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By eFXdata  —  Jan 21 - 09:00 AM

Credit Suisse discusses GBP/USD technical outlook and flags a scope for a move towards 1.40 in the near-term.

"With a major base in place above 1.3514 we continue to look for a clear break above 1.3720 to mark the completion of a bullish “ascending triangle” pattern for a resumption of the core bull trend. We would then see resistance next at 1.3804 ahead of 1.3997/1.4000 and then our first main objective at 1.4302/77 – the high of 2018 itself and the 50% retracement of the 2014/2020 bear trend," CS notes. 

"Support moves to 1.3652 initially, wit 1.3624/22 now ideally holding to keep the immediate risk higher. Below here can ease the immediate upside bias for a fall back to 1.3520, potentially the lower level of the high -level range, seen starting at 1.3470," CS adds. 

Credit Suisse Research/Market Commentary
By Martin Miller  —  Jan 21 - 06:56 AM
  • EUR/USD 0.33%, USD/JPY -0.12%, GBP/USD 0.51%, AUD/USD 0.35%

  • S&P E-minis 0.21%, DAX 0.47%, Nikkei 0.82%, FTSE 0.15%

  • Growing will to gamble will fuel bigger EUR/USD rise nL1N2JW0I6

  • Dollar weakness could be about to get worse against the yen nL1N2JW0RB

  • GBP/USD holds above 1.3700 after scaling 32-month peak nL1N2JW0XK

  • AUD/USD buoyed by risk appetite rise and Aussie jobs data nL1N2JW0SG

  • NY Cut Expiries . U.S. Open nL4N2JW2UX

Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Jan 21 - 05:52 AM

FX options reflected the recent lack of volatility and direction in EUR/USD, with their premiums testing crisis lows and lacking any near-term directional premium nL1N2JV1F8, but that's starting to change and may embolden bulls.

Implied volatility is meeting some mild demand across all maturities - benchmark one-month expiry paid 6.1 Thursday from 5.95 Wednesday, and one-year 6.275 from 6.15.

Risk-reversal contracts charge a volatility premium for option strikes in whichever direction they feel is most vulnerable in the FX rate.
EUR call premium (topside strikes) came lower over recent weeks, with one-month expiry even flipping in favour of EUR puts (downside strikes) last week.
However, that one-month risk reversal has now regained a small EUR call/USD put premium.

Outright demand for EUR call options is also more apparent Thursday - options that would allow holders to buy EUR/USD at higher levels if spot were above the chosen strikes.
They should also benefit from any further pick-up in implied volatility.

From current levels, the risk-versus-reward factor for long EUR/USD options seems reasonable nL1N2JW0OA.
Related comment nL1N2JW0II

For more click on FXBUZ

EUR/USD 1-month and 1-year implied volatility Click here

EUR/USD 1-3-12-month expiry option risk reversals - Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Jan 21 - 05:32 AM
  • AUD/USD eyes 0.7777 as risk-sensitive AUD benefits from risk appetite rise

  • 0.7777 = intra-week high in Asia. European stocks rise nL4N2JW2AT

  • Australian December employment +50k, matching forecast nL4N2JV43X

  • Mooted offers above 0.7800 are an appreciation obstacle beyond 0.7777

  • 0.7805 was Jan 14 high. 0.7819 was 34-month high earlier this month (Jan 6)

  • Iron ore rebounds as Australia braces for potential cyclone nL1N2JW0F2

AUDUSD Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Jan 21 - 04:11 AM
  • Cable hits 1.3738 after breaking above 1.3720 (Wednesday's high)

  • 1.3738 is the highest level since May 2018 (1.3773 was the high that month)

  • GBP rise aided by global equity gains and lower risk of sub-zero BoE rates

  • UK's speedy rollout of COVID-19 vaccines is also positive for the pound

  • Britain has given 4.6 million people a first dose of a COVID-19 vaccine

  • See: nL8N2JV5C2. 1.3700 (former resistance level) is now a support point

GBPUSD Click here

Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Jan 21 - 02:45 AM
  • Risk rally continues with stocks and commodities booming nL1N2JU0H9

  • FX has lagged these moves but rising risk appetite still clear

  • EUR/USD longs are FX traders' favourite trade

  • Relatively safe, super tight spreads, rapid execution, huge liquidity

  • If traders want to gamble then EUR/USD will draw traders

  • Most traders are bullish and have been prepared to add at high levels

  • Recent elevated consolidation over 1.20 is a bullish sign. 1.25-1.26 likely

  • ECB set to hold, and that's a problem nL1N2JV0J5

EURUSD targets Click here

Refinitiv IFR Research/Market Commentary
By Peter Stoneham  —  Jan 21 - 02:22 AM
  • Set for fourth consecutive bull session but air above 1.37 proving too thin

  • Sterling remains a buy on dips for targets above 1.40; trend holding

  • 14-day momentum readings disappointing but RSI is confirming price gains

  • Close above 1.3700 sees our 1.3540 bid raised into the 1.36s

  • 10DMA, 1.3625, likely key support for Thursday

  • Major prop and tipping point 1.3522 Jan 18 hammer low

    For more click on FXBUZ

GBP/USD Trader:

GBP/USD daily candle chart: Click here

Refinitiv IFR Research/Market Commentary
By Rob Howard  —  Jan 21 - 02:10 AM
  • Cable rises to 1.3710 as risk-sensitive GBP benefits from equity gains

  • Asian stocks climb after record high closes on Wall Street Wednesday

  • See: nL1N2JW0EE. 1.3710 = 10 pips shy of Wednesday's 32-month high

  • Wednesday's peak was fourth daily high above 1.3700 since 2021 began

  • GBP buoyed by lower risk of sub-zero BoE rates and speedy UK vaccine rollout

  • Retreat from 1.3720 based just shy of 1.3621, 50% of 1.3522-1.3720

GBPUSD Click here

Refinitiv IFR Research/Market Commentary
By Krishna K  —  Jan 21 - 12:44 AM
  • AUD/USD rallies 0.3% in Asia as risk sentiment remains elevated

  • Boosted by hopes of more U.S. fiscal stimulus as Biden sworn in nL1N2JV28C

  • E-Mini rallies 0.35% to record high in Asia, ASX 200 closes at 11-month high

  • Copper +0.4%, Dalian iron ore+0.7% as Australia braces for potential cyclone

  • AU jobless rate falls as employment nears pre-pandemic highsnL4N2JV43X

  • Resistance 0.7780-85, 0.7800-05, 0.7820; support 0.7745-50, 0.7720, 0.7700

  • For more click on FXBUZ

Major iron ore exporters' monthly shipments: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jan 20 - 04:30 PM

Credit Agricole CIB Research discusses its expectations for tomorrow's ECB policy meeting.

"For the first time since becoming President of the ECB, Christine Lagarde can enter the press conference room with nothing to say. It does not mean that the situation is perfect, under control or even improving, only that after the December 2020 decision, the ECB can sit on its hands until at least the middle of this year, and more likely until the end of this year," CACIB notes. 

"The ECB could use this press conference to fine-tune its messages about fiscal policy, its support for the Eurozone economy and its commitment to meeting its aim. It could even use this meeting to restart its discussion about the Strategic Review. But we doubt that we will learn anything about its monetary policy outlook," CACIB adds. 

Crédit Agricole Research/Market Commentary
By John Noonan  —  Jan 20 - 09:55 PM
  • AUD/USD opened 0.82% higher at 0.7747 and is building on those gains

  • Risk assets buoyant with AXJ iindex up 0.55% and E-minis up 0.20%

  • AUD/USD was 0.7750/55 when Aus jobs data came in close to expectations nAZN0QVO00

  • There wasn't any reaction at first, but the solid numbers helped sentiment

  • AUD/USD is trading at the session high at 0.7775 heading into the afternoon

  • Support is at the 10-day MA at 0.7734 and a break would ease upward pressure

  • Resistance is at 0.7805/20 where sellers are tipped

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Jan 20 - 09:53 PM
  • +0.1% with the USD under pressure on resilient risk appetite in Asia

  • Trades at the top of a 1.3656-1.3684 range with plenty if interest

  • 'No evidence of decline' in current English COVID-19 rates nL8N2JV5CJ

  • Recent GBP strength based on a cocktail of changing factors nL1N2JW01U

  • Charts; 1.3718/20 key resistance - upper 21 day Bolli band and Wed's high

  • 1.3718 upper 21 day Bolli band good indicator of an overbought market

  • Daily momentum studies flat line, 5, 10 & 21 daily moving averages conflict

  • Neutral setup does not suggest a trending move is close

    For more click on FXBUZ

gbp 2 jan 21 Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Jan 20 - 08:42 PM

Sterling hit a fresh 1.3720 trend high and EUR/GBP a 0.8838 trend low in Europe on Wednesday, with moves driven by all three components, leaving the pound at interesting levels as the news flow evolves.

Weakness in the dollar as risk appetite surged on U.S. stimulus expectations under a new administration supports GBP/USD nL1N2JV28C. Broad-based euro weakness is weighing on EUR/GBP as the euro zone struggles in the fight between the vaccine rollout and the spreading coronavirus nL8N2JV49M.

In the UK, there is finally some optimism on the outlook, after a COVID-19 policy that has lacked coherence, resulting in a record death rate nL9N2IC01T.
The vaccine rollout is working well, with over 4.6 million doses given so far, nL8N2JV5C2, while Oxford scientists are preparing vaccine versions to combat emerging virus variants nL1N2JV2XG.

Friday's UK GDP nL8N2JQ14H and higher inflation data on Wednesday nL8N2JU4UL suggest negative rates are unlikely, fuelling positive sterling sentiment, while Bank of England policymakers are signalling a strong rebound in the economy as the vaccines steadily gain traction on the coronavirus nL8N2JV59G.

Technically 5, 10 and 21 daily moving averages for GBP/USD are neutral, but in EUR/GBP they trend south.
A close below 0.8840 would be a strong negative signal, while a move back above 0.8900 would leave a resilient base in place.

For more click on FXBUZ

eug jan 21 Click here

Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Jan 20 - 06:29 PM
  • +0.1% after closing up 0.2%, after a 1.3720 trend high and EUR/GBP off 0.3%

  • COVID-19 vaccine rollout is moving quickly 4.6 mln doses so far nL8N2JV5C2

  • Record daily deaths to extend, but vaccines do provide hope nL9N2IC01T

  • Charts; Soft close after the 1.3720 trend high - range trading still valid

  • 1.3719/20 key resistance - upper 21 day Bollinger band and Wednesday's high

  • Daily momentum studies flat line, 5, 10 & 21 daily moving averages conflict

  • Neutral setup within the January range - breakout will likely be USD led

  • NY 1.3623 low and London 1.3720 high initial support-resistance

For more click on FXBUZ

gbp jan 21 Click here

Refinitiv IFR Research/Market Commentary
By John Noonan  —  Jan 20 - 05:58 PM
  • EUR/USD opens 0.19% lower after EUR fell against the other major currencies

  • EUR/USD couldn't make ground despite the move up in risk assets nL1N2JV32K

  • Key support for EUR/USD is at the 55-day MA at 1.2073

  • Resistance comes in at the descending 10-day MA which is at 1.2138 today

  • A break below the 55-day MA targets the 50% of 1.1602/1.2349 move at 1.1975

  • For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jan 20 - 03:00 PM

Citi discusses the USD outlook and maintains a bearish bias over the medium-term.

"The latest CitiFX Flows & Positioning highlights that with the move in US yields, short term USD positioning is now in long territory. The recent dollar buying has been concentrated amongst leveraged investors, with only slight inflows from real money. With overall USD positioning slightly long, and with our expectation that real yields begin to move lower again, we continue to like USD shorts," Citi notes.

"We remain bearish USD, and expect the downtrend to resume as US real yields top out. Continued Fed dovishness remains important for our view, in addition to global recovery, so we’ll watch upcoming Fed-speak closely," Citi adds. 

Citi Research/Market Commentary
By John Noonan  —  Jan 20 - 05:11 PM
  • AUD/USD opens 0.82% higher at 0.7747 after AUD outperformed against majors

  • Risk assets uniformly higher on stimulus hopes as Biden sworn in as US President nL1N2JV2UNnL1N2JV0O0

  • AUD/USD closes above 10-day MA (.7733) to reestablish upward momentum

  • Resistance and sellers are tipped between 0.7805/20

  • Aus employment data today and an upside surprise could spark more gains

  • Market expecting +50 K jobs and unemployment to ease to 6.7% from 6.8%

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Jan 20 - 02:29 PM

The dollar rose against the euro but was mixed otherwise as risk markets rallied on U.S. Inauguration Day on expectations that the new administration would usher in more fiscal relief for the coronavirus-stricken economy.

A follow-on study showing the Pfizer and BioNTech COVID vaccine is likely to protect against the new more infectious virus variants nL1N2JV0Q3 injected some optimism into the pandemic containment outlook.

stocks hit record highs as Joe Biden was sworn in as president, a day after his Treasury Secretary nominee, Janet Yellen, made the case to lawmakers to be ambitious with further fiscal stimulus nL1N2JU1MJ.

Any additional spending would combine with Fed Chair Jerome Powell's intention to keep funding costs low for the foreseeable future, even if inflation rises nU5N2EU027.

EUR/USD fell back after running into sellers by the falling 10-day moving average nL1N2JV1HM and Friday's pivotal high.
But prices remain above the 55-DMA that caught the current correction low scored Monday, last at 1.2066.

Sterling once again succumbed to selling pressure after a brief foray and marginal new 2-1/2-year trend high beyond 1.3700.

The UK's quicker start than the EU on vaccine approval and distribution and sterling's positive correlation to global risk gauges such as the S&P 500 has limited cable pullbacks and attracted buyers at successively higher levels, first near the 55-DMA in December, and nearer to the 30-DMA since then, last at 1.3531.

But Wednesday's sharp intraday retreat, along with the EUR/USD's losses, came despite surging stocks and other risk-on flows into high-beta currencies, a pending correlation shift that bares watching.

USD/JPY broke down out of inside day and week bases ahead of the London close, piercing key support at 103.50.
The pair reverted to its negative correlation to rising S&Ps as demand for the haven dollar fell faster than for the haven yen.

USD/JPY was subdued by further slippage in 10-year TIPS yields.
And ahead of Thursday's BOJ meeting.

A USD/JPY close below the 50% Fibo of January's rebound at 103.50 would suggest that the pandemic downtrend from late March remains alive and well nL1N2JV1PW.

High-beta and commodity-linked currencies gained ground, with USD/CAD eking out a new nearly three-year low after the BOC meeting, even with policy on hold nL1N2JV1HE.

Neither the BOJ nor the ECB meeting on Thursday is expected to break fresh policy ground, even as both look for ways to improve yield control programs in subsequent meetings.
Weekly jobless claims will also draw attention after last week's disturbing 181k increase to 965,000 and 199,000 surge in continuing claims to 5.271 mln nL1N2JO2R6.

For more click on FXBUZ

Refinitiv IFR Research/Market Commentary
By Christopher Romano  —  Jan 20 - 02:15 PM
  • Rally off the Jan 18 low runs into sellers after 10-DMA briefly pierced

  • EUR/USD turns -ve on the ensuing slide, daily RSI diverges on the high

  • The falling monthly RSI implies bearish momentum is growing

  • January's inverted hammer candle reinforces bear sentiment

  • Break of key support in 1.2140/65 zone needed to give bears more control

  • 55-DMA, 38.2% Fib 1.1602-1.2349, daily cloud top, Dec 2 low sit there

  • Break of that support should trigger stop, puts 1.1910/30 in play

  • For more click on FXBUZ

eur/usd Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jan 20 - 01:30 PM

MUFG Research flags a doubt on its call for a rate cut by the BoE at its Feb-4 policy meeting.

"Further progress in vaccinations (a pick up in the daily rate) by the time the BoE MPC meeting takes place on 4th February may prove enough to hold off on any additional monetary easing. Certainly, the OIS market at the moment is not expecting action and that will help provide additional support for GBP," MUFG notes. 

"We had expected to have witnessed greater evidence of gridlock on trade across the border with the EU at this stage, and while there have been reports the evidence to date suggests it is not on enough of a macro-scale to warrant concern right now. So a rate cut as we had expected on 4th February is looking less likely now," MUFG adds. 

MUFG Research/Market Commentary
By Christopher Romano  —  Jan 20 - 11:55 AM
  • Rally sellers emerged on Jan 19 & an daily inverted hammer formed

  • That bear signals gets negated today after Tuesday's high breaks

  • Piercing of 10-DMA & rising daily, monthly RSIs are concerns for shorts

  • Break of 0.7640/45 support, 23.6% Fib of 0.6690-0.7819 gives bears control

  • Bulls gain more traction above 0.7815/20, 0.7890/00 is then targeted

  • For more click on FXBUZ

aud/usd Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jan 20 - 10:37 AM

CIBC Research discusses its reaction to today's BoC January policy decision.

"Vaccines are riding to the rescue of the Bank of Canada’s economic outlook. But with the pandemic still raging for now, the Canadian dollar perhaps looking at bit too strong and inflation too low for its liking, the Bank of Canada underscored that it will be very patient in deciding when to take its foot off the gas. To not much surprise, the overnight rate was left at 25 bps, and for now, the BoC will maintain its pledge to buy $4 bn or more in bonds per week," CIBC notes. 

"The forecast looks for a GDP drop in Q1, but tied to optimism on vaccines, has lifted growth for the next 2 years to 4% in 2021, and nearly 5% in 2022, only a touch below CIBC’s projection but a big upgrade to the Bank’s ’22 outlook. We expect the Bank to further taper its bond buying program in April to avoid owning too much of the outstanding market, but rate hikes aren’t in the cards until 2023 (that’s the first year for sustained 2% inflation) and particularly, likely not until the Fed has moved first to avoid pushing the loonie still stronger," CIBC adds. 

CIBC Research/Market Commentary
By Paul Spirgel  —  Jan 20 - 10:39 AM

Sterling retreated from the 2-1/2-month high of 1.3720 it hit in the wake of unexpectedly strong UK inflation data earlier on Wednesday nL8N2JU4UL, with pound bulls remaining emboldened despite the familiar pullback from its latest peak.

GBP/USD fell back to 1.3670 in early U.S. trade from the peak of 1.3720 it hit in European trade.

GBP bulls remain emboldened by reduced anxiety over UK negative rates.
ugh short sterling futures 0#FSS: still factor in sub-zero rates in mid-2021, BOEWATCH on Eikon indicates the BoE will keep rates steady at its Feb 4 meeting.

Additionally, COVID lockdown-related growth fears are being shrugged off as the UK vaccine program progresses.

Despite recent GBP/USD strength, the pound has failed above 1.37 in four of 13 trading session in 2021.
GBP/USD remains caught between the rising upper 30-day Bolli currently at 1.3759 and 30-DMA by 1.3531.

A break above Wednesday's high at 1.3720 and upper 30-day Bolli resistance at 1.3759 would put the May 4 2018 high at 1.3792 and other early 2018 highs up to 1.4377 in sharper focus.

However, should bearish UK growth or dour COVID developments re-emerge sterling bulls may quickly unwind recent longs 1096742NNET, leading sterling to retrace some of its 6.75% gains from Nov. 2 lows by 1.2852.
For more click on FXBUZ

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
By eFXdata  —  Jan 20 - 08:50 AM

CIBC Research discusses its reaction to today's Canada CPI print for the month of December.

"Canadian inflation unexpectedly dipped in December. The consumer price index fell 0.2% NSA MoM, leaving the annual rate of inflation running at 0.7%," CIBC notes. 

"While the effect of that category boosting CPI will likely be even more pronounced in January, it should reverse much of those gains in February and March. Even if, as we expect, inflation accelerates further from here to eclipse the Bank of Canada's 2% target in the months to come, it will be driven by these temporary and volatile factors, including gasoline prices, temporary methodologies and base effects. As a result, the Bank of Canada will continue focusing on supporting the recovery until slack has been absorbed such that inflation is sustainably running at 2%, something we don't expect to see until 2023," CIBC adds. 

CIBC Research/Market Commentary
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