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EUR / USD
GBP / USD
USD / JPY
USD / CAD
AUD / USD
NZD / USD
USD / CHF
AUD / JPY
AUD / NZD
EUR / CHF
EUR / GBP
EUR / JPY
GBP / JPY
By Paul Spirgel  —  May 24 - 01:00 PM
  • $JPY soft in NY aft trading -0.05% at 156.89; Friday range 157.15-156.90

  • Pair remained tethered to recent highs just above 157 on US-JP rate diffs

  • U.S. durables revisions, lower UMich inflation view stirs USD selling

  • Liquidity light ahead of U.S., UK holidays; recent longs lightening slightly

  • Suspected intervention lvl by 157.50 in focus, may temper further USD gains

  • Japan CPI as forecast doesn't move BoJ hike expectations

  • Res 157.19 May 23 high, 157.99 May 1 high, 158.35 upper 21-d Bolli

  • Supt 156.90 Friday high, 156.53 May 23 high, 156.18 rising 10-DMA

  • German CPI May 29 and U.S> core PCE Idx on May 31 next week's key data

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  May 24 - 12:55 PM
  • NY opened near 1.0840 after 1.08058 traded overnight, rally extended in NY

  • Softer US yields weighed on US$, helped tighten DE-US spreads US2DE2=RR

  • Equity ESv1, gold XAU= gains added additional weight on the US$

  • EUR/USD turned positive, rallied above the 10-DMA hit 1.0858 on EBS

  • Pair's rally stalled near the top of the bull flag in place on daily charts

  • Rising daily, monthly RSIs, move above 10-DMA are bullish technical signals

  • EZ May HICP, US weekly claims & April PCE are key data risks next week

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  May 24 - 12:45 PM
  • NY opened near 0.6615 after an 8-session low of 0.6592 traded in Asia

  • After an initial dip the overnight rally extended on risk-on markets

  • Softer US yields US10YT=RR weighed on US$; stocks & gold rallied

  • AUD/USD rallied above 0.6635, pair traded up +0.45% inNY's afternoon

  • Daily RSI diverged, daily bull hammer formed; may worry AUD/USD shorts

  • Australia April CPI, US weekly claims & April PCE are key risks next week

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 24 - 01:30 PM

Synopsis:

ING assesses the current valuation of EUR/GBP, which has recently stabilized near the crucial 0.8500 level. Following disappointing UK retail sales data and soft PMI reports, the pound appears overvalued against the euro. ING forecasts a near-term rise in EUR/GBP, influenced by economic data and central bank policies.

Key Points:

  • UK Economic Data: Recent figures for UK retail sales and PMIs suggest a weakening economic backdrop, which has negatively impacted GBP.
  • Central Bank Expectations: The Bank of England’s (BoE) potential dovish shift contrasts with a hawkish cut expectation from the ECB, potentially favoring EUR strength against GBP.
  • Political Risk Premium: The upcoming UK general election in July might introduce a risk premium on sterling, further supporting EUR/GBP.
  • Market Pricing: The current market pricing of BoE rate cuts seems overly cautious, with ING still anticipating an initial cut in August despite political events.

Conclusion:

Considering the softer UK economic indicators and the shifting monetary policy landscape, ING maintains a bullish stance on EUR/GBP, expecting the pair to move higher in the short to medium term. This outlook is bolstered by potential political uncertainties in the UK and diverging rate expectations between the ECB and BoE.

Source:
ING Research/Market Commentary
By Paul Spirgel  —  May 24 - 12:30 PM
  • GBP$ drifts higher into NY afternoon, +0.34% at 1.2742; NY range 1.2751-10

  • US durables revision lwr, falling UMich 1/5-yr inflation view sinks USD

  • Sterling bulls keep focus on 2024 high nL1N3HR19W

  • Pair eyes Wed high 1.2761 as BoE rate cut expectations slip; see LSEG's IRPR

  • Hot UK CPI pushes cut view from Aug to Sept/Nov boosts GBP/USD

  • GBP$ res 1.2761 May 22 high, 1.2764 upper 21-d Bolli, 1.2803 Mar 21 High

  • Supt 1.2712 Friday NorAm low, 1.2680 Friday low, 1.2634 100-DMA

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 24 - 10:45 AM

Synopsis:

Danske Bank anticipates a political maneuver from the ECB with a 25bp rate cut on June 6, characterized as a reversal of last year’s precautionary increase. Further adjustments in monetary policy are projected to follow a cautious and data-driven approach.

Key Points:

  • June Rate Cut: The ECB is anticipated to adjust rates downward by 25 basis points in June, viewed largely as a political move to reverse the previous year’s ‘insurance hike’.
  • ECB's Forward Guidance: Post-June, the ECB is likely to maintain its meeting-by-meeting, data-dependent stance, indicating a careful approach to future rate decisions.
  • Revised Rate Path: Danske has updated its ECB rate forecast for the first time in over a year, predicting two rate cuts in 2023 (June and December) and three additional cuts in 2024, targeting a deposit rate of 2.75% by the end of 2025.
  • Market Repricing: Financial markets have adjusted their expectations, now anticipating a 61 basis point reduction in ECB rates for the current year.

Conclusion:

Danske’s outlook suggests a strategic calibration of the ECB’s policy rate, starting with a June rate cut framed as a correction of a previous increase. This move is seen as part of a broader, cautious strategy to navigate economic indicators and gradually reduce rates over the coming years, aligning closely with evolving economic data.

Source:
Danske Research/Market Commentary
By Paul Spirgel  —  May 24 - 10:10 AM
  • $CAD slid in early NY trading -0.25% at 1.3697; Friday range 1.3739-1.3692

  • U.S. durables revised lower hit USD, tempered reaction to soft CA ret sales

  • Recent USD longs paring ahead of long U.S. holiday weekend

  • US-CA rate diff continue to favor USD longs; USD bulls may test recent highs

  • LSEG's IRPR pricing 1st BoC cut in July; Fed 60% odds for Sept, 80% for Nov

  • Res 1.3740 by Thurs/Fri highs, upper 21d Bolli 1.3764, 1.3785 Apr 30 high

  • Supt 1.3692 Friday low, 1.3677 21-DMA, 1.3630 daily cloud base

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 24 - 09:23 AM

Bank of America Global Research flags a tactical sell signal for GBP/USD into month-end. 

"A tactical sell signal near trend line resistance at 1.28.15-1.2800 suggest GBP/USD dips into month end.

Six of the last seven signals shown below alined with trend changes which means if a turn down ends May, it could persist into mid-June. Note the last high was in March at 1.2894," BofA notes.

Screenshot_2024-05-24_at_9.21.51___AM.png

Source:
BofA Global Research
By eFXdata  —  May 24 - 08:00 AM

Synopsis:

ANZ suggests caution towards the recent rally in GBP/USD, citing over-extension amid a potentially more dovish Bank of England (BoE).

Key Points:

  • Consumer Price Support: The GBP has seen some uplift on the G10 crosses from firmer CPI prints in March and April, which temporarily buoyed its value.
  • BoE's Dovish Shift: Indications from recent BoE MPC meetings hint at an evolving dovish tilt, which could become more apparent at the upcoming June meeting.
  • Potential Vulnerability: Despite the recent strength, the GBP may be over-extended, especially considering the dovish leanings of the MPC and the potential onset of more aggressive easing cycles starting in June.

Conclusion:

While recent inflation data have provided temporary support for the GBP, ANZ views the currency's rally as potentially overdone. The expected dovish shift by the BoE could undermine the GBP's recent gains, making it vulnerable, especially against other currencies, as global easing cycles begin to intensify.

Source:
ANZ Research/Market Commentary
By Rob Howard  —  May 24 - 06:35 AM
  • Cable hits 1.2721 after extending north from early London low by 1.2675

  • That low was plumbed after weak UK retail sales data hurt the pound

  • Ascent to 1.2721 aided by positive US stock futures (GBP is risk-sensitive)

  • 1.2746 (Thursday's high, pre-US PMI beats) and 1.2761 are resistance levels

  • Better get ready for an end-of-month USD selloff - Barclays nL8N3HR24D

  • Battle for Anglo's copper assets tests BHP resolve as May 29 deadline looms

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  May 24 - 06:00 AM
  • AUD/USD hits 0.6615 after pushing its recovery envelope from 0.6592

  • 0.6592 was Asian session base (lowest level since May 14)

  • Rise to 0.6615 aided by positive US stock futures (AUD is risk-sensitive)

  • Offers expected around 0.6650 (former support point) if ascent extends

  • 0.6653 was Thursday's high, before USD strengthened on US PMI beats

  • Aussie CPI data due next week. China stages mock missile strikes on Taiwan

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  May 24 - 04:40 AM
  • Three-month low Thurs but stopped short of key support at 0.8498

  • The Feb and 2024 low intact and EUR revisits 0.8528 Thurs high

  • Daily RSI diverged on the low and price now trading away from a daily doji

  • We are positioned for a corrective rally and target 0.8580

  • Retrace levels off 0.8620-0.8500 drop start at 0.8528 and 0.8546

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  May 24 - 04:25 AM

Two levels may define the next big EUR/USD move, and should the pair wake from a long slumber, a break could catch many traders unaware, resulting in a rather disorderly and rapid period of adjustment that leads to a big rise in volatility.

EUR/USD hasn't moved far since the start of last year, with most trading unfolding within 1.05-1.10 and volatility dropping substantially - and then remaining suppressed.

During this period, the 200-WMA has been of particular significance, helping to define the high twice when traders have been very bullish.

This year, the 100-WMA helped to shape the low during the only period when traders have bet against the euro since September 2022.
Having done so, the 100-WMA now represents a crucial marker on the downside.

Both the 200-WMA, currently 1.1126, and 100-WMA at 1.0639 are slowly converging and a break beyond one of these points is certain.

Betting on the euro's direction is running at a low ebb, and so represents very little restraint on any move.
The lack of concern about future movement reflected by low option vols may leave traders badly hedged for a breakout that must happen.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  May 24 - 02:40 AM
  • Ahead UK split with EU base of GBP/USD range was around 1.40

  • Since split with EU the peak of the ranges was around 1.45

  • After UK policies created bond turmoil the range dropped again

  • GBP/USD almost reached parity and highest traded since is 1.3144

  • Peak of monthly Ichimoku cloud and 100-MMA defined the 1.3144 high last year

  • Break over monthly cloud 1.2895-1.3008 & 100-MMA 1.2972 may be game changing

  • Balanced UK/US int/rates lessen chance of sustained rise above 1.3144

  • Big rise for trade-weighted pound will support an upside test

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  May 24 - 02:00 AM
  • USD/JPY gains to 157.19 Thurs and our long stop raised to 155.25 entry

  • We target 165.00 but will monitor price on a test of 158.26, a 76.4% Fibo

  • Can sometimes see profit taking at this Fibo, ahead of a full

  • The Fibo retracement level is taken off the 160.24-151.86 Apr. 29-May 3 drop

  • Fourteen day momentum confirming latest rally and RSI is rising

  • The developing bull trend is supported by the 10DMA, currently at 156.20

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  May 24 - 01:40 AM
  • EUR/USD erased early Thurs gains and fell below the 10-DMA and May 15 low

  • Daily RSI turned down and a daily inverted hammer formed

  • Those are bad signs for our long play

  • Trade needs the daily cloud top and 200DMA to hold

  • The support points are currently at 1.0788-90, respectively

  • A close under 1.0813, 100-day average, would add further downside pressure

  • Our stop adjusted to just below 1.0790

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  May 23 - 11:35 PM
  • Off 0.07% capped by soft risk appetite in Asia, as stocks slid

  • Bundesbank President Nagel to speak - likely cautious on cuts after June

  • US durable goods and consumer sentiment are event risk for EUR/USD

  • Charts - negative momentum studies, 10, and 21-day moving averages climb

  • 21-day Bollinger bands rise - uptrend stalled, but signals are net positive

  • A close below the 1.0785 21-DMA would turn the bias lower for next week

  • 1.0785 21-DMA and the 1.0861 New York high are initial support/resistance

  • 1.0820/30 2.292 BLN are the close strikes for May 24th

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  May 23 - 10:10 PM
  • AUD/USD drifts lower in Asia as traders push back Fed rate cut expectations

  • 25 bps Fed rate cut now fully priced only in Dec as inflation remains sticky

  • Higher US yields weigh on AUD ; 2-year yield holds at roughly 3-week peak

  • Traders await U.S. core PCE price index next Fri, key for Fed rate outlook

  • Downside limited as higher-for-longer RBA equally cautious on rates

  • Australia Apr retail sales, CPI data next week key for RBA rate expectations

  • Support 0.6580, resistance 0.6630-35, 0.6645-50; Asia range 0.6607-0.65945

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  May 23 - 07:45 PM
  • Steady after closing -0.05% with the USD up 0.1%, as inflation fears rise

  • Euro zone business activity expanded at its fastest pace in a year

  • ECBWATCH prices 58.1 in cuts for December from 65.7 at last Friday's close

  • Charts - negative momentum studies, 10, and 21-day moving averages climb

  • 21-day Bollinger bands rise - uptrend stalled, but signals are net positive

  • A close below the 1.0785 21-DMA would turn the bias lower for next week

  • 1.0785 21-DMA and the 1.0861 New York high are initial support/resistance

  • 1.0820/30 2.292 BLN strikes likely cap the EUR/USD today in Asia

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  May 23 - 07:10 PM
  • USD/JPY to stay supported on robust US economic data, waning Fed rate bets

  • Closed 0.1% higher Thursday after trading in a 156.53-157.19 range

  • Boosted by higher US yields; 2-yr up 5 bps to roughly 3-week peak

  • Yawning US-Japan yield differentials encourages carry trade, weighs on JPY

  • Japan inflation data Friday key for BOJ rate expectations

  • Annual core inflation expected to fall to 2.2% in April from 2.6% previous

  • BOJ's Ueda sticks to economic recovery view, keeps alive rate hike chance

  • Breakingviews-Japan’s new widowmaker trade may have shorter life

  • Resistance 157.20-30, 157.90-158.00, support 156.50-55, 156.00-10

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  May 23 - 06:40 PM
  • AUD/USD on the defensive in Asia after closing 0.25% lower on Thursday

  • Weighed down by robust U.S. economic data, waning Fed rate cut bets

  • Undermined by higher U.S. yields; 2-yr up 5 bps to roughly 3-week peak

  • Lower commodity prices diminish AUD allure; copper, iron-ore, gold slide

  • Downside limited as higher-for-longer RBA equally cautious on rates

  • Support 0.6580, resistance 0.6630-35, 0.6645-50; Thu range 0.6653-0.6598

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  May 23 - 03:00 PM

Synopsis:

ING discusses the implications of UK Prime Minister Rishi Sunak’s surprise announcement of a general election on 4 July for sterling and the Bank of England’s monetary policy. The analysis suggests minimal impact on GBP due to well-anticipated election outcomes and current political stability.

Key Points:

  • Election Announcement: The announcement was unexpected but has caused only a slight increase in GBP volatility, indicating limited immediate market reaction.
  • Market Sentiment: Current opinion polls favor Labour, suggesting a possible smooth transition without significant policy upheaval. This stability diminishes the potential for election-related GBP volatility.
  • Impact on Monetary Policy: The election timing is not expected to influence the Bank of England's existing monetary policy trajectory, which is focused more on domestic economic indicators.
  • Sterling's Outlook: Despite the election, the primary drivers for GBP will remain UK economic data, BoE policy actions, and comparative moves by the Federal Reserve.
  • EUR/GBP Forecast: ING maintains a bullish stance on EUR/GBP, viewing the recent inflation data and the subsequent adjustment in BoE easing expectations as more significant than the election news.

Conclusion:

The surprise announcement of a UK general election in July is not expected to alter the broader narrative for sterling, which remains vulnerable due to potential overpricing of BoE easing. The key factors influencing GBP's trajectory will continue to be domestic economic performance and central bank policies rather than short-term political developments

Source:
JP Morgan Research/Market Commentary
By Paul Spirgel  —  May 23 - 02:25 PM

The dollar index reversed its early slide, trading up 0.1% at 105 in the U.S. afternoon with the help of forecast-beating U.S. PMI data that pulled U.S. Treasury yields higher and reduced Fed rate cut expectations further.

LSEG’s IRPR page is now indicates 58% odds for a September Fed cut and slightly above 80% odds for a November move, well below pre-data levels.
For the full year futures are indicating 36bp worth of easing, well below early 2024 levels of -160bp.

EUR/USD was down 0.06% at 1.0815, as early gains that followed upbeat German and euro zone PMIs unraveled in the wake of U.S. PMI.

With ECB expected to cut quicker and deeper than the Fed, the euro is likely to remain under pressure.
LSEG’s IRPR shows near 100% odds for a June rate cut and 58bp worth of cuts by year-end.

USD/JPY was up 0.07% at 156.99 after earlier hitting a trend high of 157.19 on the PMI data.
With no sense of BoJ or MOF interventions on rates or currency, the wide interest rate spread between the U.S. and Japan should continue to exert downward pressure on the yen, though the market may become hesitant as 160 approaches, fearing official action.

GBP/USD followed other major currencies lower, down 0.15% at 1.2699.

Recent support by Wednesday’s 1.2701 was being tested.

Mixed UK PMI data lent no support to the pound after more upbeat U.S. PMIs.
Despite the soft performance, GBP/USD remained near Wednesday’s trend high at 1.2761.

Given the parallel path of UK and U.S. rate expectations, with futures signaling the Fed and BoE beginning to cut rates in September or November and near 35bp of cuts by December meetings, barring a data surprise GBP/USD is likely to remain anchored near current levels.

Ethereum rose 1.3% to $3,793, after putting in a new trend high at $3,946.
Bitcoin, which had been following ETH higher, fell 2.5% to $67.6k, down from a session high above $70k.
Both were hurt by higher Treasury yields, though upbeat ETH ETF expectations were providing support.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  May 23 - 01:35 PM
  • GBP$ soft into NorAm close, -0.07% at 1.2708; NorAm range 1.2746-05

  • Higher UST yields, lower Fed cut odds post-PMIs weighs on GBP/USD

  • Eyes on this year's sterling high as rate debate rages nL1N3HQ1JC

  • Despite the slide from Wed's 1.2761 high support still holding by 1.27

  • Supt 1.2701 May 22 low, 1.2691 61.8% of 1.2648-1.2761, 1.2657 rising 10-DMA

  • Both Fed and BoE cut odds reducing yields no advantage to USD or GBP

  • IRPR shows Fed/BoE Sep cut odds just abv 50%, Fed -35bp, BoE -31bp by Dec meets

Source:
Refinitiv IFR Research/Market Commentary
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