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EUR / USD
GBP / USD
USD / JPY
USD / CAD
AUD / USD
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USD / CHF
AUD / JPY
AUD / NZD
EUR / CHF
EUR / GBP
EUR / JPY
GBP / JPY
By Ewen Chew  —  Mar 18 - 09:45 PM
  • USD/KRW rallies to 1338.4, enters bullish path; Kospi -1.4%

  • Tues close above 1336.7 confirms Bollinger uptrend channel

  • From there, 2024 peak of 1346.7 will be within reach

  • USD/JPY pulls USD/AXJ up before BOJ decision nL2N3FT0GG

  • UST yields firmed up o/n as FOMC meeting looms nL2N3FS29Q

  • Market has toned down Fed rate cut expectations recently

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 18 - 07:00 PM
  • EUR/USD closed -0.16% as US yields moved up to multi-week highs nL2N3FW2G8

  • Key events start today with RBA & BOJ decisions - followed by Fed Wednesday

  • Market reaction to BOJ will likely impact EUR/JPY and EUR/USD as well

  • EUR/USD range traded between the 10 & 21-day MAs on Monday

  • The 10-day MA is at 1.0910 and 21-day MA is at 1.0869

  • More support @ 1.0835/40 where 200-day MA converges with 50% of Feb-Mar rise

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 18 - 06:25 PM
  • AUD/USD closed unchanged Monday as rising iron ore offset rising US yields nL2N3FW0GPnL2N3FW2G8

  • AUD/USD sticky around 0.6555/60 where 21-day and 200-day MAs converge

  • A clear break below 0.6550 targets trend-line support at 0.6500

  • Resistance is at the 10-day MA at 0.6591 where sellers are eyed

  • AUD/USD likely to consolidate ahead of RBA decision later today

  • RBA to remain on hold with tone of statement likely to see AUD/USD react nL3N3FW01W

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 18 - 03:00 PM

Synopsis: Morgan Stanley notes a unique USD/JPY market response to reports indicating the Bank of Japan's (BoJ) likely exit from negative interest rate policy (NIRP) at its March meeting. Initially, the yen strengthened across the board following the media report, but this momentum was short-lived, with the yen quickly reverting to broad weakness. This price action is interpreted as a "buy the fact" scenario for USD/JPY, suggesting that the market has largely priced in the anticipated BoJ rate hike.

Key Points:

  • Initial JPY Strength: Following a media report about the BoJ's possible NIRP exit, the yen initially strengthened.
  • Quick Reversal to JPY Weakness: The initial yen strength was swiftly reversed, leading to widespread weakening against other currencies.
  • Market Sentiment: The USD/JPY's price action indicates a "buy the fact" approach, with a consensus view that a BoJ rate hike in March is almost certain.

Conclusion:

The market's reaction to the anticipated BoJ policy shift highlights a consensus expectation of a rate hike, with USD/JPY movements reflecting a "buy the fact" sentiment. This suggests that traders may be looking beyond the BoJ's decision, considering it almost a foregone conclusion. Morgan Stanley's analysis points to a nuanced understanding of market dynamics and expectations leading up to crucial central bank decisions.

Source:
Morgan Stanley Research/Market Commentary
By Randolph Donney  —  Mar 18 - 03:35 PM
  • USD/JPY's retracement of March's slide now by 21-, 30-DMAs at 149.40/44

  • A daily range above them could see 2024's 150.88 high retested

  • That and the 161.8% Fibo off March's base at 151

  • Monday's range was bullishly above the kijun and 13-DMA at 148.68/78

  • Previously O/S RSIs are now at neutral levels

  • That may slow the pace of the recovery

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Mar 18 - 01:45 PM
  • NY opened near the session's 0.6574 then steadily fell & turned negative

  • US yield US2YT=RR gains helped underpin the US$; USD/CNH rallied to 7.2085

  • AUD/USD slid below 21- & 200-DMAs despite equity ESv1 & gold XAU= gains

  • 0.65535 traded in NY's afternoon, pair was down -0.10% late in the day

  • Daily inverted hammer candle, falling daily RSI are concerns for longs

  • RBA and BOJ meetings are risks which may impact overall risk sentiment

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 18 - 01:30 PM

Synopsis:

BNP Paribas revises its EUR/USD forecast, expecting a slower pace of appreciation through the end of 2024 and projecting the currency pair to reach 1.10 by year-end. The bank now anticipates the majority of the appreciation to unfold in 2025, adjusting the end-of-year forecast for 2025 to 1.14, down from the previously projected 1.15 for 2024 and 1.18 for 2025. This moderation reflects a balanced view of flow dynamics favoring the EUR, against a backdrop of strong US growth, anticipated ECB rate cuts exceeding those of the Fed, and the EUR's attractiveness as a funding currency in the current carry-trade environment.

Key Points:

  • Flow Dynamics Support EUR: The Eurozone's Broad Basic Balance of Payments remains robust due to a current account surplus not being fully recycled abroad, potentially supporting the EUR in the near term.
  • Moderated Appreciation: Factors such as stronger US economic performance, greater ECB rate cuts compared to the Fed, and the EUR's role in carry trades contribute to a more gradual appreciation pace for EUR/USD than previously expected.
  • Revised Forecasts: BNP Paribas adjusts its forecasts to 1.10 by the end of 2024 and 1.14 by the end of 2025, reflecting a shift in the expected timing and magnitude of EUR/USD appreciation.

Conclusion:

While supportive flow dynamics may lend some strength to the EUR, a combination of stronger US economic indicators, a more aggressive easing stance from the ECB compared to the Fed, and the current preference for carry trades suggest a moderated pace of EUR/USD appreciation. BNP Paribas' updated forecasts anticipate a slower climb for the currency pair, with significant appreciation now expected in 2025 rather than the immediate term.

Source:
BNP Paribas Research/Market Commentary
By Christopher Romano  —  Mar 18 - 12:30 PM
  • EUR/USD rallied above Friday's high, neared the 10-DMA, then fell sharply

  • The pair turned negative on the session and fell back to opening levels

  • EUR/USD traded down -0.14% after Europe's close & tech signals grew bearish

  • A daily gravestone doji candle formed and daily RSI turned downward

  • 1.0865/70 threatened; 21- & 55-DMAs, series of daily highs/lows in that zone

  • 200-DMA, daily cloud base, daily lows in 1.0835/40 zone targeted thereafter

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 18 - 10:45 AM

Synopsis:

As the Federal Reserve prepares for its March FOMC meeting, Goldman Sachs forecasts that the committee is likely to maintain its cautious stance, with expectations for a rate cut postponed to June. This projection comes despite numerous changes since the last meeting, none of which seem to hasten the Fed's decision-making. The outlook for a gradual easing cycle is reinforced by recent developments aligning more closely with the Fed's December projections on disinflation progress. Given that other central banks are also adopting a cautious approach, significant currency movements are anticipated to be limited. The focus remains on carry and cyclical factors, leaving the Dollar in a unique position outside these primary influences.

Key Points:

  • Postponed Rate Cuts: Goldman Sachs predicts the Federal Reserve will initiate rate cuts in June, with a slower cycle likely due to recent economic data and inflation trends aligning with the FOMC's less optimistic projections.
  • Global Central Bank Caution: The cautious stance is not unique to the Fed; other central banks globally are also taking a deliberate approach to policy adjustments, impacting currency volatility.
  • Dollar's Unique Position: Given the current global economic landscape, the USD does not fit neatly into either carry or cyclical categories, suggesting that its movements will be influenced by a broader range of factors beyond immediate central bank policies.

Conclusion:

The upcoming FOMC meeting is expected to reflect a continued cautious approach from the Federal Reserve, aligning with global central bank trends. This outlook suggests that significant USD movements might be more influenced by carry and cyclical factors rather than direct policy changes in the near term. Goldman Sachs' analysis indicates that while rate cuts are on the horizon, the path to easing will be gradual, mirroring the careful strategies of central banks worldwide.

Source:
Goldman Sachs Research/Market Commentary
By Paul Spirgel  —  Mar 18 - 10:05 AM

GBP/USD held in NorAm near its overnight 2-week low of 1.2725, as a slew of central bank meetings loomed this week, with traders wary of downside risks to sterling from both the Fed and BoE.

While the U.S. and UK central banks are expected to leave rates unchanged, market participants are keen for signals from both about the start and depth of expected cuts, which will hold significant sway on the path of GBP/USD.

Early 2024 GBP strength came on the heels of dovish Fed rate expectations of as much as 160+bp in rate cuts in 2024.
That has been significantly dialed back, with LSEG's IRPR now pricing -73bp this year.

The recent GBP/USD yaw on the back of dovish testimony by Fed Chair Jerome Powell and then hawkish U.S. CPI and PPI intensified the spotlight on the two central banks.

For GBP/USD traders, risks are symmetrical as there has been growing speculation of a possible guidance shift lower by the Fed to two Fed cuts in 2024, and should UK CPI on March 20 hint at falling UK inflation, the BoE may see votes to cut grow, weighing on sterling.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 18 - 09:30 AM

Synopsis:

Credit Agricole anticipates a scenario where investors might find favorable conditions to resume selling the Swiss Franc (CHF) following the upcoming Swiss National Bank (SNB) meeting on Thursday. The bank is expected to maintain its current policy stance, providing a potential knee-jerk rally in the CHF as an opportunity for selling. The decision to hold is based on several factors including cooling CPI within target levels, relatively moderate Swiss interest rates compared to other G10 central banks, and recent CHF depreciation which indirectly eases monetary conditions.

Key Points:

  • SNB's Expected Hold: Predictions suggest the SNB will not adjust its policy, attributing to controlled inflation and the absence of restrictive interest rates.
  • CHF Depreciation: The recent weakening of the CHF has played a role in easing monetary conditions, a development the SNB might want to sustain or amplify by hinting at potential FX interventions to counteract excessive CHF strength.
  • Lack of Forward Guidance: The meeting is unlikely to offer explicit forward guidance, instead potentially highlighting inflation forecasts and the central bank's readiness to act against undue CHF strength.

Conclusion:

The SNB meeting could present an opportune moment for CHF sellers, especially if the bank's decision to maintain its current policy prompts a temporary CHF rally. Credit Agricole suggests that the SNB's stance, coupled with its strategic silence on forward guidance and emphasis on monitoring CHF levels, could reinforce conditions favorable for selling the CHF in the aftermath of the meeting. This approach aligns with broader expectations of the SNB's efforts to manage the currency's strength without resorting to immediate policy tightening.

Source:
Crédit Agricole Research/Market Commentary
By eFXdata  —  Mar 18 - 08:55 AM

Synopsis:

BofA forecasts that the upcoming March FOMC meeting will present an updated outlook showcasing stronger economic growth and persistent inflation, while unemployment rates stay near historic lows. Despite these adjustments, the expectation is for the Fed to hint at a rate-cutting cycle commencing in June, albeit with a notable risk of deferral. Discussions are also anticipated regarding the Fed's balance sheet strategies, focusing on the timing and extent of tapering Treasury run-off caps.

Key Points:

  • Fed's Stance on Hold: The Federal Reserve is expected to maintain its current policy stance, with the statement likely seeing minimal changes from January's extensive revisions.
  • Growth and Employment: The Fed may continue to describe economic growth as "solid" and unemployment as "low," albeit recognizing a recent uptick in job creation pace.
  • Inflation Outlook: Powell might express a slightly diminished confidence in the inflation outlook compared to January, attributing this to recent CPI reports. However, a broader disinflationary trend is still believed to be in play.
  • Rate Cuts on the Horizon: Despite the potential for less certainty around a June rate cut, the Fed is anticipated to signal its readiness to adjust policy as necessary, with the focus being on eventual rate reductions.

Conclusion:

The March FOMC meeting is poised to reflect an environment of stronger economic indicators alongside enduring inflation pressures, without immediate policy changes. The Fed is likely to continue preparing markets for a potential rate-cutting cycle starting in June, emphasizing a cautious but proactive approach to achieving its inflation targets. This delicate balance underscores the Fed's commitment to navigating inflation uncertainties while supporting sustained economic growth.

Source:
BofA Global Research
By Justin Mcqueen  —  Mar 18 - 06:35 AM
  • CFTC data shows another sizeable increase in net GBP longs

  • However, this leaves GBP further exposed to softer UK data going forward

  • 10yr z-score = 2.4. Above 2 typically marks a peak in the currency

  • In turn, risks to sterling lean asymmetrically to the downside

  • While GBP upside becomes even harder to come by

  • A UK CPI miss vs f/c will have a larger impact than a beat nL2N3FT120

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Mar 18 - 06:05 AM
  • USD/JPY bias remains on the upside ahead of this week's Fed, BOJ meetings

  • Big rate differential between Fed, BOJ helps underpins USD/JPY nL2N3FQ0MA

  • Despite hawkish speculation, BOJ could remain easy nL2N3FW06I

  • USD/JPY chart points to gains to retest the 2024 150.88 high nL2N3FW0HA

  • Spot has seen a 148.90-149.33 range, according to EBS data

  • USD/JPY and EUR/JPY pairs currently have a strong positive correlation

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Mar 18 - 04:40 AM
  • Failure earlier in March under the 146.83 Fibo has led to a strong recovery

  • 146.83 Fibo is a 38.2% retrace 140.27 to 150.88 (Dec to Feb) EBS rise

  • Spot broke and closed on Friday above the kijun line, that is at 148.68

  • Scope grows for bigger gains to the 2024 105.88 high

  • A daily close back under the kijun line will defer

  • EUR/JPY has seen a 162.18-162.64 range, on Monday, EBS data shows

  • USD/JPY Trader TGM2336. Previous update nL2N3FT0NN

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Mar 18 - 04:10 AM
  • Traders added $3 billion to net long position - now $10bln - since mid-Feb

  • EUR/USD rallied 1.0695-1.0980 Feb 14 and March 8 - falls to 1.0872 Mar 18

  • Drop occurred after rally became stretched above peak 20-day Bollinger bands

  • Low is close to 1.0871 target for minor (38.2%) correction of Feb-Mar gains

  • 20-DMA at 1.0871 recently crossed above 55-DMA 1.0859 - bullish

  • Rate differentials already weighing EUR/USD expected to grow in favour USD

  • ECB depo seen falling 85 bps vs 75bps for U.S. int rate

  • Drop in volatility may see EUR/USD trapped for longer

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Mar 18 - 03:25 AM
  • EUR/USD recently failed above the daily cloud, that spans 1.0835-1.0931

  • That is a "bull trap" as the mkt broke above a tech level but then reversed

  • Long black candle on last Thursday's candle is another bearish sign

  • A break and close under cloud would confirm a m-term shift to the downside

  • EUR/USD Trader TGM2334. We remain long at 1.0935. Previous nL2N3FT0LD

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Mar 18 - 03:00 AM
  • Sterling's retracement of the 1.2518-1.2893 climb continues

  • The 50% Fibo of that move is at 1.2706

  • A new pullback low of 1.2725 early Monday but price sticky around 1.2735

  • Daily momentum hovering just above the zero line and RSI falling

  • We are maintaining a 1.2773 short for 1.2650 with a 1.2835 stop

  • Drop under 1.2706 sees stop lowered to entry

  • Topside and 10 DMA key, today at 1.2770

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 17 - 11:20 PM
  • AUD/USD opened 0.6560 after falling 0.32% on Friday =V

  • In a quiet Asian session it edged up to 0.6570 with better China data nP8N3FE039

  • Heading into the afternoon it is trading around 0.6565/70

  • Support is at 0.6555/60 where the 21 & 21-day MAs converge

  • A break below 0.6550 targets trend-line support at 0.6498

  • Resistance is at the 10-day MA at the 10-day MA at 0.6586

  • RBA decision tomorrow to focus on statement and forward guidance nL3N3FW01W

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 17 - 11:10 PM
  • EUR/USD had a quiet start after closing slightly higher Friday at 1.0887

  • Heading into the afternoon it is trading around 1.0890

  • Resistance is at the 10-day MA at 1.0910 where sellers are tipped

  • Support is at 21-day MA at 1.0866 with bids eyed around 1.0870

  • More support @ 1.0835/40 where 50% of Feb-March rise & 200-day MA converge

  • Consolidation may continue ahead of key events including Fed decision nL3N3FL0KR

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 17 - 10:10 PM
  • China retail sales and IP better than expected nP8N3FE039

  • AUD/USD better bid after China data and at session high at 0.6567

  • Resistance is at the 10-day MA at 0.6586 and break would relieve pressure

  • The 21-day and 200-day MAs at 0.6555/60 and proving sticky

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 17 - 06:30 PM
  • EUR/USD closed a touch higher on Friday despite another rise in US yields nL2N3FT3F3

  • EUR/USD fell just 0.48% last week despite 2-yr US yield rising 24 bps

  • EUR/USD support is at the 21-day MA at 1.0866

  • More support @ 1.0835/40 where 200-day MA & 50% of Feb-March rise converge

  • Resistance is at the 10-day MA at 1.0910 where sellers are tipped

  • Consolidation may continue ahead of Fed decision on Wednesday

  • Market has priced in a hawkish Fed - so risk is for USD to ease if Fed leans dovish

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 17 - 05:55 PM
  • AUD/USD fell 0.32% on Friday and for the week fell 1.0%

  • Steep rise in US yields/hawkish turn in Fed expectations weighed on AUD/USD

  • The AUD/USD testing support at 0.6555/60 where the 21 & 200-day MAs converge

  • A clear break below 0.6550 targets trend-line support at 0.6497

  • Resistance is at 10-day MA at 0.6585 and break would ease downward pressure

  • A veery busy calendar this week should determine next AUD/USD trend

  • China retail sales and IP key events today as China concerns a drag on AUD

  • On Tuesday the RBA decides nL3N3FQ1FZ- followed by the Fed decision

  • Wednesday

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Mar 17 - 05:45 PM
  • USD/JPY well supported in early Asia after closing 0.45% higher Friday

  • Boosted by higher short-term U.S. yields; 2-yr yield up 24 bps last week

  • Sticky U.S. inflation raises doubts on timing and magnitude of Fed rate cuts

  • Focus turns to central bank rate decisions this week; BOJ Tuesday, Fed Wed

  • Japan union group announces biggest pay hikes in 33 yrs, presaging BOJ shift

  • BOJ to end negative rate policy on Tuesday, says Nikkei

  • Resistance 149.20-30, 149.90-150.00, support 148.40-50, 148.00-10

  • Friday global range 148.03-149.17

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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