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By Jeremy Boulton  —  Feb 28 - 04:50 AM

USD/JPY's sell-off is likely to stop near the base of the weekly Ichimoku cloud at 107.66.
The pair has dropped over 3% in six days as traders react to massive drops in equity markets nL2N2AS06U.
The sell-off has been exacerbated by the fact that traders rushed to buy the pair for two days just ahead of the stock market's reverse.
That bullish phase probably led to a change in the mid-term range, which had been 105-110.
Judged by the huge buying since that range gave way, Japan is betting the range has risen, and Japanese investors will get a huge amount of new money to invest in April.
The range may shift closer to 107-112 or 108-113.
Near-certain changes in interest rates should matter less than the stimulus they will provide.
For USD/JPY, a narrowing in the US/Japan rate gap should have less impact than the support that stimulus provides for stocks and risk appetite, which should support USD/JPY.

USDJPY: Click here

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Feb 28 - 03:20 AM

EUR/USD has returned the middle of this year's range, but it may be near the peak of a developing range.
EUR/USD traders have not done well this year.
They bought at the start of the year, and EUR/USD fell.
So they sold.
The pair slumped, then jumped.
EUR/USD has returned to the middle of this year's 1.0788-1.1225 extremes.
That neutral level reflects traders' uncertainty.
There's a net short remaining and in light of the broader unwinding of risk there may be more short covering nL2N2AS058.
That said, there's also cause to seek a continuation of the downtrend.
Volatility is higher but is historically low.
Traders should expect more movement but not great movement.
The level of vols suggests the trend holds.
The trend has been a series of gradually declining ranges.
The peaks of ranges occurring near the 200-DMA.
That's now 1.1099.
If EUR/USD were to quickly rise and close over the 200-DMA and daily ichimoku cloud 1.1110-26 it should be a game changer.

EUR/USD: Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Feb 28 - 02:00 AM
  • EUR/USD: 1.0900 (2.2BLN), 1.0920-35 (1.1BLN), 1.0950 (1.6BLN), 1.0975-80 (1.1BLN), 1.1000 (732M), 1.1050-60 (1.4BLN)

  • NB: On Monday March 2 – EUR/USD 2.7bln at 1.1000

  • GBP/USD: 1.2940 (386M), 1.3105 (376M)

  • AUD/USD: 0.6600-05 (900M), 0.6640 (371M), 0.6655 (420M)

  • NZD/USD: 0.6325-35 (660M), 0.6425 (301M)

  • USD/JPY: 108.70 (740M), 109.25-35 (800M), 109.50 (355M), 109.75 (400M),

  • EUR/JPY: 119.95-120.05 (1.3BLN). AUD/JPY: 72.50 (1BLN), 72.75 (550M)

Refinitiv IFR Research/Market Commentary
By Ewen Chew  —  Feb 28 - 01:05 AM
  • AUD/USD broke its 11-year low to reach a new trough 0.65165

  • Breach of 0.6500 psych barrier likely; momentum selling to follow

  • March 2009 lows of around 0.6300 could be next chart base

  • Coronavirus reaches New Zealand, fuelling panic nL3N2AS1NA

  • Asia stocks tank as fear gauge runs high; Nikkei -4.3%, Kospi -3.5%

  • Poll shows RBA to hold rates in March, but cut by June nL3N2AS0XO

  • Moody's hints at global recession in H1 due to pandemic nL3N2AR0AY

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Feb 27 - 10:15 PM
  • EUR/USD moved higher early Asia when Wall Street melted down into the close nL3N2AR5DK

  • It traded to 1.1005 before sellers capped and then edged down to 1.0985

  • Resistance is found at the 50% of the 1.1240/1.0778 move at 1.1009

  • A break above 1.1010 targetst he 61.8 of that move at 1.1063

  • EUR/USD supported by extreme dovish shift in Fed expectations nL2N2AR10V

  • Also supporting is unwinding of carry trades and short EUR/USD vol nL3N2AR5LDnL4N29M3KY

  • Support at the 21-day MA @ 1.0913 and break would suggest correction waning

eur/usd Click here

Refinitiv IFR Research/Market Commentary
By Krishna K  —  Feb 27 - 09:40 PM
  • USD/JPY extends o/night losses in Asia as risk mood reels; Nikkei -3.5%

  • Support at 109.30-40 manages to hold as S&P e-minis bounce an anaemic 0.5%

  • Pull back attempts now capped by 109.65-70, former support turned resistance

  • Soaring Fed rate cut expectations cap; probability of Mar cut now at 96.3%

  • US 10-year note consolidates after posting record low 3 days in a row

  • Japan Jan IP, retail sales top forecasts, won't last, ignored nL3N2AS02G

  • Clear break of 109.30 opens 108.70-75; resistance 109.65-70, 109.90-110.00

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Feb 27 - 07:55 PM

AUD/USD is proving resilient despite the collapse in risk assets, as assumed correlations appear to be breaking down.
In previous bouts of high volatility when markets destabilised and investors fled to safe havens, the AUD fell dramaticallyagainst currencies such as the JPY, USD and CHF.
This was mostly due to the unravelling of carry trade strategies involving the 'high-yielding' AUD. The AUD is no longer high yielding, with Australian yields well below those offered by the USD. Hence, leading into the coronavirus crisis, there was no large build-up of long AUD positions tracking the record rise in equities and strong gains in EM assets. In previous market routs, FX investors sold currencies of countries with large current account deficits and bought those with large surpluses, such as the JPY.
Australia is currently running a record current account surplusnL4N28C43U.
These factors have cushioned the AUD in recent days, but the prospect of slowing global growth will limit AUD/USD gains.
Weak Chinese demand for Australian exports will negatively impact the economy and likely force the RBA to lower the cash rate and eventually resort to QE.
The AUD/USD will probably struggle to break above the 21-day MA (0.6670), but bears looking for a sharp fall towards 0.6000 resulting from the coronavirus crisis might be disappointed.

audusd Click here

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Feb 27 - 01:15 PM

The dollar fell against negative-yielding reserve currencies such as the EUR, JPY and CHF, as coronavirus fears sent Treasury yields to record lows and markets briefly priced in expectations for at least three Fed rate cuts this year, possibly starting at the March 18 meeting.
Earlier this month, when the COVID-19 outbreak started slowing in China and before it accelerated in other countries, the market was only pricing in about two Fed cuts this year, and perhaps not beginning until September.
Because the ECB, BOJ and SNB already have negative policy rates, any cuts they make are expected to be a small fraction of those done by the Fed, whose current target rate is 1.75%.
The USD index was down 0.5% in early New York afternoon after hitting its lowest since Feb.
EUR/USD has rallied back above January’s lows and very nearly retraced half of its Dec.
31 to Feb.
20 slide at 1.1009.
U.S. Q4 GDP was unrevised, though the deflator slipped to 1.3% from 1.5% previously.
The modestly above-forecast U.S. claims miss and today’s U.S. durable goods and housing data beats were largely disregarded amid the virus angst.
That angst sent S&Ps, the N225 and the DAX below their 200-DMAs and the indexes more than 10% below their recent highs, erasing the majority of their recoveries from last year’s trade war lows.
USD/JPY made a new low for the week before bouncing as the tug-of-war between the haven yen and dollar persists and Japan braces for a likely recession.
PM Abe asked that all schools be closed as of Monday as part of the effort to contain the virus there.
GBP/USD dipped toward 2020’s low, but the main action was in EUR/GBP’s continuing rebound as EUR spec shorts get squeezed and on doubts about the UK outlook heading into Brexit talks with the EU next week.
Once again, commodity and EM currencies struggled with further risk-off flows, while gold was firm on those flows and the drop in yields.
Lots of Japanese data out Friday, but the focus, beyond virus headlines, will more likely be on German February jobs and CPI data and U.S. January personal consumption and expenditure data and February Chicago PMI and final Michigan sentiment.

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 27 - 04:00 PM

NAB Research discusses USD/JPY outlook and maintains its base-case for the pair to remain contained in a 108-112 range.

"In our 2020 GFXS outlook published back in December last year, we argued that USD/JPY was expected to be largely contained in a ¥108-¥112 range over the course of this year. We retain this view and keep our ¥109 forecast for Q1 and Q2, reflecting our bias for the pair to spend a bit more time on the lower half of its expected range," NAB notes. 

"This view is also extended to H2-20 where our forecasts have been slightly tweaked from ¥108 and ¥110 in Q3 and Q4 respectively to ¥109 for both quarters. A gentle JPY strengthening theme remains in place in 2021," NAB adds. 

NAB Research/Market Commentary
By Christopher Romano  —  Feb 27 - 01:15 PM
  • Fed cuts expectations, possible De stimulus boost EUR/USD early [nL2N2AR0N6]

  • Rally nears 50% Fib of 1.1240-1.0778, Feb 6 high then runs out of gas

  • UST yields, US equities rally sharply off their lows, drives a US$ bounce

  • Some EUR/USD gains erode, nears 1..0960 before nearing 1.0980 late

  • Recent EUR/USD panic buying could be an opportunity for some nL2N2AR12W

  • Slew of EZ data tomorrow, virus impact could be reflected in some reports

chart: Click here

Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Feb 27 - 01:15 PM
  • Fall in US rates up Fed cut chances FEDWATCH AUD/USD lifts nL2N2AR0DR

  • Pair barely manages to rally above 0.6580 despite USD/CNH drop below 7.0000

  • Extension of commodity price drop, RBA cut chances temper AUD/USD bulls

  • Pair barely reacts to rally in global bond yields & US stocks off day's lows

  • Meager AUD/USD rally should be a concern for longs nL2N2AR1B9

chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 27 - 11:45 AM

 Citi Research sees a scope for the BoC to cut rates if the Fed moves and cuts rates on increasing concerns from the negative impact from Coronavirus on the economy. 

"CAD is through key resistance at 1.3330 with USDCAD currently trading above 1.3345 at the time of writing on the back of renewed oil weakness," Citi notes. 

"CitiFX Technicals sees room to head to the January 2019 high at 1.3565. We also flag that CitiFX Strategy sees scope for BoC to cut should the Fed move," Citi adds. 

Citi Research/Market Commentary
By Rob Howard  —  Feb 27 - 10:15 AM
  • EUR/GBP eyes 0.8535 (Feb 4 high) after building on Ldn am gains nL2N2AR0C4

  • Ascent to threaten 0.8535 has been fuelled by EU-UK trade concerns

  • Britain on collision course with EU over trade nL5N2AR4EHnL5N2AR4E7

  • Risk aversion lends support too: EUR above GBP on safe-haven currency ladder

  • European stocks plunge as pandemic fears mount nL3N2AR37FnL5N2AR5WB

  • Offers may emerge near 0.8547 (GBP/EUR 1.17) if EUR/GBP vaults 0.8535

EURGBP: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Feb 27 - 09:01 AM

UOB Research discusses AUD/USD technical outlook and flags a scope for a test of the 0.6500 level in the near-term.

"Rapid improvement in momentum suggests AUD is likely to test 0.6500 next. We have held the same view since last Friday (14 Feb, spot at 0.6615) that “the risk for AUD is on the downside towards 0.6550”. After trading sideways for a few days, AUD plunged to an overnight low of 0.6542," UOB notes. 

"The rapid pace of decline was not exactly expected and the rapid improvement in momentum suggests AUD is likely to test 0.6500 next. On the upside, only a breach of 0.6610 (‘strong resistance’ level previously at 0.6680) would indicate the current weakness has stabilized," UOB adds. 

UOB Research/Market Commentary
By Peter Stoneham  —  Feb 27 - 06:50 AM
  • Cruel market as our 0.8345 long stop was just 7-pips above Wed low

  • EUR/GBP subsequently rebounds strongly and levels above 0.8500 seen

  • Cross now spans daily cloud, 0.8441-0.8506

  • Cloud top offering up resistance but bid is holding

  • 14-day momentum likely to turn positive before week is out

  • Bull targets are 0.8535 and 0.8595, Feb 4 and Jan 14 highs

EUR/GBP Trader:

EUR/GBP Daily Ichimoku Chart: Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Feb 27 - 05:30 AM
  • GBP weighed down by EU-UK trade concerns, with cable dropping to 1.2870

  • Britain on collision course with EU with trade talks mandate nL5N2AR4EH

  • 1.2870 is lowest level since Feb 20: 1.2849 was 12-week low that day

  • EUR/GBP up to 0.8500, five pips shy of Feb 10 high nL2N2AR08C

  • 1.2896 (Wednesday's low) is now a GBP/USD resistance level

  • Recovery rally from 1.2896 topped out four pips shy of 1.2950 nL2N2AR07M

GBPUSD: Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Feb 27 - 04:30 AM
  • EUR/GBP reached 0.8468 after catching a fresh bid from the European open

  • 0.8430-0.8446 was Asia range. 0.8468 is the highest level since Feb 10

  • Month-end demand and euro buy-backs mooted as factors in the rise to 0.8468

  • See: nL2N2AQ07KnL2N2AR06W. EUR above GBP on safe-haven currency ladder

  • German bond yields fall as coronavirus cases rise outside China nL5N2AR2MF

  • 0.8475 (GBP/EUR 1.18) and 0.8505 (Feb 10 high) are EUR/GBP resistance levels

EURGBP: Click here

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Feb 27 - 03:05 AM
  • Short covering has lifted EUR/USD above 21-DMA @ 1.0911

  • Month-end flows are contributing to support nL2N2AR06W

  • Pair close to meeting requirement of minimum tech correction from 1.1240

  • That correction (1.0954) will improve the health of the underlying downtrend

  • Rise orderly and those buying are very likely doing so for a profit

  • Profitable positions are usually re-established

  • Bet the next EUR/USD range is 1.07-1.10 nL2N2AP05R

EUR/USD: Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Feb 27 - 02:05 AM
  • EUR/USD: 1.0820 (1.1BLN), 1.0900 (632M), 1.0915-25 (1.2BLN), 1.0955 (1BLN)

  • USD/CHF: 0.9615 (375M). EUR/NOK: 10.17 (786M)

  • GBP/USD: 1.2880-90 (400M)

  • USD/CAD: 1.3215-20 (440M), 1.3255 (660M), 1.3275 (520M)

  • USD/JPY: 109.65 (450M), 110.25 (330M), 110.50-60 (400M), 110.70-75 (550M)

  • 111.00 (950M). EUR/JPY: 119.80 (705M)

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Feb 26 - 10:15 PM
  • US yields and the USD moved lower in Asia giving EUR/USD support

  • Concerns over report of coronavirus case in US sent S&P futures 1.2% lower nFWN2AR000

  • EUR/USD opened 1.0880 (session low) and traded as high as 1.0915

  • It is around 1.0910 into the afternoon session

  • A close above the 21-day MA (1.0910) targets 38.2 of 1.1240/1.0778 at 1.0954

  • A close below yesterday's 1.0855 low would result in bearish outside day

  • Key will be US yields and Fed expectations as coronavirus news dominates

eur/usd Click here

Refinitiv IFR Research/Market Commentary
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