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Oct 19 - 03:48 AM
EUR/USD's Risk Grows For Deeper Collapse Through Key Fibo
First appeared on eFXplus on Oct 19 - 02:05 AM
  • EUR/USD bias is squarely on the downside, the risk grows for further losses
  • Test of the 1.1422 Fibo, a 76.4% of the 1.1433 to 1.1622 (EBS) rise, likely
  • Wed's long black candlestick weighs heavily on the market
  • Looking to get short at 1.1510 in anticipation of the next bearish move
  • An overshoot to the upside will likely be halted by the daily cloud base
  • Biggest Oct one-day drop Wednesday ends under cloud, Fibos

EUR/USD Trader:

Daily Cloud Chart: Click here

Thomson Reuters IFR Markets
Oct 19 - 02:36 AM
AUD/USD - Remains Buoyant As Stocks Stabilise For Now
First appeared on eFXplus on Oct 18 - 11:05 PM
  • AUD/USD gyrates around par in Asia, last up 0.1% at 0.7108
  • China GDP misses fcasts but authorities finally drag SSEC into +ve territory
  • AUD/USD has neutral setup as momentum studies mixed, s/t MAs flatten
  • Clear close below 10 DMA at 0.7106 would be bearish, target 0.7041 trend low
  • Close above 21 DMA @ 0.7151 needed for move higher, targets 55 DMA @ 0.7230
  • Stocks and yields to be the main drivers for the AUD later in the day

AUD daily: Click here

Thomson Reuters IFR Markets
Oct 19 - 01:24 AM
First appeared on eFXplus on Oct 18 - 11:05 PM

EUR/USD: Neutral (since 21 Aug 18, 1.1485): The major 1.1400 support appears to be ‘vulnerable’.

We indicated yesterday (18 Oct, spot at 1.1505) EUR could “weaken further in the coming days” but highlighted “strong support is expected at 1.1430”. However, the subsequent decline was more rapid and ‘impulsive’ than expected as EUR plummeted to a low of 1.1447. The price action not only suggests a break of 1.1430 seems likely now but also the next support at 1.1400 is ‘vulnerable’. Looking ahead, a clear break of 1.1400 would be a good indication that EUR could threaten the year-to-date low near 1.1300. All in, we expect EUR to stay on the defensive in the coming days unless it can reclaim 1.1540 (‘key resistance’ was at 1.1590 yesterday).

GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): Break of 1.3000 would shift focus to 1.2920/25.

GBP plunged and lost -0.70% yesterday as it closed at 1.3019 in NY. While the bottom of our expected 1.3000/1.3250 consolidation range is still intact, the impulsive decline suggests further GBP weakness is likely in the coming days. As highlighted yesterday (18 Oct, spot at 1.3110), “a break of 1.3000 would suggest that GBP is ready to tackle the 1.2922 low seen earlier this month” (even though the anticipated price action has evolved much faster than expected). In other words, instead of trading sideways, GBP has likely moved into a ‘negative’ phase. Only a break of the ‘key resistance’ at 1.3125 would indicate that the current downward pressure has eased.

AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD likely to trade within a broad range.

There is not much to add as AUD hardly budged and remains within a 0.7095/0.7160 range since late last week. The underlying tone has weakened somewhat but at this stage, we are comfortable in holding the same view (since last Friday, 12 Oct, spot at 0.7120) wherein AUD is trading within a broad 0.7040/0.7200. From here, 0.7040/0.7160 is likely enough to contain the movement in AUD, at least for the next one week or so.

NZD/USD: Neutral (since 20 Aug 18, 0.6625): Upward pressure has eased, NZD to trade sideways for now. No change in view.

In our update on Tuesday (16 Oct, spot at 0.6575), we highlighted “a break above 0.6600 would not be surprising” but added, “only a clear break of 0.6630 would indicate that NZD is ready for a stronger recovery”. NZD touched a 2-week high of 0.6602 yesterday (17 Oct) but succumbed to selling pressure and ended the day on a weak note (NY close of 0.6550, -0.57%). While the ‘key support’ at 0.6530 is still intact, the weak daily closing is enough to indicate that the recent upward pressure has eased. That said, there is no change to the overall neutral outlook but NZD is expected to trade sideways from here, likely within a 0.6480/0.6600 range.

USD/JPY: Neutral (since 09 Oct 18, 113.10): USD has moved into a consolidation phase.

There is not much to add to yesterday’s (18 Oct, spot at 112.65) update. As highlighted, the 111.61 low registered on Monday (15 Oct) is likely a short-term bottom and USD has moved into a 111.80/113.30 consolidation range. Looking ahead, the risk of a break of the bottom of the range appears to be higher but even then, any decline has to contend with the rather strong support zone between 111.50 and 111.60.

UOB Research/Market Commentary
Oct 18 - 09:48 PM
GBP/USD - Close Below 1.3000 Would Be A Strong Negative
First appeared on eFXplus on Oct 18 - 07:35 PM
  • Shade firmer - closed -0.7%, leading USD strength, as Brexit impasse extends
  • Some Brexit optimism, but the major issues remain unresolved nL8N1WY1X5
  • Two day fall leaves momentum studies heading south, 5, 10 & 21 DMAs crest
  • Bearish setup would be confirmed by a close below 1.3002, 76.4% Oct bounce
  • 1.3131 London high then Wednesday's 1.3149 NY high first resistance
  • 1.3002 Fibo then 1.2975 242M strikes initial support

gbp oct 19 Click here

Thomson Reuters IFR Markets
Oct 18 - 08:36 PM
AUD/USD - Resilient Against The USD - China Data To Lead
First appeared on eFXplus on Oct 18 - 06:45 PM
  • Shade softer - closed -0.1%, but resilient against risk off USD strength
  • Soft close does leave a bearish key day reversal on Wednesday
  • There is no Aus data today, but a slew of Chinese releases will drive risk
  • Mixed momentum studies and 5, 10 & 21 DMAs coil - a neutral setup
  • 0.7150 794M strikes and 0.7151 London high are initial resistance
  • Earlier 0.7091 base then 0.7086, 61.8% of the October bounce first support

aud oct 19 Click here

Thomson Reuters IFR Markets
Oct 18 - 05:00 PM
GBP: Base Case Remains A 75% Probability Of Decent Brexit ; GBP To Remain Volatile - Danske
First appeared on eFXplus on Oct 18 - 03:45 PM

Danske Research discusses GBP outlook in light of of today's EU Summit.

"At the moment, it seems likely we will have to wait for the EU summit in December before a deal can be signed (and we cannot rule out that we have to wait until January). We are simply too far away from Brexit day for the politicians to make the necessary compromises.

Our base case remains a 'decent Brexit' (75% probability), where the UK leaves the EU on orderly terms. The real test for PM Theresa May is still when the withdrawal deal is put forward for a vote in the House of Commons, as there are enough hardliners to vote it down, unless PM Theresa May persuades Labour MPs to vote in favour. We expect that to be the case.

We assign 15% probability of a 'no deal Brexit' , as PM Theresa May is still under pressure from Brexit hardliners and the supporting party from Northern Ireland, the DUP. The likelihood of a general election or a call for a second referendum before 29 March is low. A soft Brexit keeping the UK in the single market also seems unlikely," Danske argues. 

"Brexit remains the key driver for GBP and uncertainty related to the outcome is likely to keep the GBP volatile and undervalued in the coming months. We still expect EUR/GBP to trade lower eventually, driven by Brexit clarifications and fundamental valuations. We target EUR/GBP at 0.84 in 3M and 0.83 in 6M and 12M," Danske adds. 

Danske Research/Market Commentary
Oct 18 - 03:48 PM
GBP/USD - Brexit Progress Stunted, Drops GBP/USD To 10-Day Low
First appeared on eFXplus on Oct 18 - 02:05 PM
  • GBP/USD falls to 10-day low 1.3025 as Brexit deal hopes fading
  • Pair eyes daily cloud top support by 1.3013, then 1.2922 Oct 4 low
  • Irish border backstop resolution elusive, May rejects EU proposals
  • Post-Brexit implementation extension talk gaining traction nB5N1U601X
  • EUR/GBP rises 0.34% to 0.8800, weak UK RS and Brexit overhang favors EUR

GBP Chart: Click here

Thomson Reuters IFR Markets
Oct 18 - 02:36 PM
EUR/USD - COMMENT-EUR/USD On Shaky Ground Over Hawkish Fed, Weak Yuan
First appeared on eFXplus on Oct 18 - 10:55 AM

Markets' hawkish view on the Fed minutes and fresh weakness in the Chinese yuan have increased immediate downside risks for EUR/USD, which may now be on track to test October's low. The Fed's suggestion that rates might rise above neutral helped push German-U.S.
yield spreads wider, hurting the EUR/USD.
Meanwhile, yuan weakness is pushing USD/CNH near its 2018 high, adding to the dollar's allure and weighing further on EUR/USD.
But there are also reasons for bears to temper their enthusiasm. The Fed minutes showed discussion among members about the potential downside risks from further dollar strength , suggesting that an extended rally in the greenback from here could alter the FOMC's tightening plans.
The fed funds futures market could also stymie bearish EUR/USD sentiment since it is not buying into the more hawkish minutes and is suggesting instead that hikes will halt toward the end of 2019.
They also indicate that the fed funds rate will just barely reach 3 percent by that time.
While the immediate EUR/USD risks might be bearish, longer-term they may be bullish.
This suggests EUR/USD's broad 1.1300/1.1850 range is unlikely to break for now.

chart: Click here

Thomson Reuters IFR Markets
Oct 18 - 01:24 PM
NZD/USD: M-Term Downside At Risk Only On A Daily Close Above 0.6310/30 - NAB
First appeared on eFXplus on Oct 18 - 11:30 AM

NAB discusses NZD/USD technical outlook and highlights a scope for a multi-days correction if the pair manage to register a daily close above 0.6610/30 over the coming days.

"2018 has produced an impulsive downtrend, confirmed by a series of lower highs / lower lows, trapped in a downtrend channel since late April.  2018 downtrend channel has support / resistance at 0.6300/25 and 0.6610/30. 

Multiple daily / weekly momentum indicators failed to make new lows with price in September and again in October, highlighting MT correction risk.  

A daily close above 0.6610/30 will target a likely test of 0.6800/50 and risk breaking the MT downtrend structure," NAB argues. 


NAB Research/Market Commentary
Oct 18 - 12:12 PM
USD/JPY - COMMENT-Rates Fear Reigns Over USD/JPY Recovery Hopes
First appeared on eFXplus on Oct 18 - 10:20 AM

The negative feedback loop developing between rising U.S. rates and falling financial assets is making USD/JPY rallies harder to sustain.
The latest rebound is a perfect example.
USD/JPY stopped at the 38.2 percent retracement of the 114.55-111.63 Oct 4-15 fall with today's 112.74 high on EBS as yesterday's hawkishly interpreted Fed minutes weighed on stocks.
Seasonally, USD/JPY looks well supported into December , though IMM specs are already heavily long.
Also, a breakout above today's high and nearby kijun and 21-DMA at 112.78/97 -- local offers noted into 113 -- will require risk aversion to at least diminish. One source of anxiety is the possibility of a Chinese economic slowdown, due to the trade war with the U.S., that compounds emerging markets weakness.
Chinese government spending surged in September nL3N1WY3PD as a bulwark against rising trade tariffs, but this hasn't stopped the rot in the Shanghai index or downward pressure on the yuan.
If China can't prevent a USD/CNY rise above the pivotal 7 level, derisking and JPY haven buying will accelerate.
The assumption, for now, is 7 will be defended to reduce capital flight risks.

Chart: Click here

Chart: Click here

Thomson Reuters IFR Markets
Oct 18 - 11:00 AM
GBP: Summit Day Likely A Bit Of 'Damp Squib': 2 Key Takeaways - MUFG
First appeared on eFXplus on Oct 18 - 08:58 AM

 MUFG Research discusses GBP outlook in light of of today's EU Summit.

"What had been billed as a crucial moment in the Brexit negotiation process may in fact turn out to be a bit of a damp squib. Rhetoric in recent days, including the statement from PM May, has lowered the anticipation of a deal being reached at today’s EU leaders’ summit. A dinner last night included an address by PM May but while it would appear a deal is close, there is currently little expectation of a breakthrough today," MUFG notes. 

MUFG sees two take-aways from this summit. 1- "Rreports are indicating that a November summit is now not being scheduled. While this is a negative sign we wouldn’t read too much into this. It is the pace of progress in negotiations that will dictate whether a gathering in November is warranted. If progress is made in the coming few weeks, a gathering could undoubtedly still be arranged," MUFG argues. 

2- "But secondly, and perhaps more importantly, there has been hints of an extension in the transition period from Dec 2020 to Dec 2021. This reflects the growing realisation that the timeframe for reaching a deal (and therefore not requiring the backstop) is unrealistic. This is an attempt to “de-dramatise” the backstop as it increases the prospect of it not being needed... It highlights the domestic political difficulties that still lie ahead and reinforces the short-term downside risks for the pound," MUFG adds

BTMU Research/Market Commentary
Oct 18 - 08:36 AM
GBP/USD - Maintains 1.31 Handle Despite UK Retail Sales Miss
First appeared on eFXplus on Oct 18 - 04:50 AM
  • Cable holds above 1.3100 despite worse than expected UK Sept retail sales
  • Down 0.8 pct vs -0.4 pct f/c, up 3.0 pct YY vs +3.6 pct f/c nL9N0FN02R
  • 1.3118 was pre-data release high vs 1.3076 early Europe low
  • Early Europe low was plumbed before UK PM May's latest Brexit comments
  • To overcome Brexit impasse, May open to extending transition nL8N1WY1X5

GBPUSD: Click here

Thomson Reuters IFR Markets
Oct 18 - 07:24 AM
EUR/USD - COMMENT-Weak Close This Month Could Open Big EUR/USD Downside
First appeared on eFXplus on Oct 18 - 04:35 AM

EUR/USD is lower after the hawkish minutes of the Fed's September monetary policy meeting and might close below several long-term techs, signalling a deeper decline.
The pressure from interest rate differentials weighing on EUR/USD has intensified, with yield spreads on U.S. and German bonds pushing the extremes for trends since the Fed began tightening.
Many traders have ignored the influence of rates markets, but they have been much more keen to follow tech signals.
There is a good chance that EUR/USD will close this month under 1.1557 -- below the 21/55-MMA and the monthly Ichimoku cloud.
After the last similar break, in 2014, EUR/USD dropped from around 1.3150 to 1.0450, so it is a signal that tech trades shouldn't ignore.
EUR/USD is the only pair where specs have been reluctant to bet on a higher dollar, so the follow-through could be significant IMM/FX.

EUR/USD monthly chart Click here

10-year U.S. German yield spread Click here

Thomson Reuters IFR Markets
Oct 18 - 06:12 AM
GBP/USD - Reclaims 1.31 Handle Ahead Of UK Retail Sales Data
First appeared on eFXplus on Oct 18 - 04:00 AM
  • Cable reclaims 1.31 handle pre-UK data as EUR/USD reclaims 1.15 handle
  • 1.3076 was one-week low for GBP/USD in early European trade
  • Cable could extend north if UK Sept retail sales data better than expected
  • Minus 0.4 pct MM and +3.6 pct YY forecast, data due 0830GMT
  • GBP fell on sub-f/c UK CPI Wednesday after rising on earnings beat Tuesday
  • UK open to longer Brexit transition but sees no need for it-May nL8N1WY1X5

GBPUSD: Click here

Thomson Reuters IFR Markets
Oct 18 - 05:00 AM
GBP/USD - Eases To One-Week As Brexit Stalemate Continues
First appeared on eFXplus on Oct 18 - 03:15 AM
  • Cable down to 1.3076 in early London trade as Brexit deadlock weighs on GBP
  • Provisional plans for one-off Brexit summit in Nov put on hold nL8N1WX5ZQ
  • 1.3076 = low since Oct 9 (1.3080 was Monday's low). 1.3085 was Asia low
  • 1.3100 (Wednesday's low) is now a resistance level, with 1.3149 beyond
  • 1.3149 = low before sub-f/c UK CPI Weds/rally high from 1.3100
  • UK ONS Sept retail sales data due 0830GMT, -0.4 pct MM and +3.6 pct YY f/c

UK retail sales: Click here

Thomson Reuters IFR Markets
Oct 18 - 03:48 AM
EUR/USD's Biggest Oct One-Day Drop Ends Under Cloud, Fibos: Ominous
First appeared on eFXplus on Oct 18 - 01:35 AM
  • Wed saw biggest one-day fall of Oct when EUR/USD closed down 72 pips on EBS
  • Registered close below cloud base at 1.1546 and 2 Fibos at 1.1528 and 1.1505
  • 1.1528/1.1505 Fibos: 50%/61.8% retraces of 1.1433 to 1.1622 recent recovery
  • This confirms bearish outlook, looking to fade recovery near to cloud base
  • Scope growing for further losses through the 1.1433 October low
  • Large upper candlestick shadow signals a top ,

EUR/USD Trader:

Daily Fibo Chart: Click here

Thomson Reuters IFR Markets
Oct 18 - 02:36 AM
AUD/USD - Holds Firm Despite Higher UST Yields
First appeared on eFXplus on Oct 17 - 11:10 PM
  • AUD/USD bounces after unemployment rate falls to 5.0%, lowest since 2012
  • Asian range has been 0.7105/37, last at 0.7134 with 10y UST yields up 3 BPs
  • Tech signals mixed, s/t MAs still biased higher but momentum studies turn
  • Support is at the 10 DMA at 0.7103, close below would be bearish
  • Resistance is at Wednesday's high and 21 DMA at 0.7160/61
  • Close above 21 DMA needed for another leg higher

AUD daily: Click here

Thomson Reuters IFR Markets
Oct 17 - 11:00 PM
AUD/USD - Spikes As Unemployment Falls To 5.0 Percent
First appeared on eFXplus on Oct 17 - 08:40 PM
  • Australia added 5.6k jobs in Sept, vs +15k forecast and +44k in August
  • Unemployment rate falls to 5.0%, vs 5.3% fcast and prior, lowest since 2012
  • AUD/USD spikes to 0.7130 on the report, trading at 0.7120 now
  • Resistance is found at the 21 DMA at 0.7161, close above bullish
  • A close below the 10 DMA at 0.7102 opens a move to the trend low at 0.7041
  • Full details: nS9N1VJ00N

AUD daily: Click here

Thomson Reuters IFR Markets
Oct 17 - 09:48 PM
EUR/USD - FOMC Led USD Bounce Adds To The Current Negatives
First appeared on eFXplus on Oct 17 - 07:20 PM
  • Flat after closing -0.6%, the Italian budget & FOMC led USD strength weighed
  • PM Conte firm on budget nL8N1WX6EX - ECBs Weidmann critical nF9N1U500N
  • No Brexit progress, despite a positive attitude also negative nL8N1WX5ZQ
  • Dip leaves momentum studies, 5, 10 & 21 DMAs gently edging lower
  • 1.1422, 76.4% Aug/Sep climb & 1.1624, 50% Sep/Oct fall pivotal levels
  • 1.1500 1.1BLN strikes a magnet in Asia if it's quiet - 1.1550 1.2BLN cap

eur oct 18 Click here

Thomson Reuters IFR Markets
Oct 17 - 08:36 PM
AUD/USD - Jobs Lead Event Risk After A Bearish Outside Day
First appeared on eFXplus on Oct 17 - 06:55 PM
  • Tight early - closed -0.5% on broad USD strength after the FOMC held course
  • Bearish outside day and potential key day reversal on a close below 0.7106
  • Weekly falling trend channel remains in place since May - 0.7243 top today
  • Mixed momentum studies and 5, 10 & 21 DMAs - positive setup now neutral
  • Close above 0.7160/78, 21 DMA and 50% Sep/Oct fall would be bullish
  • Jobs lead data expecting +15K - full polls Click here

aud oct 18 Click here

Thomson Reuters IFR Markets
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