USD/JPY: Good-sized selling interest reported above 78.85
Nice bounce in EUR/JPY off the earlier lows near 101.00 has taken USD/JPY to an intraday high near 78.60. Further gains are likely to be harder fought, with reports of very solid sell orders starting at 78.85 through 79.20.
AUD/USD off lows after China CPI data and CNY fix
China's CPI came in bang on expectations at +1.9% YoY and a little while before that, the PBOC fixed the USD/CNY mid-rate at 6.3110, down from 6.3260 on Friday. The AUD/USD has popped up 20 pips off its earlier lows at 1.0200 and USD/SGD has backed off it's intraday highs at 1.2240.
EUR/USD trade idea: Asian moves on a Monday are always wrong!
So goes the old market 'wisdom'', that the first move of the week in Asia, especially if its a big one, is always wrong. I'll go along with it for now, looking to buy a deeper dip in early Europe towards 1.2870 with a target at 1.3020 and a stop below the 200-day MA. I see no reason for us to exit range-trading mode and I like the risk-reward profile.
Just another risk-off Monday: AUD drifts lower as S&P futures fall
I believe that something like 14 out of the last 15 Monday's have been risk-off and today is shaping like it will be no exception. S&P Dec futures have broken support levels under heavy turnover and the AUD/USD has broken below support levels from last Thursday. Bids are reported at 1.0180 and below that is technical support at a recent daily low near 1.0145.
USD/SGD: Around $2billion bought in intervention near 1.2200 on Friday
That's the guestimate I'm hearing from one of the big banks, that agents for the MAS bought around $2 billion on Friday when USD/SGD neared the bottom of the presumed 2% trading band. The pair is slightly higher in early Asian trade although bounces have been small thus far.
AUD/USD slips back to opening levels in quiet trading conditions
We saw a small spike higher in early trade on the back of better-than-expected Chinese trade data but AUD/USD has now slipped back towards opening levels near 1.0230 as the market focusses on dovish comments from RBA Governor Stevens. The market is now pricing in an 85% chance of a 25bps rate cut next month. I see initial support at 1.0210/20, which was the level which the pair couldn't break below last Thursday when the jobs data was released. Interbank order boards report solid bids at 1.0180.
AUD/USD weekly preview, October 14th: Stronger CNY and SGD could foster short-covering
There is a fairly clear downtrend in play here but the signs are strong that this pair's recent fall is running out of steam. The inability to hold losses below 1.0165 was one sign and another was the fact that the pair rallied despite worse-than-expected jobs data. There is still solid selling interest near 1.0300/20 and this is most likely speculative players adding to existing shorts. Latest IMM data showed that market longs had decreased by 30% in the week up to October 9th and prime broker reports say that the professional market is already short. More dovish news-wire comments from RBA Chief Stevens saw the AUD fall in late NY trade, triggering intraday stops below 1.0235. Stronger than expected weekend Chinese data should ensure that the AUD begins the week on a slightly bullish tone. The CNY has been trading at record highs near the base of its 1% trading band against the USD, and the MAS has been intervening heavily in order to stop the SGD gain. Both of these factors should help AUD sentiment this week, with the first big risk event being Tuesday's release of the meeting minutes. Bids are reportedly solid near 1.0180 and the breakdown level at 1.0310/20 remains the level to watch on the topside; play this range and expect momentum to increase markedly on a break.
EUR/USD weekly preview, October 14th: Range trade with bullish bias
There is a very clear range-trading pattern in EUR/USD at the moment, with highs between 1.3050/80 and a base near the 200-day MA at 1.2825. Speculative EUR shorts increased by around 40% in the week to October 9th yet this had no major impact on the level of the EUR. Big reserve and asset managers have been playing the range as well, adding plenty of liquidity near the top and bottom. Asian central banks were noted buyers on Friday near 1.2920 and US corporates were noted sellers at 1.2980. Market sentiment remains very bearish towards the EUR but if the range-trading mode continues, the odds increase that a bullish break eventuates on the back of short-covering. [Some pairs like EUR/CAD are showing excessive short positioning and could also be well worth a look]. On the data front, US retail sales and the Empire Fed survey on Monday are the first risk events for EUR/USD with the German ZEW survey released on Tuesday; US industrial production and Philly Fed come later in the week.
USD/SGD: Heavy SGD selling near top of 2% band
It looks and feels like intervention with a number of big local banks buying a guestimated $2billion USD/SGD so far in the last few hours. These levels are close to the top of the 2% band for the SGD (bottom of USD/SGD).
EUR/USD: Stops triggered as bond yields edge lower
Bit of a stop-loss hunt in early European trade with stops triggered above 1.2955 and more reported above 1.2970 (see members section). Spanish and Italian bond yields have edged lower in early trade, perhaps giving EUR bulls the impetus to go stop hunting.
USD/JPY: More verbal intervention likely but stops building below 78.00
Just like last night, we can expect plenty of Yen-related comments to come out of G7 discussions today and later this evening. This should give USD/JPY a bit of a lift but banks are reporting that leveraged speculators are already quite long and stops are building below 78.00. Perhaps the opportunity is to wait for the stops to possibly get filled and then buy the 77.60/70 dip for a return to current levels?
MAS: 17 out of 21 analysts get it wrong, again.
Most of the market once again got today’s Monetary Authority of Singapore (MAS) decision badly wrong. The “no change” decision saw USD/SGD move swiftly from 1.2285 to just below 1.2200 before coming up for air. The rest of the USD/AXJ complex fell in sympathy which in turn underpinned EUR/USD, AUD/USD and USD/JPY. The MAS pointed at persistent price pressures in the domestic economy preferring to use as a fall-back the latest monetary efforts from the Fed, ECB, BOJ et al. Singapore’s Q4 GDP fell 1.5% QoQ but the island state dodged a technical recession when Q2 GDP was revised to up 0.2%.
AUD/USD: Sellers and stops
Still plenty of sell orders lined up at 1.0300 and above but there are also large stops above 1.0325 which might be targeted if the current drift higher continues. It's been very slow going so far today so get those chores done and come back once Europe opens, hopefully we get some volatility then.
EUR/JPY: Obvious parameters at 100.50/101.80
A quick look at the 30-minute chart shows a 5-wave down-move which stalled at a double bottom. The 61.8% retracement of the down-move coincides with some previous highs near 101.80 and this is the obvious resistance level on the day. The neckline of the double bottom is at 100.50 and this is obvious support. I'd play this 100.50/101.80 range with a bullish bias given that the G7 is underway and we can expect oral intervention.
USD/JPY the obvious play today
- Senior MOF official said there was no objection from G7 over Japan's concern with strong Yen
- Fed's Yellen has sympathy for BOJ whilst Fed is undertaking unconventional easing
- EconMin says that Japan may intervene without US consent
EUR/USD: Susceptible to short-squeeze
Interesting that two investment banks put out this little note at pretty much the same time. They say most of the selling today has been from leveraged players, especially after the Spanish downgrade, and the pair could be in danger of a short squeeze over the next few hours. I'd expect stops to now be building above 1.2900.