NY afternoon, -0.33% at 1.2702; NorAm range 1.2770-1.2687

  • Trump trade-related USD buying continues, aided by steady U.S. inflation

  • UST yields off early session lows, belly of curve leads yields lower

  • Progress lowering US consumer inflation stalling; rate cut pace uncertain

  • Sterling support at 1.27 in sight as longs look to unload nL1N3MK0QP

  • For now, traders shrug off higher BoE policy view in 2025 IRPR

  • GBP$ supt 1.2687 Wednesday low, 1.2666 the Aug 8 low, 1.2591 daily cloud top

  • Res 1.2743 the 30-HMA, 1.2770 Wednesday high, 1.2819 the 200-DMA (fmr supt)

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 13 - 01:20 PM

Synopsis:

Both Barclays and Morgan Stanley forecast Q3 UK GDP growth at 0.2% quarter-over-quarter, down from 0.5% in Q2. Barclays anticipates a small positive impact from services, industrial production, and construction in the September GDP print, with flat private domestic demand. Morgan Stanley sees limited domestic demand growth but a positive contribution from net trade due to normalized imports.

Key Points:

  • September Monthly GDP Forecast (Barclays): Barclays expects a 0.2% month-over-month increase, supported by a 0.1% gain in services and slight growth in industrial production (IP) and construction.

  • Q3 GDP Composition (Barclays): Private consumption is expected to rise modestly at 0.2% quarter-over-quarter, while investment remains flat, aligning with the BoE’s forecast from November.

  • Q3 GDP Drivers (Morgan Stanley): Morgan Stanley anticipates a balanced contribution, with flat domestic demand, a boost from net trade as imports normalize, and a drag from inventories.

Conclusion:

Both Barclays and Morgan Stanley project UK Q3 GDP growth of 0.2%, with limited contributions from domestic demand but support from trade normalization. This aligns with recent BoE forecasts and reflects a slowing economic backdrop, with external factors providing a modest offset to stagnant domestic activity.

Source:
Morgan Stanley Research/Market Commentary
By Paul Spirgel  —  Nov 13 - 11:35 AM
  • GBP$ soft heading to London close, -0.3% at 1.2713; Wed range 1.2770-1.2687

  • Pair tests 1.27 big-figure support after U.S. CPI

  • Trump trade-related whippy markets, soft UST 2-5yr yields lifts GBP off lows

  • U.S. IJC, PPI Thursday and Friday UK GDP, output data in focus

  • GBP$ supt 1.2687 Wed low, 1.2666 Aug 8 low, 1.2591 weekly cloud top

  • Res 1.2738 falling 10-HMA, 1.2770 Wednesday high, 1.2819 200-DMA (fmr supt)

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 13 - 10:45 AM

Synopsis:

ING advises a straightforward approach to USD strength in 2025, forecasting that the new administration’s policies—looser fiscal stance, tighter immigration, and protectionism—combined with relatively high US rates, will fuel a dollar rally. Despite potential market wobbles, ING expects a robust USD trend, possibly breaking the dollar index’s two-year range.

Key Points:

  • Policy-Driven USD Strength: The combination of fiscal expansion, immigration restrictions, and protectionist measures under the new administration makes a strong case for sustained USD strength.

  • Higher US Rates: With US rates expected to remain elevated relative to other G10 currencies, the yield advantage should further support the dollar.

  • Market Positioning and Setbacks: ING acknowledges potential temporary setbacks due to market positioning or speculation on USD policy, but views these as brief interruptions in a broader uptrend.

  • Dollar Bubble Potential: ING warns that while the USD rally could overheat the economy, 2025 is likely to see the dollar index break its current range, driven by structural policy factors.

Conclusion:

ING recommends a straightforward bullish outlook on the USD for 2025, driven by supportive fiscal, immigration, and protectionist policies alongside higher US rates. The firm expects any dips to be short-lived within a broader upward trend, potentially pushing the dollar index to new highs.

Source:
ING Research/Market Commentary
By Robert Fullem  —  Nov 13 - 09:35 AM
  • USD/JPY sets new day's low of 154.34 on EBS amid dollar weakness and broad drop in Trsy yields after no monthly change in headline CPI

  • Annualized core CPI (ex-food and energy) of 3.3% remains above Fed's 2% target

  • Trsy 2-year yields eye the bottom of one-month rising channel near 4.20%

  • Downside in pair may be limited as US equity futures turn higher, yield curve steepens and as yen volatility drops

  • Price congestion around 154.30-50 helps limit loss with more significant support near the Oct. 28 high of 153.88

  • WTI oil holds just above its 2024 low as Dallas Fed President Logan gets set to speak on "Energy and the Economy"

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 13 - 09:32 AM

Synopsis:

BofA contends that the USD’s strength, driven largely by US fiscal policy outperformance relative to G10 economies, particularly the Eurozone, is not sustainable long term. While further fiscal loosening could offer near-term USD support, this “US exceptionalism” is largely due to high fiscal deficits, which may not sustain the USD’s elevated position in real effective terms indefinitely.

Key Points:

  • US Fiscal Loosening and Short-Term USD Support: Additional fiscal loosening could temporarily boost the USD, despite its high real effective exchange rate, providing USD bulls a short-term case.

  • Outperformance Due to Fiscal Policy: BofA argues that US economic outperformance relative to G10, largely attributed to “US exceptionalism,” has been fueled by expansive fiscal deficits rather than intrinsic structural advantages.

  • Sustainability Concerns: Since fiscal-driven growth may not last indefinitely, this suggests diminishing USD support in the long term as other G10 economies with tighter fiscal policies may catch up or outperform.

Conclusion:

BofA sees current fiscal-driven USD strength as short-lived, with the dollar’s elevated position potentially unsustainable as US fiscal deficits continue to drive, but ultimately limit, the case for “US exceptionalism.” This view implies that USD support may weaken over the long term, challenging USD bulls reliant on fiscal expansion as a continued driver.

Source:
BofA Global Research
By eFXdata  —  Nov 13 - 09:08 AM

Synopsis:

CIBC reports that the October CPI print aligned with expectations, reinforcing the likelihood of a 25bps Fed rate cut in December. Both headline and core inflation rose steadily, matching previous months’ gains, with inflationary pressures expected to ease as labor market slack builds, putting inflation on track for the Fed’s target by mid-2025.

Key Points:

  • CPI Figures in Line with Forecasts: October’s headline CPI rose by 0.2% month-over-month and 2.6% year-over-year due to base effects, while core CPI (excluding food and energy) rose 0.3% month-over-month and remained at 3.3% year-over-year, as anticipated.

  • Core Inflation Breakdown: Core goods prices were flat, offsetting the slight 0.3% month-over-month increase in core services ex-housing, a slight deceleration from September’s pace.

  • Outlook for Inflation and Fed Policy: With labor market slack increasing, CIBC expects inflation to be contained, with core inflation projected to reach the Fed’s target by mid-2025, supporting the Fed’s likely 25bps rate cut in December.

Conclusion:

CIBC finds October CPI data in line with expectations, keeping the Fed on track for a 25bps rate cut in December. Easing inflationary pressures, driven by building labor market slack, suggest inflation is on course to meet the Fed’s mid-2025 target, providing a stable outlook for the Fed’s policy trajectory.

Source:
CIBC Research/Market Commentary
By Christopher Romano  —  Nov 13 - 07:15 AM
  • AUD/USD fell to 0.6516 in Asia with help from Australia Q3 wage data

  • Buyers emerged however and the pair rallied to 0.6539

  • Iron-ore DCIOc2 gains, softer US yields US10YT=RR helped buoy AUD/USD

  • NY opened near 0.6530, pair traded down only -0.05% in early hours

  • USD/CNH & equity ESv1 drops helped to keep pair within overnight range

  • Techs lean bearish; RSIs falling, monthly inverted hammer candle in place

  • AUD/USD's hold below the 10-, 21- & 200-DMAs reinforces bearish signals

  • US Oct. CPI & Fed's Logan, Musalem, Schmid are data, event risks in NY

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Nov 13 - 06:10 AM
  • A slowing of the fall from 1.3046 Nov. 6 high

  • Tight 1.2730-1.2756 range Wed: just above 1.2719 Tues and trend low

  • Underlying bear trend still in place: strengthened after 200DMA break

  • No sign of a drag from a Nov. 26 1.3088-98 Ichimoku cloud twist

  • Bears can target the 1.2667 Aug. 8 low and 1.2567 76.4% Fibo: 1.2299-1.3434

  • Resistance levels are at Mon-Tues highs, 1.2873 and 1.2925, respectively

  • Risk sentiment and dollar moves the main drivers for the GBP market

  • UK outlines a National Health Service overhaul after the budget investment

  • BoE hawk flags topside risks to inflation nL1N3MK0E5

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 13 - 05:55 AM
  • Understanding Ichimoku: implications for USD/JPY nL1N3MJ1G7

  • Yen slips past 155 per dollar to more than 3-month low nL1N3MK08E

  • USD/JPY has risen from 154.52 to 154.24, Wednesday, EBS data shows

  • Spot scope for 156.68 Fibo test if a 'cloud twist' is survived nL1N3MK094

  • As USD/JPY climbs, the larger the risk of Japan FX intervention nL1N3MK07I

  • EUR/JPY risen from 164.26 to 164.67, on Wednesday, EBS data shows

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 13 - 03:45 AM

Ichimoku Kinko Hyo, which means "at a glance balance charts", is a complex charting technique developed in Japan in the late 1960s to forecast equity markets.
Once an obscure method of analysing financial markets confined to Asia, it is now extensively used by technical analysts globally to predict the direction of prices in a wide range of assets.

We will explore the main features of an Ichimoku chart and explain what it could mean for USD/JPY:

TENKAN-SEN and KIJUN-SEN

The tenkan-sen, or conversion line, is the midpoint of the last nine trading sessions, while the kijun-sen, or base line, is the midpoint of the last twenty-six periods.

Each line on its own can offer support if below the market and resistance when above.
A tenkan-sen crossover above kijun-sen is seen as bullish.
If the opposite occurs, that would be a bearish sign.

CHIKOU-SPAN

The chikou-span, or lagging line, is the current price plotted twenty-six periods back.
This is essentially a measure of momentum.
If the current price is higher than it was twenty-six sessions ago, momentum is seen as positive.
Conversely, if the market price is below it, momentum would be negative.

THE CLOUD

The cloud, or kumo, is a region between two lines called senkou (leading) span A and senkou (leading) span B.
Senkou span A is the midpoint of tenkan-sen and kijun-sen, plotted twenty-six periods ahead.
Senkou span B is the midpoint of the last fifty-two periods also plotted twenty-six periods ahead.

When the market is trading above the cloud, this region is seen as support.
However, when an asset price is below, the cloud can be viewed as a region of resistance.

CLOUD TWIST

The "cloud twist" is when the cloud extremes, senkou spans A and B, cross and that can warn of an imminent reversal in a market.
Often the location and date of the "twist" can combine to act like a magnet.

WAVES, TIME AND TARGETS

More advanced elements of Ichimoku charting include waves, with patterns such as "I", "V" and "N". In addition, time can be used to measure when a wave could be coming to an end.
Lastly the type of wave can be used to establish a potential target.

SO WHAT COULD ICHIMOKU MEAN FOR USD/JPY?

There are a number of bullish signs on the current USD/JPY Ichimoku daily chart.
The tenkan-sen and kijun-sen are positively aligned, with spot trading above both these lines and the cloud too.
As chikou-span is well above the price of twenty-six days ago, that shows momentum is currently positive.

There is potential for the completion of a "V" wave, which would be an 100% retrace of the 161.96 to 139.58 (July to September) drop.
As the drop from 161.96 to 139.58 took 53 days, the rise to the 161.96 "V" wave target could also be reached in approximately 53 days (November 28)

FX traders should be mindful that there will be a "cloud twist" on Friday below 146.00, that warns of a potential relapse in the near-term.
If the uptrend is not disrupted by significant losses this week, that will add to the underlying bullish outlook.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Nov 13 - 03:15 AM
  • EUR/USD had been gunning for FX option barriers and stops at 1.0600

  • Breached late Tues for 1.0595 (2024 low) and has been consolidating since

  • EUR/USD FX option implied volatility had lead a broader based charge higher

  • Benchmark 1-month fell 9.0-6.25 post election and regained a 7.9 peak Tues

  • However, its back to 7.4 as profits booked, spot slide falters

  • 5-billion euros of option strikes expire 1.0580-1.0630 Wed nL1N3MK08G

  • They could help to contain market ahead of Wednesday's U.S. CPI data risk

  • FX options wrap nL1N3MJ0PC

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Nov 13 - 02:55 AM
  • Monday hammer candle into bullish confirmation Tuesday

  • Early Wed and stalling just taking some of the heat out of the reversal

  • Our 0.8297 long in the money: will raise stop on a break of 0.8354, Fibo

  • Fourteen day momentum remains negative and RSI is pointing down

  • Corrective gain consolidation the likely Wednesday theme

  • Still see risk to the daily cloud base, currently 0.8380

  • EUR/GBP Trader TGM2343

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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