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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 Richard Pace  —  Apr 15 - 06:35 AM

Changes back to still on line 2

  • Lower spot and risk aversion boosted GBP/USD option premiums last week

  • They remain elevated despite a de-escalation of geopolitical risk

  • GBP/USD still below 1.25 Monday, seemingly limiting further option setbacks

  • Benchmark 1-month expiry implied volatility spiked 6.2 to 7.1 Friday

  • Its 6.8 now and was trading post Brexit lows at 5.4 in mid March

  • 1-month risk reversal premium for GBP puts over calls 0.35 to 0.7 since Fri

  • That's its higjhest downside over upside strike vol premium since July

  • Price shows market wary of more spot weakness that would raise option cost

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Apr 15 - 06:00 AM
  • Mooted offers ahead of 0.65 are helping to keep a lid on AUD/USD

  • There is a large 0.6500 option expiry for the 10am ET NY cut nL2N3GO09R

  • 0.6455 was fractionally fresh one-month low for AUD/USD in early Asian trade

  • AUD/USD slid on pre-weekend flight to USD safety Friday, re: Iranian threat

  • Iran says there was no pre-arranged deal on its response to Israel

  • US March retail sales data due at 1230 GMT; up 0.3% MM f/c vs 0.6% in Feb

Source:
Refinitiv IFR Research/Market Commentary
By Justin Mcqueen  —  Apr 15 - 05:15 AM
  • Unwind of risk off hedges puts pressure back on safe-havens

  • EUR/CHF hold of key pivot is encouraging for bulls

  • Aside from rising geopolitical tensions. CHF gains are likely to be shallow

  • Keep in mind, CHF is the preferred funding currency given dovish SNB outlook

  • As such, bias remains to fade upside in CHF

  • Key support resides at 0.9690. Resistance at 0.9800

  • Looking ahead, ECB Chief Economist Lane speaks at 1300GMT

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Apr 15 - 03:50 AM
  • USD/JPY gains to new 3 year highs above 152.00 failed to ignite intervention

  • USD/JPY since testing 154.00 and brings a key level in to view

  • 155.00 said to hold very big exotic options barriers, more short gamma above

  • Talk among bigger banks that 155.00 is the true BoJ line in the sand

  • Option pricing poised for intervention, big vol premium for downside strikes

  • Another level to watch is 153.00 - a $6-billion option expiry here Thursday

  • If USD/JPY edges lower, related hedging can attract/contain spot to 153.00

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Apr 15 - 02:40 AM
  • CFTC data showed net JPY short rose to 162,151 contracts in week to April 9

  • 162,151 contracts is largest net yen short position since 2007

  • Fourth consecutive week in which net JPY short rose by more than 10%

  • Increase in net yen short preceded USD/JPY break above 152 (on April 10)

  • USD/JPY ascends to new 34-year high near 154 today (April 15) nL2N3GK06N

  • 188,077 contracts was all-time high for net JPY short position in June 2007

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Apr 15 - 02:05 AM
  • EUR/GBP pierced the daily cloud base Friday then struck a 1-month low

  • The pair then turned positive leaving an 0.8529 low in place

  • Daily RSI diverged and a daily bull hammer candle formed

  • concerns for our short: however, price remains below the 100-DMA

  • Monthly RSI is falling and daily momentum negative

  • Those give some comfort for the short

  • The target remains 0.8510 and 0.8605 the stop

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Apr 15 - 02:00 AM
  • Speculators doubled bets on EUR/USD rising between Apr 2-9

  • EUR/USD rallied 1.0725-1.0885 EBS in that period

  • EUR/USD has sunk 1.0885-1.0653 since spurring losses for those long

  • Drop below 1.0596 would target 1.0448 - base ahead Sep-Dec surge

  • Sell-off is currently stretched well below base 20-day BBs at 1.0706

  • Heightened risk aversion stemming Mid-East to further underpin dollar

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Apr 14 - 11:35 PM
  • +0.1% near the top of a 1.2442-1.2463 range with consistent flow on D3

  • US will not take part in action against Iran, E-mini S&P +0.15%, Brent -0.2%

  • Asian stocks off with Friday's Wall Street dip - muted safe-haven interest

  • Weather caused $6 bln UK home, business property insurance payouts in 2023

  • Payouts will result in rising premiums which will fuel inflation

  • Techs; 5, 10 & 21-day moving averages fall, 21-day Bollinger bands expand

  • Daily momentum studies slip - last week's fall left a bearish outside week

  • Close below resilient 1.2500 support targets 1.2368, 0.618% Oct-March rise

  • The 1.2558 high on Friday and Thursday's 1.2578 top are initial resistance

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Apr 14 - 08:30 PM
  • AUD/USD firmed up to 0.6480from low at 0.6455 as E-minis up 0.30%

  • Recovery tentative after steep selloff on Friday on fears Middle east crisis would escalate nL2N3GL2M6

  • AUD/USD sellers are tipped ahead of 0.6500 with resistance at 0.6540/50

  • The 21-day MA is at 0.6441 and the 10-day MA is at 0.6547

  • Risk assets and risk currencies unlikely to fully recover until it is clear all sides in Middle East crisis decide against escalation nL5N3GN0P1nL2N3GN06J

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Apr 14 - 08:10 PM
  • +0.1% after closing down 0.85% amid broad safe-haven led USD strength

  • The situation in the Middle East deteriorated over the weekend

  • UK economy is slowly emerging from the recession - growth remains fragile

  • BOEWATCH prices 22.78 pts for the August meeting - data will be pivotal

  • Techs; 5, 10 & 21-day moving averages fall with 21-day Bollinger bands

  • Daily momentum studies slip - last week's fall left a bearish outside week

  • Close below resilient 1.2500 support targets 1.2368, 0.618% Oct-March rise

  • The 1.2558 high on Friday and Thursday's 1.2578 top are initial resistance

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Apr 14 - 07:05 PM
  • USD/JPY unchanged in Asia, traders mull news of Iran drone strikes on Israel

  • Early drop to 152.93 from New York's 153.27 close attracts bargain hunters

  • USD likely to remain bid on dips as U.S. yields stay elevated

  • Sticky U.S. inflation, higher-for-longer Fed rate expectations support

  • U.S.10-yr Treasury futures down slightly in early Asia, implied yield 4.51%

  • Japan core CPI to slow slightly, but cost-push pressures drag on consumption

  • Stock market reaction to dictate direction in Asia; Fri range 153.39-152.60

  • Asia Monday range 152.93-153.27; watch out for Japan verbal intervention

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Apr 14 - 06:50 PM
  • AUD/USD fell 1.15% Friday after markets were gripped by geopolitical fears nL2N3GL1XA

  • Stocks fell, Treasuries rose while USD & JPY gained & risk currencies fell

  • AUD/USD traded to 0.6455 - just above the Feb 13 trend low at 0.6443

  • Resistance is at 0.6545/55 where the 10 & 21-day MAs converge

  • Friday's price action suggests market positioned for bad news

  • If Middle East crisis doesn't escalate there will be a relief rally

  • Market likely to remain cautions as events unfold

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Apr 12 - 03:58 PM

Repeat with no changes

  • $IDX -0.63% in Apr 3-9 IMM period; net USD G10 long higher on yen, GBP sales

  • EUR$ +0.73%, specs +15,929 contracts add to declining long, now +32.7k net

  • ECB hints at June cut; lwr rate view has seen net long pared recently

  • $JPY +0.15% in period, specs -18,921 contracts, now short 162,151 contracts

  • Yen short at 17-year highs, next weeks data to show effect of rise abv 153

  • GBP$ +0.81% in period, specs -15,162 into strength, now +28,252 contracts

  • GBP bulls abandoning longs as Fed high for longer trumps dovish BoE view

  • AUD$ +1.68% specs +10,344; wrong-footed as pair hit on steady Fed view

  • $CAD +0.05%, specs -2,162 contracts; now short 53,385 contracts, soft after period close

Source:
Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Apr 12 - 03:00 PM
  • USD/JPY's 152 breakout slows, but long-legged daily candles underpin

  • Friday's low breached Thursday's lows

  • But prices then bounced right back up to by flat

  • S-T O/B pressure relieved by the dip to 152.60 from 153.39 high

  • Daily RSIs heavy in the 70s and nearby Bollis and ATR tops cap for now

  • Fibo objectives by 155.20 off major 2023 bases are potential targets

  • Uptrend intact while ranges are above tenkan, S-T MAs by prior c152 peaks

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Apr 12 - 01:50 PM
  • GBP$ soft into week's end, -0.84% to 1.2447; Fri range 1.2558-1.2427

  • No rest for sellers this week, weekly range 1.2709-1.2427

  • Hawkish Fed expectations relative to BoE post-US CPI boosted USD

  • April 17 UK CPI/PPI data in focus for clues at UK inflation, BoE policy path

  • Focus on firm Fed keeps sterling vulnerable nL2N3GL1D4

  • Close below 1.2482, 50% Fib of 1.2070-1.2894 adds to bearish GBP structure

  • Supt at 1.2427 Friday low, 1.2385 61.8% Fib of 1.2070-1.2894, 1.2291 100-WMA

  • Res 1.2488 lower 30-d Bolli, 1.2558 Friday high, 1.2584 200-DMA

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Apr 12 - 01:15 PM

Synopsis:

Bank of America (BofA) notes that the USD/JPY exchange rate has escalated above 152, positioning it within a critical policy intervention zone following strong US CPI data from March. This development triggers a reassessment of potential interventions by Japan's Ministry of Finance (MoF) and potential adjustments in monetary policy by the Bank of Japan (BoJ).

Key Points:

  • Entrance into Intervention Zone: The elevation of USD/JPY to levels above 152 signals its entry into what BofA identifies as a policy intervention zone. This move, driven by heightened US inflation figures, raises the likelihood of intervention by the Japanese MoF to stabilize the currency's value.

  • Scenarios Following MoF Intervention: Should the MoF intervene, USD/JPY could stabilize in the 145-150 range for the near term. However, a delayed rate cut by the Federal Reserve until year-end could push USD/JPY into a 150-155 range by the third quarter of 2024, with potential spikes up to 160 if the Fed abstains from cutting rates.

  • BoJ Monetary Policy Adjustments: A persistent high range for USD/JPY might compel the BoJ to scale back its bond-buying activities, particularly in the 3-5 year and 5-10 year sectors of JGBs. This adjustment would likely lead to underperformance in the 10-year JGB market, impacting Japan's long-term yield curves.

Conclusion:

BofA underscores the significant market and policy implications as USD/JPY enters a decisive intervention zone. The potential responses from the Japanese MoF and adjustments by the BoJ in their bond-buying strategies will be critical to watch, as they aim to stabilize the currency and manage economic impacts. Investors and policymakers should closely follow these developments, given their considerable influence on both currency and bond markets in the upcoming months.

Source:
BofA Global Research
By Rob Howard  —  Apr 12 - 09:55 AM
  • Cable hits 1.2448 after extending south from 1.2709 (Wednesday's high)

  • 1.2448 is lowest level since November 20 (1.2448 was also low that day)

  • Expectation that BoE will cut rates before Fed is weighing on GBP/USD

  • Safe-haven dollar also benefits from flight to safety, re: Iranian threat

  • 1.2500 (former support point) is now a GBP/USD resistance level

  • BoE must fix forecasts and technology, former Fed chief Bernanke says

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Apr 12 - 10:45 AM

Synopsis:

ANZ forecasts a rise in the USD/JPY exchange rate to 155, contrary to a potential decline to 150, based on recent economic indicators and the historical ineffectiveness of interventions. The analysis reflects expectations that interventions will serve merely as opportunities to establish or reinforce long positions in USD/JPY, given the unlikely impact of interventions to sustainably strengthen the Japanese Yen (JPY).

Key Points:

  • Limited Impact of BOJ Interventions: Past interventions by the Bank of Japan (BoJ) have shown only temporary effects on reversing USD/JPY trends. Historical precedents from 2010, 2011, and the early 2000s, alongside 2022 events, indicate that interventions do not fundamentally alter long-term currency trends but provide short-lived trading opportunities.

  • Economic Dynamics Influencing JPY Weakness: Current economic conditions, including a focus on sector-specific inflation pressures such as rising costs in the dining sector, do not indicate a broad-based rise in service prices or wages that could support a stronger JPY. The limited coverage of wage bargaining further diminishes the potential for widespread wage-driven inflation.

  • Prospects for Further JPY Weakening: Despite global financial pressures and internal economic policies, the outlook for JPY does not suggest a return to "historically normal" ranges. Instead, further policy tightening or interventions might lead to additional weakening of the JPY, as observed following the March BoJ meeting.

Conclusion:

ANZ maintains a bullish outlook on USD/JPY, predicting the currency pair will likely hit 155 rather than retracting to 150. This forecast is based on the limited efficacy of interventions in altering long-term currency trends and current economic indicators that do not support a stronger JPY. Investors are advised to view any future interventions as favorable moments to establish or increase long positions in USD/JPY, anticipating further potential gains in this currency pair.

Source:
ANZ Research/Market Commentary
By Christopher Romano  —  Apr 12 - 09:45 AM

EUR/USD erased meager overnight gains and turned lower Friday, with a growing list of bearish influences increasing the probability support near 1.0500 will come into play.

China's March trade balance indicated a sharp reduction in exports and a drop in imports, which fueled concerns that global economic growth, which the euro zone depends on, remains unstable.

The prospect of a worsening economy in the euro zone could lead the ECB to adopt a more dovish monetary policy going forward.

Potentially rising tensions in the middle east have investors seeking out safer assets.

U.S.
import price increases in March
could add to investor views the Fed may delay rate cuts.

Those factors have safe havens such as the dollar, gold and U.S. Treasuries gaining while riskier assets take big hits.

The potential for the ECB to cut ahead of and more than the Fed increased the dollar's yield advantage over the euro.
German-U.S.
2-year spreads US2DE2=RR widened and neared the base of the range they've been in since September.

Should geopolitical tensions flare-up and spreads break the range base, EUR/USD's slide could intensify as investors opt for the safety of the U.S.

EUR/USD shorts could then have the confidence to push the pair towards 1.0450/1.0500.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Apr 12 - 10:00 AM

Synopsis:

Following the uneventful April ECB meeting, Credit Agricole anticipates an early and more aggressive rate-cutting cycle by the ECB compared to the Fed, signaling a significant shift in EUR/USD dynamics. Despite the ECB's steady stance at the meeting, where ECB President Christine Lagarde reiterated previous messages, the broader context of global economic conditions and recent U.S. inflation data may pave the way for diverging monetary policies.

Key Points:

  • ECB Steadiness Amid U.S. Inflation Surge: The ECB's consistent message in April, despite surging U.S. inflation figures in March, suggests a cautious but separate policy path from the Fed. This steadfast approach, amidst a volatile global financial landscape, highlights the ECB's commitment to independent decision-making.

  • Implications of Fed's Policy on ECB Decisions: While the ECB maintains its independence, the less dovish stance from the Fed and its impact on global financial conditions could indirectly influence the Eurozone's economic outlook, particularly in relation to the EUR/USD exchange rate.

  • Anticipated ECB Rate Cuts: Despite historical trends where the ECB has not led the Fed in easing monetary policy, Credit Agricole now expects the ECB to initiate earlier and more substantial rate cuts. This anticipated policy shift is seen as a major factor that could negatively impact the EUR/USD throughout the year.

Conclusion:

Credit Agricole's analysis post-ECB April meeting suggests a notable shift in the ECB's forthcoming monetary policy, with expected rate cuts that could precede and exceed those of the Fed. This divergence is poised to influence the EUR/USD exchange negatively, marking a critical development in Eurozone financial strategies.

Source:
Crédit Agricole Research/Market Commentary
By eFXdata  —  Apr 12 - 09:33 AM

Synopsis:

Bank of America has revised its expectations for the Federal Reserve's monetary policy, now forecasting only one rate cut in December 2024. The bank's assessment points to more persistent inflationary pressures than previously anticipated, prompting a delay in the expected easing of monetary policy.

Key Points:

  • Delayed Rate Cuts: Initially anticipating multiple rate cuts this year, BofA has adjusted its outlook to just one in December, citing recent inflation trends that do not support earlier cuts.
  • Inflation Trends: The first quarter of 2024 witnessed an annualized core CPI inflation rise to 4.5%, a significant increase from 3.3% at the end of 2023. This trend suggests that inflation pressures are more entrenched than expected, diminishing the likelihood of rate cuts in the near term unless there is a marked deterioration in the labor market.
  • Higher Terminal Rate: Reflecting on stronger economic indicators, BofA now anticipates a higher terminal rate for the Fed funds, adjusting its 2026 forecast up by 50 basis points to a range of 3.5-3.75%. This adjustment accounts for potential growth impacts from an expanding labor force, persistent inflation, and fiscal deficits.

Conclusion:

Bank of America's updated forecast underscores a cautious stance towards the Federal Reserve's path forward, with a single rate cut projected for December 2024. This outlook reflects growing concerns over sustained inflationary pressures that may require a more restrictive monetary policy than previously anticipated. As such, financial markets may need to adjust expectations for a less accommodative Fed in the near to medium term.

Source:
BofA Global Research
By Christopher Romano  —  Apr 12 - 07:15 AM
  • AUD/USD hit 0.6543, barely pierced the 200-DMA then the pair fell sharply

  • Downside surprise to China March trade fueled econ growth worries, hit risk

  • USD/CNH hit 7.2680 (D3), stocks ESv1 gave back much of Thursday's gains

  • US$ gains on safe-have bid, US yields US10YT=RR fell on the safety bid

  • AUD/USD fell despite commodities DCIOc2HGv1XAU= making solid gains

  • AUD/USD traded 0.6490 in early NY, traded down -0.70% early in the session

  • Techs are bearish; RSIs fall, pair below daily cloud, 10-,21-,55-,200-DMAs

  • Consecutive monthly gravestone doji candles reinforce bearish signals

  • US March exp/imp prices, April U of Michigan survey are data risks in NY

  • Remarks from Fed's Schmid, Bostic, Daly may impact risk during NY hours

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Justin Mcqueen  —  Apr 12 - 05:50 AM
  • Cable now trading at lowest level since Nov 2023 after 1.25 break

  • Given build up of positions between 1.26-1.28, GBP longs are offside

  • Position cleansing of longs can fuel deeper setback

  • Little in the way of support until 1.2430-50

  • Resistance at 200-DMA (1.2584) as break below holds - retest capped

  • Watch daily close. Below 1.25 would add to downside momentum

  • Next week is key for GBP - UK CPI, jobs and retail sales data due

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Apr 12 - 04:55 AM

Speculators who bought almost 20 billion euros when they were gambling on the currency's rise in December had unwound almost the entire position before this week's meeting of the European Central Bank - and that really matters.

Traders bought low and sold high - they made money - and since selling out of these positions, the euro has fallen further reaching a fresh 2024 low at 1.0674 EBS in the wake of the central bank meeting.

A lot is being made of the unlikely possibility of a great divergence between U.S. and eurozone monetary policy which could drive EUR/USD toward parity.
While not impossible this is highly unlikely, and speculators who have traded very well likely know this.

Instead of selling low and try to profit from a rather unlikely outcome, traders who profited from betting on a rise might buy lower, and return to the positions that have rewarded them.

This is the more logical trade and it is in keeping with an uptrend that has endured since September 2022 - and specs know the trend is their friend.
This trend has been refreshed by a fairly modest correction, and without big bets to restrain it, EUR/USD may rise again.

Flight to safety may change the face of FX markets.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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