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By Paul Spirgel  —  Nov 08 - 04:11 PM
  • USD net spec G10 long -$0.31bn; $IDX -0.67% in Oct 30-Nov 5 period

  • Note considerable moves after US elex and Fed may moot this weeks data

  • EUR$ +1.04% in period; specs +26.7k contracts now -21.7k

  • $JPY -1.19%; specs sell 19.4k contracts now -44.2k; US-JP rate divergence

  • GBP$ +0.2%; specs sell 21.3k contracts long cut to 45.1k

  • $CAD -0.63%; specs sell 7.7k contracts; BoC rate well below Fed in 2025

  • AUD$ +1.14%; specs +3.5k contracts now +31k; RBA seen as more hawkish c.bank

  • BTC -4.37% in period; specs +412 contracts, now -1,457, BTC put in new ATHs after period close

 

 

Source:
Refinitiv IFR Research/Market Commentary
By Robert Fullem  —  Nov 08 - 03:00 PM
  • USD/JPY settles near midpoint of 152.14 to 153.365 trading range on EBS as long-term Treasury yields ease

  • Looks to close Friday just above its weekly cloud top of 152.41

  • Converging 21-DMA and 200-DMA at 151.68 offers strong support ahead of the Nov. 6 low of 151.30

  • Resistance includes a prior double-top near 153.88 and week's high of 154.715.

  • Government coalition negotiations over the weekend may impact pair on Monday before session of Parliament

  • BOJ to release Summary of Opinions for the Oct. meeting and Governor Ueda to speak on climate change Monday

  • US CPI and Fed speakers are also on next week's docket

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Paul Spirgel  —  Nov 08 - 01:35 PM
  • GBP$ slides into NorAm close, -0.61% at 1.2906; Friday range 1.2988-1.2885

  • Front-end UST yields a touch higher after less-dovish Fed Thursday

  • STIR futures markets still calling for Dec Fed cut, albeit odds pared

  • BoE less-dovish outlook now pricing higher terminal UK rates into YE 2025

  • Sterling's wild ride tempers after election, c.bank volatility passes

  • GBP spec long still high, w/yearend approaching may start to see selling

  • GBP$ supt 1.2901 Fri low, 1.2835 Nov 6 low, 1.2816 the 200-DMA

  • Res 1.2933 the 55-HMA, 1.2988 Friday high, 1.3009 post-election high Nov 7

Source:
Refinitiv IFR Research/Market Commentary
Nov 08 - 02:55 PM

MUFG: FX Trump Trade to Resume

By eFXdata  —  Nov 08 - 02:00 PM

Synopsis:

MUFG anticipates a resumption of USD appreciation over the coming months, following a brief pullback post-election. President-elect Trump’s strong mandate and planned policies on trade tariffs, tax cuts, and increased fiscal spending are expected to support higher yields and drive USD strength, particularly over the next 3-6 months.

Key Points:

  • Trump Policy Impact: Trump’s policies—tariffs, immigration enforcement, and fiscal expansion—are expected to lift yields and support USD, as markets anticipate swift action.
  • Market Positioning: The recent dip in USD reflects an election outcome that was already priced in, but MUFG sees room for renewed USD strength as markets position for policy implementation.
  • Medium-Term USD Risks: MUFG acknowledges that medium-term dollar strength may face headwinds as the full impact of these policies becomes clearer, though the short-term outlook favors USD gains.

Conclusion:

MUFG expects the ‘Trump trade’ to resume, with further USD upside in the near term as investors position for anticipated fiscal and trade policies. While medium-term sustainability of this strength is uncertain, a 3-6 month horizon shows strong potential for further USD appreciation.

Source:
MUFG Research/Market Commentary
By Christopher Romano  —  Nov 08 - 12:20 PM
  • AUD/USD bounced sharply off the Nov. 6 low, the bounce extended Nov. 7

  • Pair traded above 10-, 21- & 200-DMAs as well as the daily cloud base

  • AUD/USD's rally pierced the 38.2% Fib of the 0.69435-0.6513 drop

  • Upward momentum stalled, offers emerged near 0.6690/95 resistance

  • Today AUD/USD fell & erased nearly two-thirds of the Nov. 6 to 7 rally

  • Pair traded back below the daily cloud and 5-, 21- & 200-DMAs

  • Daily, monthly RSIs turned down, monthly inverted hammer is forming

  • Support sits near 0.6510, if breaks Aug. 6 daily low is then in focus

  • August's monthly low at 0.63485 may be target if that daily low breaks

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 08 - 10:45 AM

Synopsis:

According to BofA’s latest FX and Rates Sentiment Survey, investors maintain a preference for short US rates and long USD positions, aligning with expectations for fiscal expansion and higher tariffs under the new policy mix. However, with recent adjustments in rates pricing and moderate USD positioning, near-term uncertainty over the scope and timing of tariff hikes may lead to a temporary USD pause.

Key Points:

  • Investor Sentiment: Short US rates and long USD are popular trades among investors anticipating fiscal expansion and elevated tariffs.
  • Rates and Duration Positioning: With US fiscal policy risks now better priced, investor interest in duration longs has moderated to neutral in recent months.
  • USD Positioning: While USD longs have grown, they remain below historical extremes, as investors weigh uncertainties around tariff implementation.
  • Potential USD Pause: The current lack of clarity on the scale and timing of tariff hikes could temper immediate USD bullish momentum.

Conclusion:

BofA observes strong sentiment for short US rates and long USD, yet near-term USD gains may slow as markets await more concrete details on tariff policy. This measured outlook suggests a potential pause in USD momentum, even as the broader policy backdrop supports continued investor interest in USD and short rates.

Source:
BofA Global Research
By Rob Howard  —  Nov 08 - 09:40 AM
  • EUR/GBP elicits support by 0.8307 after falling from 0.8325 (intra-day high)

  • 0.8307 was 1-week low Thursday, after GBP rose on relatively hawkish BoE cut

  • Trump tariff fears are helping weigh on the euro more than the pound

  • Trump last week said the EU would "pay a big price" if he was elected

  • Citi went short EUR/USD on Thursday, initial target 1.0630, stop at 1.0915

  • BoE must look past budget's temporary inflation hit, Pill says nL8N3MF1KI

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 08 - 09:30 AM

Synopsis:

Credit Agricole anticipates that Trump’s second term could initially support USD strength due to expected fiscal stimulus and potentially sticky inflation from tariffs. However, by late 2025, the USD may weaken as the US growth advantage fades, the Fed’s rate cuts accumulate, and Trump’s weak-USD stance gains traction in a slower economic environment.

Key Points:

  1. Lessons from Trump’s First Term:

    • Fiscal stimulus might improve chances of a US soft landing, while trade tariffs could make inflation more persistent, supporting a less dovish Fed stance.
    • Currency depreciation attempts by US trade partners in response to tariffs could lift USD further, as happened during Trump’s first term.
  2. USD Strength Dynamics and the “Impossible Trinity”:

    • In Trump’s first term, attempts to talk down the USD conflicted with inflationary policies and a resilient economy, which led the Fed to adopt a hawkish stance, supporting USD gains.
  3. Key Differences in 2024-2025:

    • The US economy is currently slowing, and new tariffs could intensify downside growth risks.
    • Unlike the first term, Fed easing is expected to continue despite potentially sticky inflation, especially as trading partners’ currencies are already weaker, limiting their ability to devalue competitively.
  4. Long-Term USD Outlook:

    • Credit Agricole expects USD strength to persist in early 2024, but it could face declines by late 2025 as relative US growth wanes, Fed cuts increase, and Trump’s weak-USD doctrine gains impact.

Conclusion:

Credit Agricole sees initial USD support in Trump’s second term but expects USD to lose ground by 2025 as Fed cuts accumulate and US growth moderates. Near-term focus will be on US CPI, retail sales, and Fed comments for further insights on the “Trump trade.”

Source:
Crédit Agricole Research/Market Commentary
By eFXdata  —  Nov 08 - 08:31 AM

Synopsis:

ANZ expects USD strength to moderate in the short term, as extended long positioning unwinds and year-end seasonality sets in. Meanwhile, the GBP could face challenges with key data releases ahead, especially if growth and employment figures show weakness, though recent BoE caution has lent the pound some support.

Key Points:

  • USD Outlook:

    • Post-election USD gains are softening as long positions ease and seasonal risk-on sentiment emerges.
    • Trump’s promises on spending and tariffs support a USD-positive narrative, but global economic softness in the EU and China keeps the DXY firm.
    • While improved PMIs in China and the EU hint at recovery, sustained global growth could shift the USD trajectory downward by 2025.
    • Near-term CPI data will be crucial, with a higher reading potentially supporting USD strength, while weaker data may be overlooked for now.
  • GBP Outlook:

    • GBP gained modest support from a cautious BoE 25bps cut and the USD’s pullback.
    • The BoE’s upward revisions for growth and inflation in 2025-2026 reflect fiscal impacts, with Governor Bailey signaling a measured easing approach.
    • Upcoming labor and growth data, including wage growth and Q3 GDP, will be closely watched. Weak readings could pressure GBP on crosses, especially with year-end trends favoring risk-sensitive currencies like AUD and NZD.

Conclusion:

ANZ projects USD to soften slightly in the near term, supported by seasonal factors and easing long positions, while GBP could face downside if growth and employment data disappoint. Stronger-than-expected US CPI may add marginal USD support, but softer UK data could weigh on GBP amid broader risk-on currency gains.

Source:
ANZ Research/Market Commentary
By Peter Stoneham  —  Nov 08 - 06:50 AM
  • A volatile week for USD/CAD and set to end near mid-range

  • Wed's price extremes set the range, 1.3817-1.3958

  • Choppy price action has clouded direction

  • Despite Wed's rally the market is trading clear below its 2024 1.3959 high

  • Weekly chart set to record a bearish harami (inside week)

  • On balance, the CAD holds an advantage with a USD/CAD reversal the risk

  • USD/CAD Trading Page TGM2345

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Nov 08 - 05:50 AM
  • EUR/USD 1.0448-1.1276 in 2024 - second smallest range on record

  • So far 2023 range is smaller at 1.0601-1.1214

  • In November pair trades 1.0683-1.0937 and it was supposed to be busy

  • Start Fed easing cycle and U.S. election spurred a lot of speculation

  • Instead EUR/USD returned to the centre of 2023's range

  • Strong chance that traders pare bets and year ends quietly nL1N3MF0D2

  • Plunging volatility may set tone for rest of this year nL1N3MF0C3

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 08 - 05:10 AM
  • The daily chart shows failures on both sides, which could see consolidation

  • Spot failed below the 1.0746 Fibonacci level, trapping bears

  • 1.0746 Fibo is a 76.4% retrace of the 1.0602 to 1.1214 2024 (EBS) rise

  • It also failed above tenkan line, 1.0810, putting bulls in a bind

  • As 14-day momentum flipped to negative Wed, the bias is slightly bearish

  • EUR/USD Trader TGM2334. Previous nL1N3ME0GL

Source:
Refinitiv IFR Research/Market Commentary
By Martin Miller  —  Nov 08 - 03:35 AM
  • USD/JPY failed above the broken 153.41 Fibo, leaving a "bull trap"

  • 153.41 Fibo is a 61.8% retrace of the 161.96 to 139.58 2024 (EBS) drop

  • A bull trap is set when a market breaks above a tech level but then reverses

  • It is usually a bearish sign and points to a likely new top in the market

  • Expect losses to the kijun line, now at 150.32

  • USD/JPY trader TGM2336. Previous update nL1N3ME0HB

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Nov 08 - 03:15 AM
  • Big swings have clouded direction this week

  • Daily momentum studies have held close to neutral levels

  • Underlying risk remains skewed to the downside but is fading

  • The daily cloud base contains the topside, currently 1.3050

  • A 38.2% Fibo off the 1.3434-1.2835 drop is at 1.3064

  • Weekly doji star highlights indecision and a degree of equilibrium

  • The star doji can warn of a reversal: a shift of supply to demand

  • GBP/USD trader TGM2338

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Nov 08 - 02:35 AM
  • Cable has traded a 41 pip range since 25 bps Fed cut Thursday; 1.2949-1.2990

  • 1.3008 was high before Fed cut, after GBP rose on relatively hawkish BoE cut

  • Consensus expectation is for BoE hold in Dec, and another 25 bps cut in Feb

  • Barclays then forecasts 25 bps BoE cuts in May, June, August and Sept 2025

  • 1.2835 was GBP/USD 12-week low on Wednesday, after USD jumped on Trump win

  • Powell says he will not quit even if asked by Trump (his term ends May 2026)

Source:
Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Nov 08 - 02:05 AM
  • EUR/USD: 1.0700 (971M), 1.0750 (1.0BLN), 1.0780-85 (1.7BLN)

  • 1.0795-00 (2.2BLN), 1.0810-15 (406M), 1.0825-35 (851M)

  • 1.0850-60 (1.23BLN), 1.0875-80 (547M), 1.0885-90 (1.9BLN)

  • 1.0895-00 (875M), 1.0915-25 (2.0BLN)

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 07 - 10:15 PM
  • Trades 0.35% lower at the base of a busy 0.6656-0.6681 range on FX matching

  • A modest correction of Thursday's 1.7% bounce- steady e-minis and UST yields

  • Oil and metals are a touch softer, Nikkei +0.35%, AsiaxJP +0.65%

  • USD and risk appetite to lead AUD offshore - light EZ and US data schedule

  • Charts; 5, 10 & 21-day moving averages conflict, 21-day Bolli bands contract

  • Daily momentum studies edge higher - signals show a modest topside bias

  • The close above 0.6640 21 DMA targets a test of the 0.6728 0.5% Sep/Nov fall

  • Thursday's 0.6565 base and this week's 0.6513 low are initial supports

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 07 - 10:05 PM
  • Off 0.1% in a 1.2965-1.2988 range, busy early then quiet on FX Matching

  • Low key end to the week in Asia after a hectic period of major event risk

  • The UK's jobs market showed further signs of cooling in September

  • There is no UK data today, so risk appetite and the USD to lead sterling

  • Charts - daily momentum studies rise, 21-day Bollinger bands gently contract

  • 5, 10 & 21-day moving averages coil - signals show no real bias

  • Thursday's 1.2877 low then this week's 1.2835 base are initial supports

  • Last week's 1.3043 high capped - 1.3103 Oct 15 top is next resistance

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 07 - 08:00 PM
  • Off 0.2% - a modest correction so far of Thursday's 1.7% jump

  • Asia takes the positive lead from Wall Street, Nikkei +0.8%, AsiaxJP +0.4%

  • Treasury yields and e-minis are little changed, commodities quiet so far

  • After a volatile week full of event risk, Asia may cruise into the weekend

  • Charts; 5, 10 & 21-day moving averages conflict, 21-day Bolli bands slip

  • Daily momentum studies edge higher - signals show a modest topside bias

  • Close above 0.6640 21 DMA targets a test of the 0.6725 0.5% Sep/Nov fall

  • Thursday's 0.6565 base and this week's 0.6513 low are initial supports

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 07 - 06:45 PM
  • Steady after closing up 0.7% with the USD 0.75% lower and UST yields fell

  • Euro zone retail sales outperformed expectations - good news for EZ economy

  • There is no tier 1 EZ data or ECB events, so the USD to lead EUR/USD

  • Charts - negative daily momentum studies, 21-day Bollinger bands slip

  • 5, 10 & 21-day moving averages edge lower, signals retain a bearish setup

  • 1.0827/40 5, 10 & 21 DMAs then this week's 1.0937 high are first resistance

  • Thursday's 1.0713 low then Wednesday's 1.0682 base are the initial support

  • 1.0800 - 1.849 BLN strikes may act as a magnet in Asia

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Nov 07 - 06:40 PM
  • Off 0.05% after jumping 1.7% with the USD off 0.75% and softer UST yields

  • Commodities climbed - U.S. copper closed up 4.5% on China stimulus optimism

  • There is no significant Aus data or RBA events, so risk and USD lead AUD

  • It was a hectic week for event risk - Asia may consolidate into the weekend

  • Charts; 5, 10 & 21-day moving averages conflict, 21-day Bolli bands contract

  • Daily momentum studies edge higher - signals show a modest topside bias

  • Close above 0.6642 21 DMA targets a test of the 0.6722 high on Oct 21st

  • Thursday's 0.6565 base and this week's 0.6513 low are initial supports

    For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Nov 07 - 02:49 PM

Synopsis:

CIBC notes that the November FOMC meeting delivered the expected 25bps rate cut, with minor adjustments to the statement. The Fed removed language indicating "greater confidence" in inflation reaching target, aligning with today’s smaller rate cut. The statement retained the view of balanced risks, acknowledging recent election-related uncertainties and mixed economic data.

Key Points:

  • Expected Rate Cut: The Fed reduced the funds rate by 25bps, as anticipated, with no major changes in the meeting outcome.
  • Statement Adjustments: The FOMC omitted its previous "greater confidence" language on inflation, consistent with a more cautious approach following September's larger rate move.
  • Economic and Market Uncertainties: Since September, election results and recent data have added economic uncertainty, while GDP revisions indicate a stronger underlying growth trend and a gradually cooling labor market.

Conclusion:

CIBC describes the November FOMC as straightforward, with the Fed maintaining its balanced view of risks and responding to evolving economic conditions with a modest rate cut. The statement’s tone reflects caution amid recent uncertainties, yet it leaves the door open for further adjustments based on upcoming data.

Source:
CIBC Research/Market Commentary
By Paul Spirgel  —  Nov 07 - 02:35 PM
  • GBP$ firm in NorAm afternoon, -0.7% at 1.2972; Thursday range 1.3009-1.2880

  • Pair a tad soft after Fed -25bp cut; statement tipped slightly hawkish

  • Fed cuts rates, notes labor market easing and solid economic growth

  • BoE took similar tack w/their 25bp cut; Bailey sees gradual policy shift

  • BoE brightens sterling outlook a day after US election-fueled drubbing

  • Data dependent into YE; IRPR indicates 20% odds for BoE cut

  • CME Click here tool pricing 63% odds for -25bp on Dec 18

  • GBP$ supt 1.2956 post-Fed low/200-HMA, 1.2877 Thursday low

  • Res 1.2990 the 100-DMA, 1.3050 dly cloud base, 1.3135 50% of 1.3434-1.2835

  • A close above 1.3135, 50% Fib, shifts momentum for GBP bulls for test of Oct highs

Source:
Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Nov 07 - 02:15 PM
  • NY opened near 0.6630 after 0.6565 traded in Asia, rally extended 0.66875

  • US yield US2YT=RR drops drove broad based US$ selling, lifted AUD/USD

  • USD/CNH drop to 7.1420 & equity ESv1 gains reinforced US$ selling theme

  • Commodity HGv1, XAU= gains helped to buoy the Australian dollar

  • Pair slipped off the high, sat near 0.6670 into the Fed statement

  • Fed cut by 25bps , US$ firmed after statement, AUD/USD dipped below 0.6660

  • Pair remained up +1.37% which helped technicals lean bullish

  • RSIs imply upward momentum & AUD/USD held above 21-DMA, daily cloud base

  • November University of Michigan survey is a key data risk Friday

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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