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By John Noonan  —  Dec 04 - 04:20 PM
  • NZD/USD has fallen 0.67% in early Asia and leads the USD broadly higher

  • NZD outperformed in Friday - gaining around 1.0% against the AUD and CAD

  • NZD/USD rose 2.7% last week and NZD gained against every currency bar JPY

  • Rapid and stretched rise in the NZD/USD may be encouraging profit taking

  • Key fibo resistance is at the 61.8 of the 2022 high/low at 0.6552

  • Support is at the 200-day MA at 0.6285

  • AUD/NZD likely to be impacted by RBA decision on Tuesday

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Dec 02 - 01:55 PM

  • USD/JPY fell 0.5% after a wild ride from 134.73 to 135.98 on EBS

  • Hottish jobs data triggered a 134.05-5.98 rally as Tsy ylds rebounded

  • Fri's high was capped at 38.2% of the Wed-Fri Powell-led drop

  • Prices fell back, finding some support by the 200-DMA at 134.52

  • Today was the first day it traded below the 200-DMA since Feb. 2021

  • Initial rebound in Tsy yields receded, weighing on the dollar

  • Friday's low completed 97% of a 151.94-132.46-55 tech targeted drop

  • ISM non-mfg Monday and Dec. 13, 14 CPI and FOMC now key nL1N32S1AI

  • Markets not buying Fed guidance rates to stay high through 2023

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Dec 02 - 01:40 PM
  • EUR/USD rallied to 1.0545 overnight, NY opened just below Europe's high

  • Nov. NFP, AHE are above estimates nL1N32R2TN; US rates EDH3, US$ rally

  • Equities ESv1, commodities fall while USD/CNH rallied above 7.0700

  • EUR/USD dived lower, pair hit 1.04295 on EBS but the slide halted

  • Risk sentiment slowly improved; rates & dollar erase some gains

  • EUR/USD rallied, turned slightly positive, sat near 1.0530 late in the day

  • Techs are bullish; RSIs are rising, daily long legged doji candle formed

  • Payrolls reaction might encourage EUR/USD bulls nL1N32S19R

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Dec 02 - 01:40 PM

The dollar enjoyed a fleeting rebound on Friday following unexpectedly strong U.S. jobs data but retreated to flat on the day after traders took the blip higher as a selling opportunity on the assumption that the Fed will have to cut rates in late 2023, no matter officials' attempts to persuade markets otherwise.

Treasury yields and the dollar spiked higher in the initial response to the jobs data nL1N32R2TN, in part because expectations had been dragged down by dour ISM manufacturing, ADP and Challenger job cuts data earlier in the week and by Fed Chair Jerome Powell's surprisingly un-hawkish comments on Wednesday.

But the dollar index rebound was rejected by the 200-day moving average it broke below on Thursday, with a bullish rejection of sterling's fleeting retreat to its 200-DMA.

EUR/USD was flat in late trade and its rebound from Friday's 1.04295 low on EBS toward to a high of 1.0545 put it on course for a bullish close above the 50% Fibo of this year's downtrend at 1.0511.

Two-year bund-Treasury yield spreads remain near their highest since June, with ECB Vice-President Luis de Guindos saying rates need to keep rising to reach the 2% inflation goal nL8N32S34E and European Central Bank President Christine Lagarde again warning some fiscal policies in Europe could fuel excess demand and result in higher rates nL1N32S07N.

The market is pricing ECB rates peaking in June by 2.81% and then slipping slightly to 2.71 by year-end.

USD/JPY fell 0.45% after its post-payrolls recovery to 135.98 on EBS from its pre-jobs report trend lows at 133.62.
Prices are now near the 200-DMA at 134.52 breached on Friday for the first time since February 2021.

Friday's lows had already taken prices 97% of the way to reaching key technical objectives at 132.55/46 from October's 32-year peak nL1N32S1AI.

The focus is now on Monday's ISM non-manufacturing report, after its dismal manufacturing data Thursday, then CPI on Dec.
13 and the Dec.
13-14 Fed meeting.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Dec 02 - 02:00 PM

MUFG Research discusses EUR/USD seasonal outlook in December. 

EUR/USD has now rebounded by nine big figures since reaching a trough on 28th September and following Powell’s dovish speech on 30th November, the momentum remains firmly in favour of higher EUR/USD. There is also a strong seasonal bias to be mindful of in December," MUFG notes.

"In the last ten years, EUR/USD has gained on eight occasions in December, by an impressive average of 1.5%. Over a twenty-year period, EUR/USD has gained on 14 occasions. This could be a reflection of position squaring ahead of year-end. On average over these periods, market participants have run EUR short positions. That influence could be powerful this year given the scale of long dollar positioning given the huge move in 2022. That said, the EUR/USD gains in October and November may mean this has already started," MUFG adds. 

MUFG Research/Market Commentary
By Christopher Romano  —  Dec 02 - 11:50 AM
  • GBP/USD fell sharply after the US Nov. employment data nL1N32R2TN

  • The slide stalled short of the Nov. 28 daily high, 1.21365 traded

  • Buyers emerged however as the US$ weakened & risk improved

  • GBP/USD erased the data-induced fall and turned positive on the session

  • A daily hammer candle formed and daily RSI turned up again

  • Daily technical signals reinforce already bullish monthly signals

  • GBP/USD longs likely target 61.8% Fib 1.3749-1.0327, May monthly high

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Dec 02 - 11:15 AM

Credit Agricole CIB Research discusses the USD outlook and sees a scope for USD gains into year-end.

"While we still think that most of the recent USD weakness resulted from a correction of excessive FX market longs, we further note that investors have more recently started reassessing their Fed outlook against the backdrop of stabilising US inflation and softening growth momentum. We expect these economic trends to persist, and this makes us think that the USD should peak in 2023. We also believe, however, that it is very early to expect a Fed ‘pivot’ and continue to expect further aggressive tightening that could fuel headwinds to global risk sentiment and help the high-yielding, safe-haven USD regain some ground into year-end," CACIB notes. 

"We further note that a sizeable chunk of the market USD longs have been unwound while the USD is looking cheap relative to its relative rate appeal across the board," CACIB adds. 

Crédit Agricole Research/Market Commentary
By Christopher Romano  —  Dec 02 - 10:45 AM

Above-forecast U.S. jobs data isn't usually fodder for EUR/USD bulls, but Friday's price action might give them some encouragement.

EUR/USD retreated from 6-month highs after unexpectedly strong employment data drove rates EDH3 and the dollar higher, but it held onto gains for the week, its up trend off the September low unscathed.

The price suggested profit taking before the weekend and the possibility that investors may be looking past the employment report amid elevated expectations of an economic slowdown.

Interest rates markets supported this view.
Though U.S. Treasury 2-year US2YT=RR and 10-year US10YT=RR yields rallied after the payrolls report, they remain lower on the week, down trend intact.

Similarly, while Eurodollar futures prices EDH3 fell as traders factored in a higher terminal Fed rate, they're still higher on the week and well above the November monthly low.

Treasury yield spreads continue to signal slower economic growth is likely.
The 2-year/10-year spread inverted further after the jobs data while the 3-month/10-year spread tightened only marginally.

Market reaction so far suggests investors may still be willing to sell the dollar unless U.S. rates rally significantly.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Dec 02 - 09:06 AM

CIBC Research discusses its reaction to today's US and Canada's jobs reports for the month of November.

"The Fed is looking for a cooling in the labor market in order to get inflation back to target, and the November employment data didn't deliver much on that front. Hiring was a robust 263K, above the 200K consensus expectation, even when accounting for a 23K negative revision to the prior two-month job tally. Also worrisome for the Fed was an acceleration in wage growth to 0.6% m/m (vs. 0.3% consensus), and an upward revision to the prior month (now 0.5% vs. 0.4% previously), which left the annual pace at 5.1% (vs. 4.6% consensus). There were a couple of pockets of weakness in the report, as the household survey showed a decline in employment for the second month in a row, but when combined with a drop in the participation rate, the unemployment rate was unchanged at 3.7%, as expected. Aggregate hours worked also fell by 0.2% m/m. Overall, this report is still consistent with a 50bp hike from the Fed in December," CIBC notes. 

"After a roller coaster few months, the Canadian labour market moved sideways in November. The 10.1K job gain was in line with consensus expectations, as gains in full-time jobs were almost fully offset by losses in part-time employment. Employment increased in finance, real estate and manufacturing, but fell in construction, wholesale and retail trade. The unemployment rate ticked down to 5.1% as the labour force participation dropped by one tick to 64.8%. Wage growth of permanent employees also fell by one tick to 5.4%, as expected...However, given still strong wage growth, the composition of job gains in November (mainly private sector and full-time), and the low unemployment rate, this report supports our view that the Bank of Canada will increase rates by 50 bps next week, before pausing in 2023," CIBC adds.

CIBC Research/Market Commentary
By eFXdata  —  Dec 02 - 08:21 AM

ANZ Research likes buying the USD on further dips.

"Fed Chair Powell’s comments ignited a risk rally this week, pushing the DXY below 105 and breaking the 200-day moving average for the first time since the middle of 2021. Weaker than anticipated personal consumption and labour market data also bolstered the USD’s decline. We see a decent probability that equities momentum can continue until the next US CPI report on 13 December," ANZ notes.

"The DXY retracement has moved further and faster than many anticipated. We think further positioning-driven downside, perhaps following non-farm payrolls, could be an opportunity to reset tactical longs in the USD, or short AUD ahead of the RBA next week," ANZ adds.

ANZ Research/Market Commentary
By Christopher Romano  —  Dec 02 - 07:10 AM
  • US$ lower against most majors, weighed down by lower US rates EDH3

  • USD/CNH fell below 7.0070 before bouncing near 7.0270 ahead of NY open

  • Equities ESv1, commodities HGv1, AUD/JPY all lower on the session

  • AUD/USD up slightly on the session, traded 0.6795-0.6836 range overnight

  • NY opens near the mid-point of that range, pair trades +0.08% on the session

  • Techs lean bullish; RSIs rising, pair consolidating gains off Nov. 29 low

  • US Nov. Jobs data looms; downside surprise should see US$ sink, AUD/USD gain

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Dec 02 - 06:00 AM
  • Short term traders holding USD/JPY positions before NFP data should beware

  • The premium in short dated expiry options to capture volatility is huge

  • Overnight expiry options captured NFP from Thursday and spiked accordingly

  • Premiums have significantly increased since, fuelled by more USD weakness

  • Premium/breakeven for overnight expiry straddles 170-pips either direction

  • That's up from 105-JPY pips when first capturing today's U.S. jobs data

  • Related comment nL1N32S0KF

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Dec 02 - 04:35 AM
  • GBP/USD has surged 1.0327-1.2311 in just 9 weeks

  • This is half the prior drop influenced by changing U.S. mon policy

  • 1.2285 is 50% 1.4250-1.0327 decline

  • Weekly peaks end-Jun were 1.2325 and 1.2330, top 20-day Bollingers 1.2339

  • Year-end likely to suppress risk appetite, weighing rally

  • This is a good point for EUR/USD traders to book profits nL1N32S0E3

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Dec 02 - 03:45 AM
  • History suggests USD set for a rough December nL1N32R0L2

  • The EUR/USD weekly chart shows this market has much more upside

  • If there is a close at the end of this week above the 1.0512 Fibo = bullish

  • 1.0512 Fibo is a 50% retrace of 1.1495 to 0.9528 (Feb to Sept) EBS drop

  • Fourteen-week momentum remains positive, reinforcing the bullish market

  • We are looking to get long at 1.0465 in anticipation for much bigger gains

  • EUR/USD Trader TGM2334. Previous update nL1N32R0H2

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Dec 02 - 02:50 AM
  • USD/JPY's slump has broken and closed under the 135.48 Fibo = bearish

  • 135.48 Fibo is a 76.4% retrace of the 130.40 to 151.94 (Aug to Oct) EBS rise

  • Fourteen-day momentum remains negative, reinforcing the negative outlook

  • Near-term focus is on 200-DMA at 134.52, a break below would weaken

  • Scope grows for much bigger losses to 131.74, 130.40 lows set back in August

  • USD/JPY Trader TGM2336. Previous nL1N32R0F6

  • EUR/JPY range has been 141.78-142.44, on Friday, according to EBS prices

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Dec 02 - 02:50 AM
  • Traders are heavily long and making money

  • There is never a bad time to book profits, perhaps a better one

  • EUR/USD is approaching target for min tech correction of the downtrend

  • A 38.2% retrace 1.2266-0.9528 drop is 1.0574

  • EUR/USD is relatively overbought - at 1.0532 peak 20-day Bollingers bands

  • Notable bearish signal - 100-WMA 1.1196 crossing below 200-WMA 1.1251

  • It's almost year-end- a period that often sees risk pared

Refinitiv IFR Research/Market Commentary
By Ewen Chew  —  Dec 02 - 01:30 AM
  • AUD/USD resumes rise after sputtering open Fri, last 0.6823

  • Bollinger uptrend channel in effect; base now at 0.6784

  • Hesitation before US NFP initially depressed AUD/USD to 0.6795

  • But nascent hope for soft US jobs number starts to appear

  • If below 200k forecast, USD to slide as inflation cools nL1N32R15S

  • But a strong beat could send AUD/USD down and out of uptrend channel

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Dec 01 - 10:20 PM

  • Off 0.2% near the base of a 1.2231-1.2274 range, profit taking on firmer USD

  • Moderate interest on D3, but heavy EUR/GBP flow in a tight 0.8583-91 range

  • U.S. payrolls - poll suggests +200k, data suggests risk is for lower number

  • Charts; daily momentum studies rise, 5, 10 & 21 day moving averages climb

  • 21 day Bollinger bands contract - positive setup while 1.1860 21 DMA holds

  • 1.2291, the well tested August high held on the close, but vulnerable

  • Sustained 1.2300 break would target a test of 1.2441, 61.8% 2022 fall

  • 1.2042 10 DMA, a recent base on the close, is initial major support

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Dec 01 - 10:10 PM
  • AUD/USD opened +0.35% at 0.6812 after US yields fell and weighed on USD nL1N32R28E

  • Asia was a bit cautious with E-minis easing 0.30% and AXJ index -0.50%

  • AUD/USD fell to 0.6795 before settling around 0.6800 in quiet trading

  • Market awaiting US non-farm payrolls - which should provoke some action

  • Hourly support is at the NY pullback low at 0.6782

  • More support at the 10-day MA at 0.6726 and break would ease upward pressure

  • Sellers are tipped ahead of 0.6850 with key resistance at 0.6915/25

  • The 50% of the 2022 high-low is at 0.6915 and the 200-day MA is at 0.6924

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Dec 01 - 08:10 PM
  • AUD/USD under some pressure early Asia, as it moves below 0.6800

  • E-minis are down 0.325 while the AXJ equity index is off 0.40%

  • Support is at the NY pullback low at 0.6782 where bids are tipped

  • More support is at 10-day MA at 0.6726 and break would ease upward pressure

  • Sellers are eyed ahead of 0.6850 where it topped out Thursday

  • Market is a bit cautious ahead of US non-farm payrolls later today

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Dec 01 - 07:25 PM

  • +0.05% early after closing up 1.1% - U.S. dollar weaker across the board

  • Yield spreads euro positive - 10yr bunds -14bp and 10yr UST -18bp this week

  • EU edges towards a USD 60 price cap on Russian seaborne oil nL8N32R4BW

  • Will be interesting to see how the mechanics of the cap work in reality

  • Charts; momentum studies, 5, 10 & 21 day moving averages edge higher

  • 21 day Bollinger bands contract - bounce leaves positive signals

  • Close above 1.0511 50% 2022 fall targets 1.0615, late June range high

  • 1.0475 709 mln and 1.0600 579 mln are December 1st significant close strikes

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Dec 01 - 06:00 PM
  • EUR/USD opens +1.18% after mixed data sent US yields lower nL1N32R24OnL1N32R28E

  • Break above the 50% of the 2022 high/low at 1.0511 should fuel next leg up

  • Resistance is at series of daily highs at 1.0600/15 made in mid-June

  • Objective or trend higher is the 61.8 of the 2022 high/low at 1.0743

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

  • Support is at the 10-day MA at 1.0387 and 200-day MA at 1.0367

  • Outlook bullish, but US non-farm payrolls today may impact US yields

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Dec 01 - 04:00 PM

Credit Agricole CIB Research highlights 5 peak USD drivers.

"We think that the big theme of 2023 could be the peak of the USD rally," CACIB notes.

"In this focus piece we explore five potential drivers of that: 1. A US recession 2. A peak Fed tightening cycle 3. US external imbalances 4. USD overvaluation and overhang of USD longs 5. FX intervention to weaken the USD," CACIB adds.

Crédit Agricole Research/Market Commentary
By Krishna K  —  Dec 01 - 04:55 PM
  • USD/JPY down 2% Thursday as liquidation of stale long positions continues

  • Weighed down by Fed signaling a "go-slow" approach on further rate hikes

  • Choir of Fed speakers promote slower pace of rate hikes starting in December

  • Lower US yields on signs inflation moderating undermine USD nL1N32Q3FZ

  • U.S. manufacturing sector contracts in November - ISM nN9N2YW01S

  • US 10-year yield down 11 bps; Fri jobs data and payrolls report now pivotal

  • Support at 135.48, 76.4% Fibo of Aug-Oct rally being eroded

  • Next target 200-DMA at 134.43; resistance 136.25-35, 136.65-75

  • Thursday global range 138.11-135.21; related nL1N32R1MPnS0N30D04V

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
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