FX market grinding to a slow halt for the week

  • Cable bids reported from Asian Sovereign names near 1.5770 and leveraged sellers seen 1.5820/25 in decent size;
  • Corporate bids at 1.3260 in EUR/USD remain untested, with earlier lows at 1.3262;
  • Stops now being reported in AUD/USD above .9280 and we may get a purge of intraday shorts pre-weekend;
  • USD/JPY is unlikely to move too far with plenty of option expiries due again today on the 99 handle.

I still think that long cable is the best trade among the major pairs, certainly as long as the double-bottom neckline at 1.5740/50 provides support. The AUD looks vulnerable on the crosses but as mentioned above, we could get a short squeeze heading into the weekend.

We should be in for a very interest-tapering week and volatility is assured. Have a great weekend.

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