• AUD/USD gains 0.2% as risk sentiment perks up in Asia; ASX 200 rises 1.2%

• Bolstered by hopes of a compromise on U.S. stimulus package nL2N2GL1UE

• Traders wary as technical indicators overextended after 3.3% drop this week

• RBA rate cut bets limit upside; markets price in 60% chance of cut in Oct

• CBA expects steady policy in Oct in contrast to calls for cut from 2 rivals

• Support 0.7020, 38.2% of 0.6777 to 0.7413 rally followed by 0.7002, 100-DMA

• Resistance 0.7070-80, 0.7100-10; 0.7000-0.7200 consolidation in the making?

• For more click on FXBUZ

• EUR/USD marks time in Asia, holds ground after tepid bounce Thursday

• Better risk mood on hopes of U.S. stimulus package compromise supports

• Traders wary of extending decline on perception drop overextended

• Hopes of solid growth in 3rd quarter in Germany, France supportnL5N2GL2DI

• Recovery to be limited on worrying rise in virus cases in Europe

• Focus shifts to U.S. politics; 1st presidential election debate Tuesday

• Resistance 1.1695-1.1700,1.1730-40; support 1.16 25-35, 1.1590-1.1600

• For more click on FXBUZ

• EUR/USD holds ground in Asia after tepid bounce from 1.1626 Thursday low

• Bolstered by hopes of a compromise on U.S. stimulus package nL2N2GL1UE

• Underpinned by better risk mood as APAC stocks follow Wall Street higher

• Hopes of solid growth in 3rd quarter in Germany, France support nL5N2GL2DI

• Traders wary as technical indicators overextended after 1.8% drop this week

• Recovery to be limited on worrying rise in virus cases in EuropenL5N2GL1DM

• Resistance 1.1695-1.1700,1.1730-40; support 1.16 25-35, 1.1590-1.1600

• For more click on FXBUZ

• +0.1%, with the Nikkei trading +0.5% - stocks and risk to lead intraday

• 104.30/50 1.295 Bln, 104.70 650M, 105.00 636M, and 105.50 450M close strikes

• Charts, 105.47 horizontal Kijun line and 105.52, 50% of Aug-Sep fall cap

• Break of 105.55 would target 105.88-97, 61.8% Aug-Sep fall and cloud base

• 105.21 early London low then 104.90 Tenkan line are initial support

• AUD/JPY +0.2%, but sustained the 74.68 cloud break - strong bearish signal

• 73.90, 76.4% June/August rise held - break would target 72.49 June low

For more click on FXBUZ

• +0.1% after closing up 0.15%, as the 1.2721 200 DMA remains a magnet

• UK consumer confidence rises to highest since lockdown: GfK nL3N2GL3IE

• UK car production fell an annual 45% in August - SMMT nL5N2GL4BR

• Charts; 5, 10, 21 DMAs, 21 day Bollinger bands and momentum studies fall

• Bearish setup, but 1.2722 200 DMA has been a magnet - likely only short term

• Sustained break will target 1.2542, 76.4% of the June-September rise

• Close above the 1.3006 falling 21 DMA would bea positive signal

• NY 1.2708 low and London 1.2780 high initial support-resistance

For more click on FXBUZ

• AUD/USD opens 0.35% lower after paring losses as 1st test of support holds

• Recovers from 0.7016 low on hopes of a compromise on U.S. stimulus package

• Traders wary as technical indicators overextended after 3.3% drop this week

• Upside constrained as RBA rate cut bets, U.S. political uncertainty weigh

• Fading optimism on global economic recovery likely to limit rebound

• Support 0.7020, 38.2% of 0.6777 to 0.7413 rally followed by 0.7002, 100-DMA

• Resistance 0.7070-80,0.7100-10; APAC stock markets key for direction in Asia

• For more click on FXBUZ

• USD/JPY's 105.53 EBS high at the 50% Fibo of August-September slide

• Leaves the two haven currencies back on a flatter footing

• Disappointing claims kept Treasury yields under wraps nL2N2GL0N5

• Pair driven mostly by dollar index, which hit an ABC rebound target

• Nasdaq futures bounced just above Monday's correction lows, dimmed USD

• Still plenty of uncertainty. A 105.53+ close would eye 55-DMA at 106.05

• May be some room for 1-wk vols to rise into Tuesday's debate nL2N2GL0R5

• For more click on FXBUZ

• AUD o/n losses pared in NY afternoon, AUD/USD ending NY -0.11% at 0.7063

• AUD/USD slide stalls ahead of 10-DMA by 0.7002 nL2N2GL1GC

• RBA rate cut talk, soft commodities weighed on AUD early

• Focus shifts back to US rates low-for-longer, Fed in no hurry to lift rates

• Bulls eye lwr 30-d Bolli by 0.7090, Multiple DMA's cap in mid-0.72's

• Below 100-DMA by 0.7002 series of daily lows ahead of 200-DMA by 0.6773 attract

• For more click on FXBUZ

Bank of America Global Research maintains its EUR/USD profile unchanged targeting the pair through 1.14 into year-end.

"We expect a USD rally into the election and possibly beyond, depending on the outcome. We continue to expect a decline in EUR/USD to 1.14 by the year-end, significantly below current levels, rebounding again next year as the global recovery eventually takes hold. An increase in FX risk premium amid more volatile market conditions - which we believe are consistent with present high uncertainty and lack of official policy support - appears a necessary condition for a USD rally, however," BofA notes. 

"For next year, we expect EURUSD at 1.20. Our long-term equilibrium range estimate is 1.20-1.25," BofA adds.

The massive build-up in EUR/USD long positions dominated the summer forex market as the dollar slumped, but chart signals projecting a fall to support by 1.1500 nL2N2GL11O could pose a grave threat to those trades.

EUR/USD long positions have probably already diminished since Sept.
18, when they stood at $26.44 bln, according to the latest CFTC data, in light of the euro's 1.8% fall since then.

Still, last week's net long position was much larger than 2018 peaks, which caused a EUR/USD slide from 1.2556 to 1.1301 when it unraveled.

While past performance doesn't predict the future, there are ominous signs.

EUR/USD's abrupt fall from this month's high has taken it down to the lower 10-week Bolli band at 1.1631 last, which may cushion the fall briefly, but September's 1.2014 peak was roundly rejected by the downtrend line from the 2011 and 2014 highs, reinforcing the finality of the recovery from March's pandemic lows.

That recovery sent weekly RSIs to overbought levels.
Those now retreating RSIs have plenty of room to fall, having yet to hit the neutral 50 reading, never mind sub-30 oversold levels.

For more click on FXBUZ

TD Research warns that 2 ways risks are rising for the USD in the near-term and boked profit on its ToTW for this week: short EUR/USD and long USD/CAD.

"The USD bounce persists, reflecting the BDXY's five-day run. The backdrop relies on extreme positioning and some tired narratives that have started to reverse. The catalyst lies with the rise in the regional COVID infection curves alongside more uncertainty surrounding the US election. Two-ways risks are rising," TD notes. 

"This backdrop doesn't derail the reflation theme but, as noted for some time, it's mispriced. While central banks look determined to suppress real rates, there are signs of life in FX vols. Equity flows and growth divergence should reinforce a more durable bump in FX vol, leaving less focus on the central bank trade...We also close our trades of the week (TOTW), taking profit in short EURUSD  and long USDCAD," TD adds.

• One-week USD/JPY vols at 5.9 seem cheap given Tuesday's Presidential debate

• One-week vols are well below June, July and August highs near 8

• Lots of risk-off flows tied to the U.S. election, fiscal relief delay

• USD/JPY's back up to middle of August-September range at 105.53 nL2N2GL0HO

• Market expecting that range to hold, with upside limited near 106

• But a one-sided debate outcome to Tuesday's could test that view

  For more click on FXBUZ

Danske Research discusses EUR/USD outlook and now sees the pair trading in a wider 1.15-1.19 range going into year-end.

"Since last week, EUR/USD has shifted from the 1.18-1.20 range to testing 1.16. We suspect the factors, which have combined to create this situation, will continue to weigh until yearend. We thus see EUR/USD staying on the weak side versus recent history as an unexpected vacuum of policy and economic direction has come about. Looking further ahead, next year may still potential provide a new test of 1.20. Overall, do note the scope for USD appreciation due to the current global sell-off will be limited by Fed’s response function," Danske notes. 

"We thus see more short-term weakness in EUR/USD than previously anticipated as fundamentals have changed. In the best case for EUR/USD from here, we see several new EUR-positive factors but this will not be priced before some time. We are thus set to trade a wider interval, 1.15-1.19 and while equities remain weak, downside risk to spot is prevalent. Early next year, things may/should still change for the better," Danske adds. 

Credit Suisse discusses EUR/USD technical outlook and sees a scope for a flush towards 1.1485 in the near-term.

"EURUSD has maintained the weak tone seen Monday and has not only closed below key support from its 55 -day but has also importantly removed support from the August lows at 1.1710/1.1697. This finally sees a top established to mark a more significant move lower with support seen initially at 1.1627, then the 50% retracement of the rally from June at 1.1590. More important support and our objective remain s seen at 1.1495/85 – the 38.2% retracement of the entire rally from March, 61.8% retracement of the rally from June and point -of - breakout from the medium -term base. We would then look for a fresh floor here for an attempt to resume the broader uptrend," CS notes. 

"Resistance moves to 1.1717/19 initially, then the 55 -day average at 1.1737, with the immediate risk seen staying lower whilst below 1.1776/98. A break would throw a question mark over the top, with resistance next at 1.1827," CS adds. 

• USD/JPY's rebound led by broad dollar support hits 50% Fibo at 105.53

• 105.53 is halfway between August's high, September's low of 107.05/4.00

• Yen's sizeable gains as a haven elsewhere are being consolidated

• And the dollar index recovery is nearing down TL resistance from March

• If 105.53 is cleared, 61.8%, cloud base & 100-DMA are eyed at 105.89/98/6.05

• If 105.53 holds, tenkan's likely to be tested at 105.085 on EBS

• Numerous Fed speakers today, but opinions well known by now

  For more click on FXBUZ

• Cable rises to 1.2749 after testing 1.2692 (Asia low) in early Ldn trade

• 1.2749 = intra-day high. 1.2676-1.2776 was Wednesday's range nL2N2GL06V

• Sunak to unveil new UK job protection plans around 1045GMT nL3N2GL1T4

• Bailey to speak at North East England Chamber of Commerce webinar at 1400GMT

• GBP rose on Tuesday after Bailey pushed back vs talk sub-0% BoE rate looming

• See: nL5N2GJ1KQ. BoE is expected to enlarge its QE programme on Nov 5

• FX markets are currently seeing significant position adjustment nL2N2GL072

• Risky currencies purged. Bigger bets coming under pressure

• Traders are very long EUR but only slightly long pound

• EUR/GBP weighed at a time when it would logically be supported nL2N2GL086

• After the transition period (more balanced risk) EUR/GBP likely to rally

• EUR/GBP ranges underpinned by a thickening monthly Ichimoku cloud

• Cloud 0.8843-0.8169 will be very tough to break

• Targets drawn off this month's extremes at 0.9346 and 0.9508

• 
  

In its daily note to clients, J.P Morgan said it was out of their euro longs before Wednesday's euro zone PMI data, which did little to alleviate concern over growth but weren't bad enough to induce another aggressive sell-off.

Lack of good news isn't favourable for the outlook of high beta, JPM said, noting that U.S. President Donald Trump didn't help sentiment with his comment that the outcome of the U.S. election will end up in the Supreme Court.
The dollar benefits from current concerns, the bank said, and works against the euro and its long IMM positioning.

Hedge funds have reduced positions substantially, JPM noted, but real money remain heavily invested, according to their internal flow, although they have turned small sellers recently, and thus, an interesting dynamic to monitor.

The bank say that while EUR/USD remains under 1.1700/20, the danger remains to the downside.

FX option markets are more balanced now, but starting to add downside risk premium nL2N2GL06W

For more click on FXBUZ

• Cable pivots 1.27 as safe-haven USD rules the currency roost nL3N2GL185

• 1.2692 was Asian session base, 16 pips shy of Wednesday's nine-week low

• Equity losses contribute to USD strength: S&P 500 closed down 2.37% Weds

• See: nL2N2GK2DR. 1.2776 was Wednesday's high (1.2776 = Monday's low)

• EU's Barnier was in London for Brexit talks on Wednesday nL5N2GK25A

• Sunak to announce new plans to support UK jobs around 1130GMT nL5N2GK13O

• EUR/USD registered a daily close under major 1.1691 Fibo on Wed = negative

• 1.1691 Fibo is a 38.2% retrace of the 1.1169 to 1.2014 (June to Sept) rise

• We could now see a collapse to the daily cloud base that is now at 1.1567

• Immediate resistance comes in at Wednesday's 1.1719 EBS high

• We remain short at 1.1710, target 1.1570 and have lowered our stop to 1.1730

• Dollar's sentiment shift puts shorts in a tough spot nL2N2GJ076

• EUR/USD Trader TGM2334. Previous update nL2N2GK06I

• AUD/USD down 0.5% in Asia as risk mood stays decidedly negative

• APAC stock markets decline accelerates; MSCI Asia-ex Japan index down 2%

• U.S. political uncertainty, fiscal stimulus delay sap investor risk appetite

• AUD undermined by RBA rate cut bets; has dropped 3.3% this week

• Powell testimony on economic response to pandemic & jobless claims eyed Thur

• Support 0.7020, 38.2% of 0.6777 to 0.7413 rally followed by 0.7002, 100-DMA

• Resistance 0.7070-80, 0.7100-10

• For more click on FXBUZ

• AUD/USD opened 1.35% lower at 0.7271 after equities and commodities sold off

• Pair remained pressured in Asia breaking support at 0.7060/70 to 0.7047

• Heading into the afternoon the AUD/USD is wobbling below 0.7050

• The next level of decent support is at the 100-day MA at 0.7002

• Factors impacting AUD turning decidedly negative as trend lower takes hold

• Strong USD, high risk aversion and dovish RBA expectations weigh on AUD

• The 5, 10 and 21-day MAs aligned in bearish formation and tilting lower

• For more click on FXBUZ

The euro has fallen 3% from a 28-month peak at 1.2014 hit on Sept. 1 and key technical and fundamental factors point to further losses.

The 5, 10 and 21-day moving averages are aligned in a bearish formation and tilting lower, which is a strong signal a short-term downtrend is underway.
The break below the Aug.
3 low at 1.1695 indicates a range break-out, with a potential target of 1.1470-90, where the 38.2 Fibonacci retracement of the entire 1.0636-1.2014 rally converges with the key 100 DMA.

The euro had been drawing support from signs the euro zone economy was recovering on the back of a historic EU fiscal aid packagethat complemented aggressive easing steps by the European Central Bank nL5N2ES2N0nB5N28S01P.
The second wave of coronavirus infections in Europe has undermined those efforts and recent data indicates the recovery is stalling nL5N2GK1NO.

The recent fall in risk assets has broadly supported the USD and forced the large number of dollar shorts to pare back. One factor behind the fall in risk assets is uncertainty surrounding the November U.S. election and fading expectations a fiscal aid package will be agreed beforehandnL2N2GK0UZnNRAczdn2x. CBA notes that this will likely support the USD because it is a "countercyclical currency" - as counterintuitive as that seems.

For more click on FXBUZ

While Brexit has dragged on since the 2016 vote, the outcome of protracted negotiations will be pivotal for sterling in Q4.
Economists are still optimistic that a compromise will be found nL8N2G42PN, but real progress remains elusive, and a 'no deal' exit from the EU would hit the UK economy hard.

Top negotiators from both sides expressed determination to reach a deal ahead of informal talks on Wednesday, but there was no mention of how a compromise between the EU's 'even playing field' in government subsidies, workers' rights and environmental issues, and the UK's 'sovereignty' stance would be achieved nL5N2GK25A.

Neither side wants to be blamed for the economic impact of a 'no deal' outcome to the talks, so their resolute stance is no surprise as negotiations resume.

The Guardian newspaper carries Click here that suggests longer term, the cost of a no-deal Brexit to the UK economy could be two or three times more than the Bank of England's COVID-19 forecasts.
Meanwhile a British Chambers of Commerce survey shows most UK firms are unprepared for the end of the Brexit transition nL3N2GK3KS.

Technically GBP/USD is bearish with 5, 10, 21 daily moving averages, and momentum studies all tracking south towards 1.2542, 76.4% of the June-September rise.

For more click on FXBUZ