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Dec 14 - 05:00 PM
EUR: A Significant Move Higher In EUR/USD Can Wait A Few More Months - SocGen
First appeared on eFXplus on Dec 14 - 12:45 PM

Societe Generale Research discusses discusses the EUR outlook in light of yesterday's ECB policy meeting.

"The end of the ECB's bond-buying programme is clearly an important point in the history of the eurozone and the euro, post-crisis. But bond buying was only one of the two key ingredients to Mario Draghi's magic policy sauce. The other was negative rates and the combination was what was so potent in crowding investors out of European bonds and out of the euro itself.

In trade-weighted terms, the euro is already well past its worst levels, but a significant move higher against the dollar can wait a few more months," SocGen argues. 

Société Générale Research/Market Commentary
Dec 14 - 03:48 PM
USD/JPY - Risk-Off Cross Selling Prompts USD/JPY Pullback
First appeared on eFXplus on Dec 14 - 01:40 PM
  • Yen, in NY, took over fm USD as top haven after poor China, EZ data
  • USD/JPY unable to make a new high for first time this week
  • Plenty of supply ahead of 114 and options market long gamma
  • Thur's low & Kijun @113.21-22 key to string of higher lows
  • US retail sales and IP bullish, but Markit PMI missed
  • Traction on US-China trade issues not helping risk right now
  • EUR/JPY diving away from Cloud cover on lousy EZ data
  • AUD/JPY sinks on poor China data after nearing 50% Fib above
  • GBP/JPY giving back about half of rebound from Monday's low

Chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 02:36 PM
AUD/USD - COMMENT-AUD/USD Bears Gain Traction But Fed Risk Looms
First appeared on eFXplus on Dec 14 - 11:55 AM

Bearish sentiment on AUD/USD is growing after disappointing Chinese data nB9N1Y5026 pushed the currency pair below 0.7165/70 support, leaving the Fed as the key event that can tip the balance toward accelerated losses or back to recovery. The yuan weakened to send USD/CNH, to which AUD/USD is highly inversely correlated, above 6.9100. Pushed-back RBA rate hike expectations helped AUD/USD slide as well.
National Australia Bank now sees the RBA's initial hike in H2 2020 instead of mid-2019.
Big upward revisions to October U.S. retail sales, significant upside surprises to the November retail control series and industrial production should temper AUD/USD bulls as gains in U.S. rates could bolster Fed confidence for future hikes.
AUD/USD bears do face risks though.
Fed funds futures price just over 30 bps of Fed hikes before end-2019 and net-long U.S. dollar positions remain elevated.
Should the Fed take a cautious view next week, U.S. yields and the greenback should stumble.
A scenario such as that could lead AUD/USD to erase the recent slide and test December's high.

chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 01:24 PM
USD: Fed Set To Hike Again But Removing More Forward Guidance - Danske
First appeared on eFXplus on Dec 14 - 11:30 AM

Danske Research discusses its expectations for next week's FOMC December policy meeting.

"We expect the Fed to raise rates again when the committee meets next week. This would bring the target range to 2.25-2.50%, i.e. the lower end of the broad range of the estimates of the neutral rate according to the September dots (2.5-3.0%, with most saying 3.0%). While we think the Fed’s base case remains that the gradual hiking cycle will continue a bit further, the Fed will probably remove more of its forward guidance to increase its flexibility (as it did in June), as risks to the rate outlook become more two-sided with the Fed funds rate in the broad neutral range.

Do not be surprised if the Fed removes that it ‘expects further gradual increases in the target range’ from the statement. It makes sense to get rid of the one-sided rate outlook, as monetary policy becomes more neutral," Danske projects. 

"We think the Fed will continue to signal three hikes next year but see risks that the 2020 and 2021 dots are lowered. The longer-run dot is likely to be unchanged at 3.00%," Danske adds. 

Danske Research/Market Commentary
Dec 14 - 12:12 PM
EUR/USD - COMMENT-EUR/USD Faces Bearish Risks Ahead Of The Fed
First appeared on eFXplus on Dec 14 - 09:55 AM

Dour data is adding to EUR/USD's post-ECB losses and could persist ahead of next week's Fed meeting.
Downside surprises to euro zone December PMIs, especially Germany and France, combined with downwardly revised Italian November CPI add to downside risks Draghi highlighted.
The heightened downside risks have led some investors to push back expected ECB hikes.
Euribor futures now suggest no hike until late 2019 and that helps weigh EUR/USD down.
The upside surprise to core U.S. November retail sales and a big upward revision to November's headline retail sales has boosted the dollar as yields on U.S. Treasuries and fed funds futures rise.
The sales data could help bolster Fed confidence to proceed with projected rate hikes.
Brexit remains a bear risk for EUR/USD also as U.K. PM May's trip to Brussels yielded few positive results.
EUR/USD bears are emboldened now and are targeting 2018's low.
However, should the Fed strike a cautious tone next week, some downside pressure for EUR/USD will erode and bears will run for cover.

chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 11:00 AM
EUR/USD: In A Narrow Range But Next Week's FOMC Could Be A Game-Changer - MUFG
First appeared on eFXplus on Dec 14 - 08:53 AM

MUFG Research discusses EUR/USD outlook and adopts a neutral bias but flags next week's FOMC as a possible trigger for reversing USD strength through next year.

"The euro is continuing to stabilize at lower levels against the US dollar. A narrow trading range between the 1.1200 and 1.1500-levels remains in place for now. The ECB’s latest policy meeting proved largely uneventful for the euro. The ECB was more cautious on the growth outlook but it was largely as expected as market participants have already pushed back the timing of the first expected ECB rate hike into 2020," MUFG notes. 

"The main focus in the week ahead for the US dollar will be the upcoming FOMC meeting. If the Fed pare back plans for further rate hikes in 2019 and open the door to rate pause as early as in March, it could encourage a weaker US dollar," MUFG adds. 

BTMU Research/Market Commentary
Dec 14 - 09:48 AM
First appeared on eFXplus on Dec 13 - 10:07 PM

EUR/USD: Neutral (since 21 Aug 18, 1.1485): Dip below 1.1300 would not be surprising but break of 1.1265 seems unlikely. No change in view.

EUR recovered and the bottom of our expected 1.1300/1.1440 consolidation range at 1.1300 remains unchallenged (low of 1.1311). Despite the recovery, the underlying tone remains soft and we continue to see chance for EUR to dip below 1.1300. However, as highlighted yesterday, a break of the next support at 1.1265 seems unlikely.

GBP/USD: Neutral (since 21 Aug 18, spot at 1.2795): Downward momentum has waned, GBP is likely to consolidate for now.

There is not much to add to yesterday’s (13 Dec) update. As highlighted, while the recent downward momentum has waned, it is too early to expect a sustained recovery. GBP is more likely to consolidate and trade sideways for the next couple of weeks, likely within a broad 1.2480/1.2800 range.

AUD/USD: Neutral (since 13 Sep 18, spot at 0.7170): AUD is still under pressure but a break of 0.7130 would come as a surprise.

While AUD closed higher for the third day in a row (albeit marginally by +0.05%), only a move above the 0.7270 ‘key resistance’ (no change in level) would indicate that the current downward pressure has eased. Until then, the downside bias is still intact even though lackluster momentum indicates that a break of the major 0.7130 support is unlikely.

NZD/USD: Neutral (since 07 Dec 18, 0.6880): NZD has moved into a consolidation phase. No change in view.

NZD dipped briefly to 0.6825 yesterday, not far from the bottom of our expected 0.6820/0.6930 consolidation range. The quick rebound from the low reinforces our current view wherein NZD is trading in a consolidation phase for now (same view since last Friday, 07 Dec). Looking further ahead, the weakened underlying tone suggest higher risk of a clear break below 0.6820 but for the next one week or so, we do not expect the late-November low near 0.6755 to come into the picture.

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

USD touched 113.70 yesterday before ending the day on a firm note (NY close of 113.62, +0.62%). While the underlying tone has improved, we still view the current movement as part of a consolidation phase between 112.40 and 113.90 (same view since Tuesday, 11 Dec). From here, an intraday move above 113.90 is not ruled out but based on the lackluster momentum, we do not expect last month’s 114.20 peak to come under threat.

UOB Research/Market Commentary
Dec 14 - 07:24 AM
EUR/USD - COMMENT-EUR/USD Close Below 200-WMA Would Put Major Fibo Into Play
First appeared on eFXplus on Dec 14 - 06:00 AM

The weekly trend is bearish, but the market is struggling to make headway below the 200-WMA, currently 1.1312, EBS data.
Failure to close below that since November 2017 has stalled the bear run; a close below today could open the downside again.
Medium-term action highlights market reluctance to push EUR/USD too far from the 200-WMA but monthly activity is less euro-friendly.
There is doji candle indecision here, too.
November's long wicked doji star was recorded following September and October's 3.5 percent decline from 1.1815, but the weight from a thick monthly cloud prevents rebounds.
Cloud base is at 1.2222 and the top at 1.3696.
A bear target can be drawn off the retracement of the January 2017 1.0340 low to February 2018 1.2556 high.
The 50 percent line was breached in August and current weakness brings 61.8 percent Fibonacci into play at 1.1187.
The bear view is negated only by a close on the week above 1.1420 10-WMA and it will take a climb above 1.22 to bring a longer-term reversal.

EUR/USD Monthly Ichimoku Chart: Click here

EUR/USD Weekly Chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 06:12 AM
USD/JPY - Japanese Asset Managers, Model Funds Demand USD/JPY
First appeared on eFXplus on Dec 14 - 04:10 AM
  • Decent asset manager demand and positive flows from model into USD/JPY
  • USD/JPY scope grows for recent peaks while above the 30-DMA nL1N1YJ06U
  • Friday's range has been a narrow 113.42-113.65, according to EBS prices
  • Large 113.75 NY cut expiry worth 1.4B could attract later this session
  • Net USD/JPY sales since the start of this week almost squared up
  • Dollar bulls find support ahead of key Fibo after setback nL1N1YI0GO

EBS Flow Data Chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 05:00 AM
EUR/USD - Upper Candle Shadows Hint At An Upside Rejection
First appeared on eFXplus on Dec 14 - 03:20 AM
  • Leaving large upper shadows, reinforcing the underlying bearish market
  • Bull setback since spot broke but failed to close above 1.1424 Fibo
  • The 1.1424 Fibo, a 76.4 percent of the 1.1216 to 1.1472 recent (EBS) fall
  • Bias for a near-term test of the recent 1.1306 matching lows
  • EUR/USD gains likely to encounter headwind at daily cloud nL1N1YI07D
  • Daily cloud, which currently spans the 1.1432-1.1559 region, should weigh

EUR/USD Trader:

Daily Ichimoku Chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 03:48 AM
USD/JPY - Scope Grows For Recent Peaks While Above The 30-DMA
First appeared on eFXplus on Dec 14 - 02:35 AM
  • Bulls grappling with the 113.61 Fibonacci level after staying above 30-DMA
  • The 30-DMA is now at 113.33. 113.61 Fibo is a 76.4% of 114.03 to 112.23 drop
  • Daily close above 113.61 Fibo needed to accelerate above Nov 28 114.03 high
  • A break above the 114.03 will unmask the overall Nov 114.21 peak for a test
  • However, a daily close back below 30-DMA will weaken the market structure
  • USD/JPY bulls gear up for next leg higher through key Fibo nL1N1YH099

USD/JPY Trader:

Daily Fibo Chart: Click here

Thomson Reuters IFR Markets
Dec 14 - 02:36 AM
AUD/USD - Weighed Down By Numerous Factors
First appeared on eFXplus on Dec 13 - 10:50 PM
  • AUD/USD 0.5% lower as a number of factors weigh in Asia
  • Soft China data, lower stocks and RBNZ proposing higher bank capital all -ve
  • Touched a low of 0.7179 after early high of 0.7228, last 0.7190
  • Strong support at 0.7163/70 with 61.8 Fibo and Monday low there
  • Needs to close above the 10 & 21 DMAs at 0.7243/57 to turn outlook bullish
  • Momentum studies mixed, but 5 day MA crosses lower in bearish sign

AUD daily: Click here

Thomson Reuters IFR Markets
Dec 14 - 01:24 AM
EUR: In Range N-Term ECB puts A Lid On EUR Strength & Floor Under It As Well - Dansek
First appeared on eFXplus on Dec 13 - 04:45 PM

Danske Research discusses EUR outlook in light of today's ECB policy decision.

"The FX market saw little reaction on the confirmation to end the APP and the introduction of the so-called ‘enhanced’ forward guidance. However, EUR slid initially during the press conference on soft comments from Draghi on the balance of risks. Crucial for the EUR is the fact that forward guidance on rates remained time-dependent which means that rate hikes are not imminent; this, on the one hand, puts a lid on EUR strength near term.

However, the fact that reinvestments were linked to the first rate hike is a key hint that the next move from the ECB is higher policy rates which is in itself a hawkish signal and a key cue to the FX market that we are now exiting ‘crisis mode’ in the eurozone; this, on the other hand, puts a floor under EUR.

On the whole, today’s ECB messages do not change our view that EUR/USD is a range around 1.13 on 0-3M horizon with potential for a clear rebound mid 2019 into the 1.20s," Danske argues. 

Danske Research/Market Commentary
Dec 14 - 12:12 AM
GBP/USD - Offered, As May Returns Empty-Handed From Europe
First appeared on eFXplus on Dec 13 - 10:35 PM
  • -0.2% in Asia - only occasional flurries - at the base of a 1.2622-65 range
  • EU failed to give May enough to sell her deal to parliament nL8N1YI1OE
  • Lack of any real deal progress will likely be strong GBP negative in London
  • Despite the recent bounce, daily & weekly 5, 10 & 21 DMAs head south
  • A bearish trending setup - close above 1.2667 10 DMA would undermine
  • 1.2613 NY low, then this week's 1.2477 base are initial supports

Thomson Reuters IFR Markets
Dec 13 - 11:00 PM
NZD/USD - Hit Hard On RBNZ Bank Capital Proposal
First appeared on eFXplus on Dec 13 - 08:45 PM
  • NZD/USD down 0.7% to a low of 0.6803 on RBNZ news
  • RBNZ proposes almost doubling bank capital requirements nL3N1YJ038
  • Support not until 0.6754/61, late Nov lows and 38.2 Fibo of Oct/Dec rally
  • S/T MAs and momentum studies turning down, a bearish signal
  • Falling equities during the Asian session also weighing on AUD & NZD

NZD daily: Click here

Thomson Reuters IFR Markets
Dec 13 - 09:48 PM
AUD/USD - Weighed Down By Falling Equities
First appeared on eFXplus on Dec 13 - 08:10 PM
  • AUD/USD down 0.2% to a low of 0.7206 as Asian equities drop
  • Nikkei leads the market drop, down 1.2% after 2 strong up days this week
  • Initial support for AUD/USd seen at recent lows around 72 cents
  • Stronger support at 0.7163/70, Mon low and 61.8 Fibo of Oct-Dec rally
  • Momentum studies mixed, but s/t MAs crossed lower weighing on price
  • A close above 10, 21 DMAs at 0.7245/58 needed to turn outlook bullish

AUD daily: Click here

Thomson Reuters IFR Markets
Dec 13 - 08:36 PM
GBP/USD - Brexit Impasse At This Stage, Bias Still Lower
First appeared on eFXplus on Dec 13 - 06:35 PM
  • Tight early - opened +0.3%, holding the relief rally gains on May's vote win
  • May is hoping for EU help to get her deal "over the line" nL8N1YI1OE
  • EU's offers backstop assurances, but no renegotiation - impasse nB5N1XI01B
  • Despite the recent bounce, daily & weekly 5, 10 & 21 DMAs head south
  • A bearish trending setup - close above 1.2670 10 DMA would undermine
  • NY 1.2613 low & London 1.2687 high are initial support/resistance

gbp dec 14 Click here

Thomson Reuters IFR Markets
Dec 13 - 05:00 PM
USD: A Dovish Hike Likely At Next Week's FOMC But Market To React More To A Hawkish Message - SEB
First appeared on eFXplus on Dec 13 - 03:30 PM

SEB Research discusses its expectations for next week's FOMC December policy meeting. 

"The Fed will raise the target range for the federal funds rate to 2.25 to 2.50 per cent at its next meeting on December 18-19. Neither the sell-off in equity markets nor President Trump’s criticism will make the bank reconsider its decision to hike rates this month, especially given the continued strong performance of the US economy and inflation close to target. The Fed is adopting a more flexible monetary policy, making it harder to forecast how many times it will increase rates in 2019, and when it will do so. Currently, we predict two rate hikes, in March and June, but accept there are many factors that may cause the bank to act at a different time," SEB projects. 

"If the reference to a “further gradual increase” is dropped from the statement, as we predict, or the Fed changes its median forecast from three to two hikes in 2019, we should expect a slight decline in yields. However, financial markets are likely to be more sensitive to a hawkish message," SEB adds. 

SEB Research/Market Commentary
Dec 13 - 03:48 PM
GBP/USD - Steady Post PM Vote Amid Lingering Brexit Fears
First appeared on eFXplus on Dec 13 - 01:45 PM
  • GBP/USD holding on to post confidence vote gains, +0.25% at 1.2655
  • Early USD strength evaporates into close, DXY flat on day
  • Brexit fear limits GBP gains, deal vote exp'd in new year nL9N1X9019
  • May expects no quick Brexit breakthrough as she seeks EU help nL8N1YI1OE
  • EUR/GBP down 0.19% to 0.8985 on cautious ECB; Thurs range 0.9014-0.8953

GBP Chart: Click here

Thomson Reuters IFR Markets
Dec 13 - 02:36 PM
GBP/USD - Set For Smallest Intra-Day Range This Month
First appeared on eFXplus on Dec 13 - 12:00 PM
  • Cable elicited support ahead of 1.2610 after extending south from 1.2682
  • 1.2610 was Asia low. 1.2682 was early NY high, pre-US data/Draghi
  • 1.2682 = five pips shy of European am three-day high nL1N1YI07R
  • 77 pip intra-day range follows big 195/158/251 pip ranges Weds/Tues/Mon
  • Smallest intra-day range this month before today was 81 pips last Friday
  • EUR/GBP slid to intra-week low of 0.8953 on dovish Draghi nL8N1YI4WL

GBPUSD: Click here

Thomson Reuters IFR Markets
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