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By Paul Spirgel  —  Aug 07 - 04:01 PM
  • Dollar net spec short position rises in Jul 29-Aug 4 period nL1N2F91N7

  • EUR spec remain on bid, long rose 23,089 contract to 180,648 new ATH

  • EUR long tops 50% of gross positions, hints longs may look to exit

  • JPY specs +2,922 now long 31,429 contracts, amid growing US-China angst

  • GBP specs shrug off EU-UK trade dithering, +10,682 contracts now sht 14,727

  • CAD specs sell 11k, AUD specs buy 4k, NZD specs sell 603 contracts


IMM Position Charts: Click here

IMM Position Table: Click here

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Aug 07 - 02:55 PM
  • USD/JPY driven up before, but mostly after, payrolls nL1N2F9115

  • Day's 105.48 EBS low held the 10-DMA there, after tenkan supported Thursday

  • Kijun at 105.99 breached intraday; close above needed to eye 30-DMA @106.63

  • 106.63 is also the mid-July range low broken below on July 24

  • July 24 also ended U.S. supplemental unemployment benefits

  • Deal on those benefits and other relief yet to be found

  • Weeklies remain bearish while below the 106.70 kijun

For more click on FXBUZ

Chart Click here

Chart Click here

Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Aug 07 - 01:40 PM
  • US-Sino tensions heat-up, sanctions imposed on HK's Lam nL1N2F90T9

  • Equities, commodities, AUD/JPY sink as safe-havens US$ & yen rally

  • July jobs data improves risk sentiment but only briefly nL1N2F90G9

  • AUD/USD falls, pierces the 10-DMA & Aug 5 low, nears 0.7140

  • Falling RSIs & monthly doji candle imply correction in the rally is due

  • 0.7060/70 zone is key support, if breaks correction could be deep

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 07 - 01:40 PM

Societe Generale Research keeps recommending short NZD/JPY and short GBP/CHF as its preferred trades for August.

"It’s striking that the volatility and the ‘normal’ seasonal moves are concentrated in EM. The very fragile three – TRY, ZAR, BRL, are down by an average of over 3% against the dollar and almost 4% against the euro, but NZD, AUD, CAD and GBP, the G10 currencies which find August tough, are doing OK so far. The yen and Swiss franc, by contrast, may be up against the dollar but not against any of the other G10 currencies," SocGen notes. 

"Still, we’ll persist with GBP/CHF and NZD/JPY shorts, as well as longs in EUR/USD vol," SocGen adds. 

Société Générale Research/Market Commentary
By Christopher Romano  —  Aug 07 - 11:40 AM

EUR/USD fell as rising U.S.-China tech tensions nL1N2F902E hurt risk sentiment, fueling a temporary pullback driven by short-dollar profit taking that could eventually expose more attractive levels for euro bulls to buy.

President Donald Trump's bans on U.S. transactions with the Chinese owners of messaging app WeChat and video-sharing app TikTok nL1N2F9037 escalated U.S.-Sino tensions, made worse after Washington sanctioned Hong Kong Chief Executive Carrie Lam and other officials nL1N2F90T9, sending China's yuan CNH= weakening toward 6.9800 against the dollar.

Flows out of riskier investments and into the safe-haven dollar helped pressure EUR/USD lower, breaking below the 10-day moving average.

But longer-term EUR/USD bulls may benefit.

The U.S. job recovery is slowing despite an above-forecast non-farm payrolls report nL1N2F81T3, which nevertheless firmed U.S. Treasury yields and softened fed funds prices.
Still, rates appeared unlikely to appreciate, which should limit dollar rallies.

Dollar =USD technicals are oversold, indicating consolidation of its drop is likely, but the broader dollar trend remains bearish.

In the short-term EUR/USD could correct lower but a return to the bull trend and test near 1.2000 seems probable.

For more click on FXBUZ

eur/usd Click here

usd/idx Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 07 - 10:45 AM

MUFG Research flags a scope for USD rebound in the near-term, expressing that via recommending a short EUR/USD as it ToTW targeting a move towards 1.16.

"The recent pick-up in FX volatility and lower yields on offer is undermining the attractiveness of carry currencies. Weakness in the TRY, ZAR, and RUB started to become more evident in June. The RUB has weakened even as the price of oil has risen to fresh highs which leaves it looking more attractively valued. Recent RUB weakness could reflect market participants pricing in more of a political risk premium ahead of the US election. The increasing likelihood a Democratic administration would be viewed as less favourable for US and Russia relations including a higher risk of more sanctions," MUFG notes. 

"So far the negative spill-over impact has been seen mainly in the ZAR which has also fallen sharply by around 5% against the USD over the past week. As we saw back in 2018 though, there is a risk that the impact from a more disorderly TRY sell off could be felt more broadly. EUR/USD fell by around 4 big figures during the 1H of August 2018 and subsequently weakened later in 2018 in part driven by the loss of growth momentum in the euro-zone economy resulting from the sharp hit to domestic demand in Turkey after the CBoT was forced to hike their key policy rate by around 16 percentage points to help stabilize the TRY," MUFG adds.

MUFG Research/Market Commentary
By Paul Spirgel  —  Aug 07 - 11:05 AM

GBP/USD went on the defensive after a whipsaw reaction to a solid U.S. non-farm payrolls report nL1N2F90G9 sent dollar shorts looking to cover positions ahead the weekend in the face of rising political and trade risks.

The payrolls reaction pulled cable away from early-U.S.
session highs at 1.3108 before stabilizing near 1.3040. The dollar's rise began over U.S.-China tensions nL1N2F9037 and picked up steam after the jobs beat, but the rally may also be weekend profit-taking of stretched shorts in the U.S. currency.

GBP/USD and EUR/USD have made multiple attempts at trend highs, with cable finding resistance ahead of March 9's 1.3200 high and the euro failing in several forays above 1.1900 over the last week, which may have prodded weak dollar shorts to book gains in case weekend China trade or coronavirus news takes a turn for the worse.

GBP/USD probed below its first line of support, the 10-day moving average, at 1.3042, and a close below there would bring a series of July lows into play and a stack of DMAs beginning with the 21-DMA at 1.2834 and finally the 100-DMA at 1.2489.
For more click on FXBUZ

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 07 - 09:35 AM

Bank of America Global Research discusses the current market conditions and notes that market consensus may be too complacent ahead of major risks ahead such as US elections in November and the potential for a vaccine by year-end. To express this view, BofA is currently short USD/JPY and short GBP/CHF via options structure

"Given the strong market consensus against the USD, the USD can keep weakening. As we noted, technicals, quant and flows, which to a large extent reflect how the market is trading now, are still against the USD. We would not try to catch a falling knife. Despite the sharp drop, the USD also remains overvalued compared to its long-term equilibrium, although by only about 3.7%, compared with 12% at the end of March," BofA notes.

"However, our discussion suggests that the market consensus may be too complacent or optimistic ahead of a number of risks," BofA adds.


BofA Global Research
By Christopher Romano  —  Aug 07 - 07:40 AM
  • Trump's TikTok executive order heighten US-Sino tensions nL1N2F902E

  • Equities ESv1, copper HGv1 and iron-ore DCIOc2 sink on soured risk

  • China's yuan weakens, USD/CNH rallies near 6.9750 then dips near 6.9575

  • Safe-havens US$ & yen are bid, AUD/JPY dips below 76.00, little bounce seen

  • AUD/USD dips below 0.7200 and hovers just above that level as NY gets going

  • US July jobs report due, could drive a break the recent 0.7150/0.7250 range

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Aug 07 - 06:00 AM
  • EUR/USD extends setback from Thurs new 2yr high at 1.1916, to 1.1810

  • Wed's 1.1793 low is next support ahead of Tues-Mon lows 1.1722-1.1695

  • Mild USD recovery, dealers trimming positions ahead of U.S jobs/weekend

  • Options booking profits, hints at EUR consolidation phase nL1N2F908D

  • Uptrend still intact, minimum 23.6% retrace of March-Aug recovery 1.1595

  • Options price tame reaction to Fri's jobs data nL1N2F908Z

EUR=EBS Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Aug 07 - 05:25 AM
  • FX traders have been exiting USD/JPY all week, according to EBS flow data

  • In times of uncertainty, funds usually flow into the safe-haven yen

  • U.S. job growth forecast to slow sharply as COVID-19 cases soar nL1N2F81G6

  • Yen bought, while pound, AUD and rand usually sold in August nL1N2F82SS

  • USD/JPY tenkan and kijun lines are negative: bearish nL1N2F907Z

  • USD/JPY's recent short covering was capped at Monday's 106.47 peak

  • USD/JPY sees a 105.48-69 Fri (EBS) range, EUR/JPY sees 124.84-125.39

EBS Flow Chart: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Aug 07 - 03:50 AM

The AUD/USD chart is bullish, but factors such as August seasonality call into question the likelihood of further gains.

AUD/USD closed above the 0.7133 Fibonacci level in July, a 61.8% retracement of the 0.8136 to 0.5551 (2018 to 2020) drop, unmasking the 0.7516 Fibonacci level, 76.4% of the same decline.

However, AUD/USD's August performance since 2000 shows it has fallen in 15 of the past 20 years.
Seasonality should not be considered in isolation, but combined with other factors it can be a useful tool.

In times of uncertainty, funds usually flow out of the Australian dollar.
Australia's open and export-heavy economy is vulnerable to global trade tensions nL1N2F9037.

A plot of the AUD/USD daily returns since the start of 2020 shows the Australian dollar has been much more volatile compared with the USD index.
It also reveals AUD/USD has been susceptible some brutal daily collapses, meaning it is not an ideal candidate to shelter from the coronavirus pandemic's effects.
Related nL4N2F90QA

For more click on FXBUZ

Monthly Chart: Click here

Seasonality Monthly Chart Click here

FX 2020 Daily Returns Chart: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Aug 07 - 03:00 AM
  • EUR/USD nL1N2F907Q and GBP/USD nL1N2F908E remain positive

  • We are long at 0.9020 for a bullish resumption to a major 0.9183 Fibo

  • 0.9183 Fibo is a 61.8% retrace of the 0.9500 to 0.8671 (March to April) drop

  • EUR/GBP found support found one pip below the 0.8982 Fibonacci level

  • 0.8982 Fibo a 38.2% retrace of the 0.8671 to 0.9175 (April to June) rise

  • EUR/GBP Trading Page TGM2343. Previous upside nL1N2F708G

Daily Chart: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Aug 07 - 02:00 AM
  • Tenkan and kijun lines are negative aligned, reinforcing the bearish bias

  • USD/JPY set for a bearish spiral through the 105.07 Fibo

  • 105.07 Fibo is a 61.8% retrace of 104.20 to 106.47 (Fri to Mon) rise

  • A break, daily close below 105.07 Fibo would weaken market structure further

  • USD/JPY Trader TGM2336. Prev nL1N2F808E. USD/JPY shorts nL1N2F409E

  • A EUR/USD close above a key Fibo would be a big boost nL1N2F907Q

Daily Ichimoku Chart: Click here

Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Aug 07 - 01:50 AM
  • Euro's historic long highlights a structural shift nL1N2F807X

  • EUR/USD broke but failed to register a weekly close above the 1.1823 Fibo

  • 1.1823 Fibo is a 61.8% retrace of the 1.2556 to 1.0636 (2018 to 2020) drop

  • That failure slowed gains, but fourteen-week momentum remains positive

  • A close at the end of this week would help boost EUR/USD next week

  • We are long at 1.1790 for 1.1995, while our stop is at cost

  • EUR/USD Trader TGM2334. Previous EUR/USD update nL1N2F72XC

Weekly Chart: Click here

Refinitiv IFR Research/Market Commentary
By Krishna K  —  Aug 06 - 11:45 PM
  • AUD/USD down 0.3% as RBA says AU economic recovery slowed by virus 2nd wave

  • Slips to 0.7203 from 18-month peak of 0.7242 traded earlier Friday

  • C.bank cuts GDP outlook as virus returns to Melbourne nL4N2F90QA

  • Economy seen expanding 4% next year, down sharply from earlier 7% prediction

  • Sino-U.S tensions weigh; Trump imposes U.S. ban on WeChat, TikTok in 45 days

  • CNH weakens 0.4%, Shanghai Composite -1%, weigh on AUD nL1N2F9037

  • China July iron ore imports at highest monthly total on record, AUD positive

  • Focus shifts to U.S. July NFP in New York Friday

  • Resistance 0.7240-45, 0.7260 200-week MA; support 0.7200-05, 0.7175-80

  • For more click on FXBUZ

AUD/USD: Click here

Refinitiv IFR Research/Market Commentary
By Krishna K  —  Aug 06 - 10:20 PM
  • AUD/USD down 0.1% as RBA says AU economic recovery slowed by virus 2nd wave;

  • Surging virus toll in Victoria since June has worsened economic outlook- RBA

  • C.bank says AUD now in range that is broadly consistent with fundamentals

  • AUD slips to 0.7217 from 18-month peak of 0.7242 traded earlier Friday

  • Sino-U.S. tensionsnL1N2F9037, U.S. virus aid bill doubts capnL1N2F80Q6

  • China July trade data in Asia & U.S. July NFP in New York the focus Friday

  • Resistance 0.7240-45, 0.7260 200-week MA; support 0.7200-05, 0.7175-80

  • Weekly close above 200-WMA strengthens uptrend; RBA nS9N2EK01B

  • For more click on FXBUZ

AUD/USD: Click here

Refinitiv IFR Research/Market Commentary
By Krishna K  —  Aug 06 - 06:15 PM
  • AUD/USD opens 0.6% higher, buoyed by rally in equities, gold & iron ore

  • Wall St averages all gain on hopes of U.S. coronavirus aid billnL1N2F80Q6

  • Gold extends record-breaking run, Dalian iron ore rises 2.9% nL4N2F81LZ

  • Yield on AU 10-year debt 32 bps above U.S. Treasury notes, supports AUD

  • AUD/JPY +0.6%, nears 76.78-76.86 June -July highs; EUR/AUD down 0.5%

  • RBA SOMP, China July trade data in Asia & U.S. July NFP in NYK the focus Fri

  • Resistance 0.7240-45, 0.7260 200-week MA; support 0.7200-05, 0.7175-80

  • Weekly close above 200-WMA strengthens uptrend; Reuters poll nL4N2F815A

  • For more click on FXBUZ

AUD/USD: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 06 - 03:20 PM

TD Research summarizes its bias on EUR/USD, USD/JPY, and GBP/USD. TD is short USD/JPY as its ToTW for this week targeting a move towards 104.

"The market moves this morning focus on a regional mix of drivers, reflecting the pullback in broader EM but some outperformance in G10," TD notes. 

"For G10, GBP takes center stage in light of a less-dovish-than-expected BoE meeting this morning. The next critical level for GBPUSD is 1.32. USDJPY continues to hold 106, reaffirming our bias that the next move is lower. EURUSD continues to hold below 1.19 but remains a buy on dips in the months ahead,"TD adds. 

TD Bank Research/Market Commentary
By Randolph Donney  —  Aug 06 - 03:15 PM

The dollar played defense after an upbeat jobless claims report failed to inspire durable gains as the build-up to Friday's crucial non-farm payrolls report and coronavirus fiscal relief talks clouded the outlook.

Investors used EUR/USD's pullback after the jobless claims beat as a buying opportunity on the assumption that falling U.S. nominal and real interest rates and the Fed resolve to backstop markets with cheap liquidity nL1N2F815S could weigh on the dollar for sometime.

But, with EUR/USD struggling this week to extend July’s manic advance, a touch of pre-event risk and weekend caution was evident, even with traders eyeing a rise to 1.2000.

The unexpectedly low weekly claims nL1N2F71R8 wasn't sufficiently impressive to relieve pressure on Congress and the White House to extend fiscal supports nL1N2F71R8.

With the House and Senate far apart on key issues nL1N2F72Y7, President Donald Trump said he was continuing work on an executive order targeting eviction protections and unemployment benefits nL1N2F81AX.

Sterling struck new pandemic highs nL1N2F81JM against the dollar after the BoE held policy unanimously steady and took the possibility of negative rates off the agenda for now nL1N2F80V9.

Still, cable has yet to clear the 1.3200 pre-pandemic peak from March 9.
And the growing divergence between rising U.S. stocks and falling UK equities, Brexit risks, and overbought techs may hinder sterling as it approaches 2019’s highs.

USD/JPY held a tight, choppy range, briefly piercing the 50% Fibo of the 104.195-6.47 rebound from July’s low, at 105.33 in the wake of the claims report nL1N2F81O1.
Japan’s recovery has been less robust than most major economies, including the U.S., somewhat reducing the drag on the dollar from the lowest Treasury-JGB yield spreads in 40 years.

Nonetheless, USD/JPY remains in a downtrend on daily, weekly and monthly charts.
Since Monday’s peak briefly revisited the mid-July range lows, USD/JPY has followed the falling daily kijun and tankan -- last at 105.99/33 -- lower, unable to close beyond either line.
A close below the 50% Fibo at 105.33 could foreshadow a retest of key supports by 104, with 105 pivotal along the way.

AUD/USD rose about half a percent nL1N2F81LE despite Melbourne starting a six-week pandemic lockdown likely to hit the economy, as firm commodity prices and mining stocks added lift beyond the weakening U.S. dollar.

High-beta and emerging markets currencies diverged, as the Turkish lira’s meltdown to record lows continued, with ZAR, BRL and RUB also losing ground, while MXN recovered early losses to reach roughly unchanged.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Aug 06 - 01:40 PM
  • GBP/USD ending NorAm +0.35% at 1.3160; NY range 1.3178-20

  • BoE holds, defers on neg rates; GBP/USD eyes Mar high 1.3200 nL1N2F808X

  • Pair firm into close, drifts back toward early Europe high 1.3178

  • US payrolls trepidation tempers BoE-inspired sterling rally nL1N2F80V9

  • Above Jan 31's 1.3210 bulls eye Dec 31's 1.3284, then post-elex high 1.3516

  • EUR/GBP -0.23% at 0.9023, Thurs range 0.9053-0.8985 on UK neg rate reprieve

  • EUR/USD offered above 1.19, 3rd try in last 5 sessions weighs on cross

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 06 - 02:00 PM

Societe Generale Research flags a scope for a correction in EUR/JPY and GBP/JPY in the near-term.

"The MPC left policy on hold this morning, and downgraded 2021 growth forecasts at the same time as raising 2020 ones. The pace of QE is slowing this month but will pick up if needed and the merits (there are few) of negative rates are still being examined. That GBP is a bit stronger and rates a bit higher speaks to illiquid markets and bearish GBP sentiment," SocGen notes.

"It's unusual for the dollar to under-perform other G10 currencies (yen excluded) when it's going up against EM. These are very unusual times but the euro's move higher against both yen and dollar in a risk-off world doesn't look sustainable

EUR/JPY looks very over-stretched and unlikely to hold these levels for much longer. Much the same could be said of GBP/JPY, for that matter," SocGen adds.


Société Générale Research/Market Commentary
By Rob Howard  —  Aug 06 - 10:05 AM
  • More cable stops may be sheltering above 1.3210 (Jan 31/7 high)

  • 1.3210 is a quarter-cent beyond Thursday's five-month high

  • Ascent to 1.3185 fuelled by BoE's message about negative rates nL8N2F81TQ

  • 1.3200 (March 9 high) is a key resistance level ahead of 1.3210

  • McConnell says U.S. needs 'another boost' as COVID-19 relief talks continue

  • See: nL1N2F80Q6. U.S. July jobs report due Friday 1230GMT nL1N2F71R8

GBPUSD Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Aug 06 - 10:45 AM

MUFG Research sees NZD gains likely limited in the near-term.

"Like all G10 currencies, NZD advanced versus the US dollar in July with a broadbased USD sell-off reflecting numerous factors like concerns over US growth due to the renewed spread of COVID and the expectations of continued aggressive monetary easing from the Federal Reserve. But we are cautious over the possibility for NZD to continue advancing," MUFG notes. 

"The RBNZ has expressed some reservations over NZD strength and this could encourage the RBNZ to implement additional monetary easing ahead...Additional QE or a more active policy of intervention are possibilities and the prospect of negative rates being adopted later in the year will remain. The RBNZ NZD TWI has gained further and is now at levels higher than when COVID hit and further gains to the upside would imply a break of the downtrend that has been in place since 2017. Given the prospect of the RBNZ resisting further NZD strength we see gains ahead moderating," MUFG adds. 

MUFG Research/Market Commentary
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