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Jun 16 - 08:36 PM
EUR/USD - 1.1200 Strikes And Fibonacci Support Form A Base
First appeared on eFXplus on Jun 16 - 06:40 PM
  • Flat after opening 0.6% lower on broad US data led strength
  • Nowotny looks for flexibility on the ECB inflation target nL8N23N06J
  • De Guidos, ECB will only act if inflation expectations change nL8N23M0P6
  • 1.1200 1BLN, 1.1215-25 640M, 1.1250 411M and 1.1260-65 500M close strikes
  • Dip leaves negative momentum studies, 5, 10 & 21 DMAs conflict
  • Neutral setup, close below 1.1198, 61.8% March/May fall would be bearish
  • NY 1.1203/1.1270 range is initial support/resistance

eur jun 17 Click here

Thomson Reuters IFR Markets
Jun 16 - 05:00 PM
AUD/USD - Risks Break Down From Consolidation Range
First appeared on eFXplus on Jun 16 - 03:05 PM
  • AUD/USD threatens break lower from month long 0.6850-0.7000 consolidation
  • Weighed down by expectations of larger and earlier RBA rate cuts
  • Undermined by robust U.S. retail sales, Fed rate cut expectations pared back
  • Lackluster China data Fri, acrimonious U.S-China ties take toll
  • Australian treasurer hints at fiscal easing -newspaper nL4N23L2O7
  • Support 0.6865 triple low, 0.6852, 76.4% of Jan rally; resistance 0.6900-05

aud: Click here

Thomson Reuters IFR Markets
Jun 14 - 05:00 PM
AUD: Change RBA Rate Call - RBA To Cut In July Or August And Again In November - NAB
First appeared on eFXplus on Jun 14 - 12:45 PM

NAB Research discusses its latest change for the RBA cash rate call which now see the central bank cutting to 0.75% in November.

"We have changed our view on the cash rate, to include an extra cut in late 2019 – while heavily data dependent we have tentatively placed the cut in November. We also think that lower interest rates will be supported by fiscal stimulus later this year. We would not rule out the possibility of alternative monetary action in early 2020, in addition to further rate cuts, if the economy remains very subdued, but have not put it into our projections.  

On the question of a July or August cut that is very hard – and to a large extent is less relevant for the economic outlook. On balance we have opted to stay with our August cut forecast – but would not at all be surprised by a July move. It is in short a very finely balanced judgement. And it will probably be the case that Governor Lowe will talk about the need for more action when he speaks on “The labour market and spare capacity” on 20 June," NAB projects. 

"Beyond August, we have pencilled in a third rate cut to 0.75% in November and fiscal stimulus by late this year. Alternative monetary policy options might be considered next year if these measures fail to have much effect," NAB adds. 


NAB Research/Market Commentary
Jun 14 - 03:48 PM
AUD/USD - May Lows Crack On Contrasting China-US Data, Trade Fears
First appeared on eFXplus on Jun 14 - 02:00 PM
  • AUD/USD hit first overnight by poor Chinese data nL4N23L1WS
  • 0.6892 low on that broken by strong US retail sales, IP data
  • AUD and AUD yields still under pressure due to weak jobs report nL4N23J47A
  • NY sales cracks the May lows at 0.6865, nears 76.4% of '19 range at 0.6852
  • Only scant flash-crash trades below there until 0.6715 January 3 low
  • RBA June policy meeting minutes are out Tuesday, but FOMC is the key event

Chart: Click here

Thomson Reuters IFR Markets
Jun 14 - 02:36 PM
EUR/USD - COMMENT-IMM: Trapped EUR/USD Longs Likely Sold Into Recent Strength
First appeared on eFXplus on Jun 14 - 12:40 PM


Today's rally in the dollar may include a fair amount of position adjustment ahead of the FOMC's June 19 meeting, particularly in EUR/USD.
As of last Friday's
release, EUR/USD specs held a net short of 87,551 contracts -- which included 155,771 longs and 243,322 shorts. Some of those EUR longs probably viewed the EUR/USD rise over the most recent reporting period as an opportunity to reduce those positions.
True, the Fed could be edging toward a round of rate cuts, which should weaken the dollar.
However, the near-term rate view also shows a slight reduction in Euribor rates.
Even though the market foresees deeper cuts in the U.S. than in Europe, to the detriment of the dollar, today's U.S. retail sales beat has reduced Fed easing odds, which is USD-positive.
Further, Euribor rates hint at euro zone rates remaining negative until Q2 2023, when markets project U.S. rates to stand at 1.85% even after dropping from current levels by 2.40%. Support by the recent EUR/USD low at 1.1105 should be strong.
In the other direction, e
xpect the 200-DMA at 1.1360 and Jan.
10's 2019 high
1.1570 to provide resistance, even as the Fed adjusts rates lower.

EUR Chart: Click here

Thomson Reuters IFR Markets
Jun 14 - 01:24 PM
USD/JPY: Sentiment In The Driver Seat; Room For More Downside Before A Reversal - Danske
First appeared on eFXplus on Jun 14 - 11:45 AM

Danske Research discusses USD/JPY outlook in light of revising its 3-month target to 107.

"We expect global sentiment to remain the key driver in the cross as risk-off, commodity sell-off and falling US rates run together and amplify each other to take USD/JPY lower. If central banks manage to stabilise sentiment and oil prices, we would be likely to see the JPY move towards 110 in coming months. Should we see a worsening of risk sentiment, USD/JPY could move towards 106-108, Danske argues. 

"After adjusting lower in May and June as expected, we forecast USD/JPY at 107 in 3M. The forecast reflects expectations that we will stay in a muddy macro picture with downside risks still being material. A reconciliation of the US-China trade talks and/or more a substantial pivot from Fed is the key risk for USD/JPY upside," Danske adds. 

Danske Research/Market Commentary
Jun 14 - 12:12 PM
USD/JPY - COMMENT-USD/JPY Mired Ahead Of Fed, Even After Retail Sales Beat
First appeared on eFXplus on Jun 14 - 10:35 AM

If today's apparently good U.S. economic news slows the Fed's transition toward easing at next week's FOMC or emboldens Trump to expand Chinese import tariffs, then stocks could come under renewed pressure, which would add to support for the haven yen.
Until the FOMC, USD/JPY will likely remain on the low-to-mid 108.00s. It rallied with U.S. rates on well-above-forecast net April-May U.S. retail sales and a bigger-than-expected rebound in industrial production nTLAEHEF6W, as this data will drag Q2 GDP forecasts higher and diminish concerns about the U.S.-China trade war damaging the U.S. expansion.
So far, the news has only modestly trimmed market pricing of a July Fed rate cut, though implied easing over the next 12-months has narrowed to 79bp from 87bp overnight and 10-year Treasury yields have rebounded roughly 5bp off today's 2.058% low that avoided the June and 2019 low at 2.053%.
USD/JPY held Thursday's 108.16 low after digesting today's weak China data and ongoing fears the U.S. and China are bracing for a prolonged protectionist battle.
Trump said this morning it doesn't matter if Xi comes to the G-20, China will eventually make a trade deal nW1N22402Q.
He also reiterated the yuan manipulation claim even though the PBOC has been fighting market-driven USD/CNY appreciation.

Chart: Click here

Chart: Click here

Thomson Reuters IFR Markets
Jun 14 - 11:00 AM
USD: US Retail Sales: Supports The Case For Fed To Not Cut Rates As Early As Market Expects - CIBC
First appeared on eFXplus on Jun 14 - 08:48 AM

CIBC Research discusses its reaction to today's US retail sales report for the month of May.

"US retail sales improved in May following an upwardly revised prior month. The downside miss on headline retailing, which was up 0.5% in May, was minor but a better April reading more than offset that (now +0.3% vs. -0.2% prior). Despite robust unit auto sales in May, the ex-autos figure matched the headline, as did the control group. The positive surprise on the control group, which feeds more directly into GDP, as well as the upwards April revision, left the three-month average annualized pace of sales at a heady 8.5%, a marked acceleration from only 2.9% in Q1. Consumer spending appears to be accelerating in Q2, after a soft start to the year that was hindered by the government shutdown," CIBC notes. 

"These data support our forecast that the Fed won't have to cut interest rates as early as the market is expecting and that has left the USD higher while yields have risen," CIBC adds. 

CIBC Research/Market Commentary
Jun 14 - 08:36 AM
EUR/USD - Collapsing Inflation Expectations Could Support EUR/USD
First appeared on eFXplus on Jun 14 - 06:20 AM
  • Eurozone inflation expectation collapse from 1.42% May 1 to 1.14% today
  • U.S. inflation expectations have also plummeted 2.31% Apr 29, 2.04% today
  • An evenly balanced influence on EUR/USD
  • Start 2019 U.S. inflation expectations rebounded, EZ downside unchallenged
  • Potentially the change of greater influence is the renewed drop in U.S.
  • With traders short EUR/USD the change in expectations could provide support

EZ. inflation expectations Click here

U.S. inflation expectations Click here

Thomson Reuters IFR Markets
Jun 14 - 07:24 AM
GBP/USD - Drops To Its Lowest Level Since June 3
First appeared on eFXplus on Jun 14 - 05:30 AM
  • Cable hits 1.2635 after breaking below 1.2653 (Monday's low)
  • 1.2635 is the lowest level since June 3 (1.2611 was the low that day)
  • GBP continues to suffer on high probability Johnson to be UK's next PM
  • See: . Johnson wants UK to leave EU on Oct 31 nL8N23J10T
  • GBP/USD bear targets include 1.2560 (May 31 low), 1.2500 and 1.2000
  • See: . 1.2663 (Thursday's low) is now a resistance level

GBPUSD: Click here

Thomson Reuters IFR Markets
Jun 14 - 06:12 AM
GBP/JPY - Brexit And Risk Aversion Drive GBP/JPY To Lowest Since Flash Crash
First appeared on eFXplus on Jun 14 - 03:50 AM
  • Renewed risks of a no deal Brexit weighing GBP amidst broader risk aversion
  • Bets on U.S. rate cuts rise ahead Jun Fed and G20
  • USD/JPY slides to fresh lows for this week. Major tech at risk
  • GBP/USD only below 1.2600 9 times last 12 months but little bounce (bearish)
  • GBP/JPY 136.99. Jun low 136.51. Flash crash low Jan 3 @ 131.92
  • Key for techs now is 76.4% rally from Jan 3 low at 135.92

GBPJPY weekly Click here

Thomson Reuters IFR Markets
Jun 14 - 05:00 AM
GBP/USD - Weeklies Shine A Light Through The Fog
First appeared on eFXplus on Jun 14 - 03:05 AM
  • As daily action gets bogged down in tight ranges the weeklies show the way
  • Longer-term bear bias defined by a line off the April 2018 highs
  • The trend resistance currently coming in at 1.3108
  • A thick and falling weekly cloud also stacking the odds in favour of bears
  • Scope to 1.2409 l/t but 1.2560 May 31 hammer low key support
  • Daily bear momentum, falling RSI, bears eye 1.2653 range base at 1.2653

GBP/USD Trader:

GBP/USD Weekly Ichimoku Chart: Click here

GBP/USD Daily Candle Chart: Click here

Thomson Reuters IFR Markets
Jun 14 - 03:48 AM
EUR/USD's Odds Are Increasing For A Drop To The 30-DMA
First appeared on eFXplus on Jun 14 - 02:05 AM
  • Odds are increasing for a fall to the 30-DMA, which is currently at 1.1214
  • Bears trying to reassert themselves after "bull trap" above the 1.1338 Fibo
  • 1.1338 a 50% retrace of the 1.1570 to 1.1106 2019 drop
  • Mkt broke but failed to close above 1.1338 Fibo on Wed and last Fri
  • That "double failure" reinforces the bearish structure
  • EUR/USD "double fail" above Fibo, biggest drop since April

EUR/USD Trader:

Daily Bollinger Chart: Click here

Thomson Reuters IFR Markets
Jun 14 - 02:36 AM
EUR/USD - Barely Moves In Quiet Asian Trading
First appeared on eFXplus on Jun 13 - 11:15 PM
  • EUR/USD idled in a 1.1273/82 range during a quiet Asian morning session
  • Option related selling around 1.1300 discouraging attempts higher
  • Market quiet as focus split between geopolitics & central bank expectations
  • EUR/USD support at 100-day MA at 1.1270 and 38.2 of 1.1105/1.1348 at 1.1255
  • Choppy range trading expected ahead of US retail sales later today

eur/usd Click here

Thomson Reuters IFR Markets
Jun 14 - 01:24 AM
First appeared on eFXplus on Jun 14 - 12:00 AM


24-HOUR VIEW EUR could test 1.1250 first before a more robust recovery can be expected. We expected EUR to “extend its decline” yesterday but were of the view the “strong support at 1.1250 is unlikely to come under threat for now”. EUR subsequently dipped to 1.1266 before rebounding slightly. While there is hardly any pick-up in momentum, the underlying tone is still on the soft side and this could lead to a test of 1.1250 first before a more robust recovery can be expected. For today, a sustained decline below 1.1250 is not expected. On the upside, if EUR were to move above 1.1320, it would indicate that the current mild downward pressure has eased (minor resistance is at 1.1300).

1-3 WEEKS VIEW Diminished odds for further EUR strength. No change in view from yesterday, see reproduced update below. Upward momentum has deteriorated further and a breach of the 1.1250 ‘key support’ would not be surprising.

The relatively steep decline of -0.37% yesterday (12 Jun) has further dented further the fragile upward momentum and the chance EUR to test the strong 1.1380 resistance appears to be slipping away. However, only a breach of the 1.1250 ‘key support’ (no change in level) would indicate that the ‘positive phase’ that started last Tuesday (04 Jun, spot at 1.1245) has ended. In order to revive the current flagging momentum, EUR has to move and stay above 1.1335 within these 1 to 2 days or a break of the ‘key support’ would not be surprising. Looking ahead, a move below 1.1250 would indicate EUR could trade sideways for a period (a sustained decline in EUR is not expected).


24-HOUR VIEW Despite waning momentum, there is still scope for GBP to test 1.2650 first. Yesterday, we held the view that GBP is” expected to move lower but any weakness is likely limited to a test of 1.2650”. While GBP weaken as expected, it recovered after touching 1.2662. Downward momentum appears to be struggling to maintain its traction but there is still scope for GBP to test 1.2650 first. That said, we still do not expect a sustained decline below this level (next support is at 1.2610). On the upside, only a move above 1.2730 would indicate that a short-term bottom is in place (minor resistance is at 1.2710).

1-3 WEEKS VIEW GBP is expected to trade sideways. The ‘sideway-trading’ phase that started last Tuesday (04 Jun, spot at 1.2665) is still clearly intact as GBP traded well within our expected 1.2570/1.2770 range since then. Momentum indicators are mostly neutral and we continue to expect GBP to trade within the range mentioned above. Looking ahead, barring a break of 1.2570, the current ‘sideway-trading’ phase is likely to be resolved by a move above the top of the expected range.


24-HOUR VIEW AUD could edge below 0.6900 but next support at 0.6865 is not expected to come into the picture. We highlighted yesterday “further AUD weakness is not ruled out but oversold conditions suggest 0.6900 is unlikely to break”. The subsequent drop in AUD came within one pip of breaking 0.6900 as it touched 0.6901. While the current decline is still in oversold territory, there is no sign of stabilization just yet. From here, barring a move above 0.6940, AUD could edge below 0.6900 but the next support at 0.6865 is not expected to come into the picture (there is another support at 0.6885).

1-3 WEEKS VIEW AUD is expected to trade sideways. We shifted our narrative for AUD yesterday (13 Jun, spot at 0.6930) from to “trade with an upside bias” to “trade sideways”. As highlighted, while a test of last month’s 0.6865 low is not ruled out, any weakness is viewed as part of 0.6865/0.6990 range. At this stage, we see low odds for AUD to move below 0.6865 is a sustained manner.


24-HOUR VIEW NZD could continue to drift lower but is unlikely to threaten the 0.6530 support. Instead of trading sideways as we expected yesterday, NZD drifted lower to 0.6556 before ending the day on a soft note at 0.6564. While downward momentum is lackluster, NZD is still under mild downward pressure and could continue to drift lower but is unlikely to threaten the 0.6530 support. Resistance is at 0.6580 followed by 0.6600.

1-3 WEEKS VIEW NZD is expected to trade sideways. There is not much to add to the update from Wednesday (12 Jun, spot at 0.6585). As highlighted, NZD is deemed to have moved into a ‘sideway-trading’ phase. Near-term, the underlying tone is on the soft side and this could lead to a probe of the bottom of the current sideway trading range of 0.6530/0.6630. Looking ahead, if NZD were to register a NY closing below 0.6530, it would indicate that it is ready to retest the year-to-date low at 0.6482. At this stage, the prospect for such a move is not high.


24-HOUR VIEW USD could test 108.00 but a sustained decline below this level is unlikely. USD traded between 108.15 and 108.53 yesterday, lower and narrower than our expected 108.25/108.75. The underlying tone has weakened somewhat and this could lead to a test of 108.00. However, lackluster momentum suggests a sustained decline below this level is unlikely. Resistance is at 108.55 followed by 108.75.

1-3 WEEKS VIEW Diminished odds for further USD weakness. After the sharp drop in USD, we indicated last Monday (03 Jun, spot at 108.30) that USD “has move into a negative phase” and added, “ the weakness could extend to 107.70, 107.50”. After touching 107.80 last Wednesday (05 Jun), USD has not been able to make much headway on the downside as it traded mostly sideways for the past several days. The consolidation has led to a rapid loss in momentum and the odds for further USD weakness have diminished. However, only a breach of the 109.05 ‘key resistance’ (no change in level) would indicate that the ‘negative phase’ has ended. Until then, there is still chance, albeit a slim one that USD move to the 107.50/107.70 support zone

UOB Research/Market Commentary
Jun 14 - 12:12 AM
AUD/USD - Grinding Through Bids Around 0.6900
First appeared on eFXplus on Jun 13 - 10:00 PM
  • AUD/USD under pressure in Asia and is trading at 3-week low at 0.6895
  • Bids around 0.6900 cushioning the fall, but support at 0.6865/70 in focus
  • AUD/USD undermined by dovish RBA expectations and US-China trade uncertainty
  • Key China data later today including IP, retail sales and urban investment

aud/usd Click here

Thomson Reuters IFR Markets
Jun 13 - 11:00 PM
USD/JPY - Shade Softer - 107.80 Remains Pivotal Support
First appeared on eFXplus on Jun 13 - 09:25 PM
  • Touch softer in a low key start, E-mini S&P flat, 10yr UST flat at 2.09%
  • Nikkei +0.2% - US/Japan trade understanding deepened - Motegi nL4N23K4WH
  • No close strikes - horizontal Tenkan & Kijun lines suggest consolidation
  • 107.77/107.81 - Jan 10 and June 4 lows - a double bottom provides a base
  • Primary trend lower since April - 109.24 Kijun line is pivotal resistance
  • NY 108.25/108.53 range is initial support/resistance

jpy jun 14 Click here

Thomson Reuters IFR Markets
Jun 13 - 09:48 PM
GBP/USD - Cable Hypnotized By The UK Political Turmoil
First appeared on eFXplus on Jun 13 - 07:55 PM
  • Flat, closed off 0.1% as the 1.2653/1.2763 range approaches a third week
  • Boris Johnson has a huge early lead in race to be the next PM nL8N23K3HC
  • Other PM candidates discussing an alliance to stop Boris nFWN23K0AV
  • Conflicting momentum studies, 5, 10 & 21 DMAs coil - neutral setup
  • Significant levels are 1.2800, 38.2% of the May fall and the 1.2560 May low
  • Early London 1.2662 low and NY 1.2708 high are initial support/resistance

gbp jun 14 Click here

Thomson Reuters IFR Markets
Jun 13 - 08:36 PM
EUR/USD - Grimly Holding On To Moving Average Support
First appeared on eFXplus on Jun 13 - 06:50 PM
  • EUR/USD consolidating around key moving average readings after quiet session
  • The 10-day MA held yesterday when it was 1.1268 and it moves to 1.1279 today
  • The 100-day MA is at 1.1270 & break targets 38.2 0f 1.1105/1.1348 at 1.1255
  • EUR/USD sellers tipped at hourly resistance formed at 1.1300/05
  • Dovish ECB expectations weigh while dovish Fed expectations underpin
  • Quiet range trading expected in Asia once again

eur/usd Click here

Thomson Reuters IFR Markets
Jun 13 - 05:00 PM
EUR/USD: Longs The 2nd-Best G-10 FX Trade In 3 Months Ahead Of Fed Rate Cut - Nordea
First appeared on eFXplus on Jun 13 - 03:00 PM

Nordea Research discusses EUR/USD outlook and notes that historically, a long EUR/USD position is the second-best G-10 FX trade in the three months leading up to the first Fed cut, only outpaced by a long EUR/NZD position.

"EUR/USD has picked up during the 60 trading days preceding the first rate cut from the Fed in five out of the last six rate cutting cycles – with the 1989 cycle as the sole exception – on average by roughly 3%," Nordea notes. 

"The reason why EUR/USD picks up is probably that the ECB is seen as the “easing turtle” among the G10 central banks, which is why the rate spread is at least temporarily supportive of a rising EUR/USD cross around the beginning of a new Fed cutting cycle. But EUR/USD often moves lower again 6-12 months into the cutting cycle, probably as the ECB tends to follow the Fed with a time lag," Nordea adds. 

Nordea Research/Market Commentary
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