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Oct 16 - 09:48 PM
GBP/USD - Neutral Setup Suggests Room For A Move On News
First appeared on eFXplus on Oct 16 - 07:55 PM
  • Flat - closed +0.2%, as endgame approaches on a Brexit deal nL8N1WW6C1
  • A Brexit backstop deal may not be passed by the UK parliament nL3N1WW4XZ
  • EU expects May to break the Brexit deadlock tonight - unlikely nL8N1WW5PT
  • Major breakthrough will be needed to avoid hard Brexit, currently 25% chance
  • Momentum studies, 5, 10 & 21 DMAs show little bias - neutral setup
  • NY 1.3172/1.3235 range initial support/resistance - Asia likely cautious

gbp oct 17 Click here

Thomson Reuters IFR Markets
Oct 16 - 08:36 PM
EUR/USD - Plenty Of Balls In The Air - Quiet Before The Storm
First appeared on eFXplus on Oct 16 - 07:05 PM
  • Flat after closing a shade softer - stalled amid Italy & Brexit uncertainty
  • Upbeat market response to Italy nL8N1WW1CU, Macron manoeuvres nL8N1WW1SA
  • 1.1500 713M, 1.1520-25 550M strikes support - 1.1575 750M a magnet if quiet
  • Momentum studies flat line, 5, 10 & 21 DMAs conflict - neutral setup
  • Close above 1.1605/24, 21 DMA & 50% Sep/Oct fall would be positive
  • 1.1566 London low and 1.1622 NY high initial support resistance

eur oct 17 Click here

Thomson Reuters IFR Markets
Oct 16 - 05:00 PM
USD/JPY: Preparing For Next Rally: Confirm On Daily Close Above 113.15; Negate Below 111.75 - ING
First appeared on eFXplus on Oct 16 - 03:30 PM

ING discusses USD/JPY technical outlook and adopts a bullish bias on a multi-days basis against a daily close back below 111.75.

"The daily chart shows a successful test of the solid and crucial support area between the horizontal line around 111.95, the MA-50 line at 111.88 and the long-term underlying trend line around 111.75. This suggests we should be prepared for the next rally, confirmed by a close above yesterdays high at 112.24.

A close above the horizontal resistance area 113.15 is required to expect a test of the overhead horizontal resistance area 114.45-115.50.

Each close below the underlying trend line around 111.75 will violate our short-term bullish set-up," ING argues. 

ING Research/Market Commentary
Oct 16 - 03:48 PM
USD/JPY - Has First Bullish Day Since Oct Top As Risk Rebounds
First appeared on eFXplus on Oct 16 - 02:15 PM
  • USD/JPY builds off 111.60 key props, clears down TL from 114.55
  • Also above hourly Cloud & 100-HMA for first time since Oct 4
  • Cross-asset rerisking undermines recent JPY haven bid, lifts crosses
  • US data firm, but not enough to spark Tsy yld surge, risk-off response
  • Solid US earnings also helping USD recovery - good news is good again
  • Close above 112.13 TL off Oct 4 high eyes Fri's 112.50 high, 50% Fibo
  • Converging tenkan, kijun and 21-DMA near 113 key resistance
  • Biggest option expiries at rising levels as week goes on, supportive
  • Big spec USD/JPY longs hoping risk rebound will bail them out

Chart: Click here

Chart: Click here

Chart: Click here

Thomson Reuters IFR Markets
Oct 16 - 02:36 PM
AUD/USD - COMMENT-AUD/USD Squeeze May Prompt New Round Of Buying
First appeared on eFXplus on Oct 16 - 12:35 PM

AUD/USD gains are squeezing shorts, who will face growing pressure if the rally crosses key 0.7150/60 resistance. Broad based U.S. dollar sales and rallies in the EM complex have helped lift AUD/USD to a new October high, and further USD/CNH weakness is also helping the aussie.
Positioning is playing a key role, with net-long U.S. dollar and net-short aussie positions at extremes.
Since the market has most likely priced in expected Fed rate hikes, U.S. dollar bulls have no new rationale for fresh gains.
Long unwinds are likely taking hold and will likely accelerate if the greenback fails to move higher soon.
AUD/USD's price action has bolstered the squeeze view.
Daily RSI is biased up with no divergence, AUD/USD is holding above the 10-DMA and a long lower wick is in place on the October monthly candle.
If 0.7150/60 breaks, the down trend line off 2018's high as well as September's peak are in play.
A break above there would open the door to July's high and the descending 200-DMA, which currently sits at 0.7543.

chart: Click here

Thomson Reuters IFR Markets
Oct 16 - 01:24 PM
EUR/USD: Firm Fundamentals To Trump Political Uncertainty; Staying Long - Credit Agricole
First appeared on eFXplus on Oct 16 - 11:20 AM

Credit Agricole CIB Research discusses EUR/USD outlook and argues that firm fundamentals rather than political uncertainty should prove the single currency’s predominant driver. CACIB expresses this constructive EUR view via staying long EUR/USD targeting a move towards 1.1950.

"The EUR has been broadly stable, regardless of continuing uncertainty regarding Italian politics. While position-squaring on the back of weaker global risk-sentiment has seemingly benefited the EUR, we expect its attractiveness as a funding currency to continue falling given the expected drop in its rate advantage," CACIB notes. 

"As such, we expect the ECB to start normalising monetary policy without undue delay. Headline risk with respect to Italy should stay high, but contagion is proving limited and hence the solid Eurozone fundamentals should direct the ECB’s stance. Note too that speculative short positioning seemingly remains elevated, suggesting that many negatives in terms of politics are in the price. We remain long EUR/USD as a trade recommendation," CACIB adds. 

Crédit Agricole Research/Market Commentary
Oct 16 - 12:12 PM
USD/JPY - COMMENT-Stocks Bounce Revives USD/JPY Fortunes, Eyes On 112.50
First appeared on eFXplus on Oct 16 - 10:25 AM

The global equities rebound has bolstered USD/JPY after it based by key 111.60 supports yesterday, but the pair needs help from stocks and Treasuries for lasting relief. Since rising Treasury yields pummeled stocks recently -- lifting the yen through de-risking -- a reversal of that relationship is a precursor to sustained USD/JPY gains. It's too soon to tell whether the rebound in emerging markets, most stock markets, the VIX's retreat and USD/JPY's bounce are just corrections of recent derisking, but an hourly close above USD/JPY's October downtrend line and 100-HMA, last at 112.14, would put in play Friday's 112.50 high and 50 percent of the Oct 9-15 drop. Helping the rebound, USD/JPY'S Monday low completed a 61.8 percent retracement of the August-October rise and held the uptrend line off August's low at 111.60. USD/CNY stability may allow USD/JPY to drift up between rising option expiries in the 111.65-4.00 range this week.
The burden of proof is on bulls to show this is something more than a reversion toward the 21-DMA and converging tenkan and kijun near 113.

Chart: Click here

Chart: Click here

Chart: Click here

Thomson Reuters IFR Markets
Oct 16 - 11:00 AM
EUR/GBP: Quiet In The Eye Of The Storm; What's Next? - MUFG
First appeared on eFXplus on Oct 16 - 09:09 AM

MUFG Research discusses EUR/GBP outlook and warns of an abrupt end to the cross's recent stability over the coming months.

"EUR/GBP traded within a narrow band yesterday between 0.8800 and 0.8825. This belies the current risks facing both currencies. The Italian coalition government submitted its controversial budget proposal last night, to which the EC will make an initial assessment within a week. The risk of confrontation between Italy and the EU poses downside risks for the euro.

The more immediate event risk is posed by tomorrow’s EU Leaders’ Summit at which when PM May will brief the EU on the state of Brexit negotiations. If it becomes clear at this meeting that no significant progress has been made, this will elevate the risk of a no-deal Brexit which could increase downside risks for the pound. Market participants are currently weighing up these two offsetting risks which are contributing towards the relatively stable EUR/GBP rate," MUFG notes. 

"However, it is clear that the current stability could be brought to an abrupt end in the coming months. Indeed, the current period of low volatility could be creating a false sense of security," MUFG argues. 

BTMU Research/Market Commentary
Oct 16 - 09:48 AM
First appeared on eFXplus on Oct 16 - 12:29 AM

EUR/USD: Neutral (since 21 Aug 18, 1.1485): Clear break above 1.1620 would shift focus to 1.1700.

EUR touched a high of 1.1606 yesterday, holding just a few pips below last Friday’s 1.1610 peak before easing off to close slightly higher (NY close of 1.1577, +0.12%). The price action is not surprising as we noted yesterday (15 Oct, spot at 1.1555), “neutral short-term indicators could lead to a couple of days of consolidation”. As highlighted, there is still chance that EUR could break above 1.1620 and this would suggest scope for further EUR strength towards 1.1700. Only a break of 1.1520 (‘key support’ previously at 1.1500) would indicate that the current upward pressure has eased

GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): GBP is expected to trade sideways.

GBP rebounded strongly from the 1.3080 low seen during early Sydney hours yesterday. Despite the recovery, we continue to view last Friday’s 1.3259 high as a short-term top. However, the overall outlook is still deemed as neutral but we expect GBP to trade sideways to slightly lower in the coming days, likely within a 1.3040/1.3220 range (narrower than the 1.3000/1.3220 range expected yesterday).

AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD likely to trade within a broad range. No change in view.

AUD traded in a relatively narrow range last Friday and ended the day largely unchanged (NY close of 0.7117, -0.09%). The price action reinforces our view wherein we expect AUD to trade sideways in the coming days, likely within a 0.7040/0.7200 range. Looking ahead, the current price action seems to suggest that AUD is attempting to base out but this process could take up to a few weeks.

NZD/USD: Neutral (since 20 Aug 18, 0.6625): A sustained rebound only if above 0.6630.

While we expect NZD to trade sideways, we highlighted last Friday (12 Oct, spot at 0.6525), “the prospect for a break above 0.6560 has increased but the next resistance at 0.6600 is likely strong enough to thwart any further advance in NZD (at least for another one week or so)”. NZD hit a high of 0.6557 during NY hours yesterday before blasting above 0.6560 after the release of the stronger than expected NZ inflation data earlier this morning. The high at the time of writing is 0.6598 and in view of the vastly improved momentum, a break above 0.6600 would not be surprising. That said, we have doubts about the sustainability of the current NZD strength and in our view, only a clear break of 0.6630 would indicate that NZD is ready for a stronger recovery towards the September’s peak near 0.6700. All in, NZD is expected to stay underpinned from here as long as the ‘key support’ at 0.6500 is intact.

USD/JPY: Neutral (since 09 Oct 18, 113.10): Prospect for a break of 111.50 has increased.

We have held the same since last Thursday (11 Oct, spot at 112.15) wherein the current weakness in USD is viewed as a correction that has scope to extend to 111.50. We indicated, “a sustained decline below this level seems unlikely”. While the price action since then is in line with our expectation (USD dipped to a low 111.61 yesterday), the prospect for a break of 111.50 has increased. A clear break of this level would suggest a deeper pull-back towards 111.00. All in, USD is expected to stay under pressure until it can reclaim the current ‘key resistance’ at 112.70 (level previously at 113.00).

UOB Research/Market Commentary
Oct 16 - 08:36 AM
AUD/USD - Within Strike Of Expiry After Weaker CNY Impacts
First appeared on eFXplus on Oct 16 - 06:20 AM
  • AUD/USD fall from 0.7150 extended to 0.7112 during the European am
  • 0.7150 = Asia high/peak since Oct 3 (0.7149 was Monday's high)
  • Drop from 0.7150 influenced by weaker CNY
  • AUD can attract proxy flow re: CNY/China sentiment
  • AUD/USD bids expected near 0.7100 (0.7099 was Monday's low)
  • There is a large 0.7125 option expiry Wednesday, A$968mn strike

AUDUSD expiry: Click here

Thomson Reuters IFR Markets
Oct 16 - 07:24 AM
EUR/USD - COMMENT-EUR/USD Shorts Vulnerable Despite Italy/Germany Worries
First appeared on eFXplus on Oct 16 - 04:15 AM

The EUR/USD upside has been limited despite the September U.S. retail sales miss nLNSFLEEM8, as lingering concerns over Italy and the CDU/CSU election losses in Bavaria nL8N1WU02P weigh on spot.
Despite the latest euro holdup, the next big move in the EUR/USD will is likely to be up.
EUR/USD's build-up of short positions since early October remain stubbornly intact , according to EBS flow data, despite the month's strong recovery from 1.1433 to 1.1611.
That means some of the buy stops associated with the outstanding shorts remain vulnerable.
EUR/USD continues to consolidate after October's recovery, as the market gears up for the next leg higher through the 1.1624 Fibo, a 50 percent retrace of the 1.1815 to 1.1433 fall.
Daily cloud, which now spans the 1.1546-1.1569 region, continues prop up the market.
Friday and Monday 1.1535 matching lows provide another line of support for bulls.
Traders now eye September U.S. industrial production for clues on the next dollar move.
Related comment .

EBS Flow Chart: Click here

Daily Cloud Chart: Click here

Thomson Reuters IFR Markets
Oct 16 - 06:12 AM
GBP/USD - Up To Threaten 1.32 Before UK Earnings Data
First appeared on eFXplus on Oct 16 - 03:50 AM
  • GBP on the front-foot before UK earnings/jobs data, with cable up to 1.3197
  • 1.3197 is high since Monday's drop to 1.3080 on weekend Brexit deadlock
  • Asia range was 1.3142-1.3163, before GBP caught early Ldn bid
  • EUR/GBP down to eye 0.8786, 38.2 pct of 0.8723 to 0.8825 (Monday's high)
  • 0.8723 = 16-week low last week on hope Brexit deal might be agreed this week
  • UK minister says colleagues must rally behind PM May on Brexit nL8N1WW1I7

UK data: Click here

Thomson Reuters IFR Markets
Oct 16 - 05:00 AM
USD/JPY - Bears Need To Overcome Key Fibo To Force Big Drop
First appeared on eFXplus on Oct 16 - 02:45 AM
  • Bears need to take out the key 111.60 Fibonacci level to force a big drop
  • 111.60 Fibo is a 61.8% retrace of the 109.78-114.55 (August to October) rise
  • A break and daily close below 111.60 Fibo would lead to a big collapse
  • Daily momentum remains reinforcing the overall bearish market structure
  • We are looking to get short at 112.30 as this is ahead of Mon's 112.38 high
  • Bearish USD/JPY , biggest one-week drop since Feb

USD/JPY Trader:

Daily Fibo Chart: Click here

Thomson Reuters IFR Markets
Oct 16 - 03:48 AM
EUR/USD - Bulls Gear Up For Next Leg Higher Through Key Fibo
First appeared on eFXplus on Oct 16 - 02:10 AM
  • EUR/USD continues to consolidate after strong recovery from Oct's 1.1433 low
  • Market gears up for the next leg higher through the 1.1624 Fibo
  • 1.1624 Fibo is a 50 percent retrace of the 1.1815 to 1.1433 fall
  • Daily cloud, which now spans the 1.1546-1.1569 region, continues prop
  • Friday, Monday 1.1535 matching low provides is a further line of support
  • Previous bullet . USD bulls could lose the war

EUR/USD Trader:

Daily Cloud Chart: Click here

Thomson Reuters IFR Markets
Oct 16 - 02:36 AM
AUD/USD - Ignores Positive Risk Day, For Now
First appeared on eFXplus on Oct 15 - 11:15 PM
  • AUD/USD trades a range of 0.7129/50 in Asia, last at 0.7130
  • RBA minutes very similar to Sept and had no impact
  • Risk in Asia slightly better bid as stocks rebound despite Wall St fall
  • Market makes 2 attempts to break strong resistance @ 0.7142/46, fails so far
  • Likely break will target 61.8 Fibo at 0.7211, 55 DMA at 0.7235
  • Support comes in at 10 DMA and Monday low at 0.7097/99

AUDV daily: Click here

Thomson Reuters IFR Markets
Oct 16 - 12:12 AM
AUD/USD - COMMENT-AUD/USD Looks Set To Squeeze The Shorts
First appeared on eFXplus on Oct 15 - 10:55 PM

A slightly more positive risk tone in Asia points to a squeeze of the large short positions in the Australian dollar, which stood at three-and-a-half-year highs last week according to the latest CFTC data.
Asian equities are trading in positive territory despite Monday's drop on Wall Street, and Asian currencies ex-Japan are also having a reasonable day.
The mood has been encouraged by the People's Bank of China setting the USD/CNY midpoint slightly lower than yesterday's fix and well below expectations.
One caveat to the positive risk mood would be a drop in China stocks later in the session, but for now Shanghai is up 0.2 percent.
The AUD/USD is pressuring very clear resistance around 0.7142/46 - that area includes a major low from September 17 and also the 38.2 Fibo of the September to October decline.
A convincing break of 0.7150 will target the 61.8 Fibo at 0.7211 and the 55-day moving average at 0.7235.
Given the overwhelmingly bearish view of the AUD/USD, a squeeze of that magnitude looks likely in the coming sessions.

AUD daily: Click here

AUD IMM positioning Click here

Thomson Reuters IFR Markets
Oct 15 - 11:00 PM
AUD/USD - Flat After RBA Minutes, But Upward Pressure Builds
First appeared on eFXplus on Oct 15 - 08:40 PM
  • AUD/USD unchanged as RBA minutes confirm continued policy stability
  • RBA seems unconcerned by 'modest' rise in banks' funding costs nRUAFLEE3U
  • Comments on A$ consistent with previous meetings
  • Strong resistance at 0.7142/46 looks vulnerable to a short squeeze
  • Support seen at recent lows around 0.7100, 10 DMA at 0.7097
  • S/t MAs and momentum studies turning higher, supporting a topside break

AUD daily: Click here

Thomson Reuters IFR Markets
Oct 15 - 09:48 PM
EUR/USD - Next Hurdle Is EU Response To The Italian Budget
First appeared on eFXplus on Oct 15 - 07:20 PM
  • Shade firmer early after closing +0.2%, fuelled by a softer USD - inside day
  • EU's response to the Italian budget will be the next hurdle nL8N1WV1L6
  • Momentum studies flat line, 5, 10 & 21 DMAs conflict - neutral setup
  • 1.1550 1.3BLN & 1.1600 900M strikes likely contain in Asia if it's quiet
  • Close above 1.1610/24, 21 DMA & 50% Sep/Oct fall would be positive
  • 1.1558 London low & 1.1606 NY high initial support/resistance

eu oct 16 Click here

Thomson Reuters IFR Markets
Oct 15 - 08:36 PM
NZD/USD - Stronger On CPI, But RBNZ Outlook Will Not Change
First appeared on eFXplus on Oct 15 - 06:35 PM
  • +0.5% in response to strong NZ inflation, rising to 1.9% Y/Y nL8N1WV068
  • This was after a bullish outside day and rise of 0.7% yesterday
  • NZD has been in a falling trend channel since May - 0.6634 channel top
  • AUD/NZD weekly charts show a strong 1.0856/60 support since August is broken
  • While a surprise, the data is not strong enough to change the RBNZ outlook
  • Devil in the CPI detail - mostly oil & NZD - expect trend channel to hold

nzd oct 16 Click here

aun oct 16 Click here

Thomson Reuters IFR Markets
Oct 15 - 05:00 PM
EUR/CHF: Resilience To Souring Risk Sentiment May Not Last - Danske
First appeared on eFXplus on Oct 15 - 03:45 PM

Danske Research discusses EUR/CHF outlook and warns that the cross's recent resistance to risk-off bouts might be on the cusp of changing in the near-term.

"While CHF has proved surprisingly resistant to Italian risks and the equity sell-off recently, we stress that the risk of further Italy-EU confrontation as well as Brexit negotiations setbacks remain likely. This should weigh on EUR/CHF short term.

The SNB will remain reluctant to change its communication in light of the stubbornly subdued inflationary pressure and a still-distant first hike from the ECB. In the absence of new political risks, this should allow EUR/CHF to re-invoke on a gradual move back towards 1.20 in 12M. It is likely to require a clear dip below 1.10 for the SNB to start intervening on a larger scale.

Danske still looks for EUR/CHF to trade around 1.13 in 1M-month, 1.13 in 3-months, 1.16 in 6-months. 

Danske Research/Market Commentary
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