• USD spec short positioning increased in Jan 13-19 period

• EUR specs were relatively heavy buyers long rises 7,576 contracts to 163,466

• EUR net long now 53% of total positioning; long component at 237k contracts

• JPY specs sold 506 contracts now long 50,014, JPY fell 0.13% in period

• GBP specs +763 contracts long grows to 13,705; Brexit, neg rate fears ebb

• AUD, CAD specs reduced longs near recent multi-yr highs; NZD specs +1,276

• Rally off Jan 18 low stalls short of 21-DMA, a slide ensues

• Doji forms on today's daily chart, doji also forms on monthly chart

• Doji candles signal investors are showing indecision

• Daily RSI rises slightly, monthly falls, mixed signals being sent

• Bears need break of 1.2040/65 support to take control of EUR/USD

• Break of January's 1.2349 (EBS) high needed to put bulls in charge

• For more click on FXBUZ

• EUR/USD rallies in Europe's am but stalls short of the 21-DMA

• EZ PMI, drop in equities & oil, US$ bid drive pair down nL1N2JX12R

• NY opens near 1.2175, slide extends to 1.21545 (EBS) but bounce ensues

• US$ bid fades, 1.2185 trades but pair slips near 1.2165 late in the day

• Daily, monthly dojis suggest indecisive, RSI signals are mixed

• EUR/USD investors should focus on US$ risks nL1N2JX181

• For more click on FXBUZ

CIBC Research discusses USD/JPY outlook and targets the pair at 102 in Q1 and at 100 by year-end.

"We remain wary of extrapolating the trend, as Japanese investors are likely to continue to look towards other liquid fixed income markets in the same time zone. Indeed, Japanese appetite for Australian bonds is part of the reason for ongoing AUD momentum. The latest quarterly Tankan business survey, while taken before the full impact of the second wave, showed a modest improvement in sentiment, for the second consecutive quarter," CIBC notes. 

"Against a still structurally compromised USD, we expect cautious JPY gains. Expect the MoF to push back should the JPY advance too quickly. The Tankan survey revealed that large manufacturers forecast a budget rate of 106.70 for fiscal year 2020. As a consequence, it seems likely that exporter profits are likely to be compromised by the prospect of modest JPY gains," CIBC adds. 

• GBP/USD off early NorAm low, ends NY -0.43% at 1.3675; NY range 1.3685-36

• UK RS, PMI misses pushes GBP below 1.37, again; though pullback shallow

• Sterling relinquishes 1.3700 again after disappointing UK data nL1N2JX1B4

• Despite upbeat post-Brexit tones, COVID, lockdowns a headwind for GBP gains

• Resistance at 1.3745 Thurs high, 1.3774 upper 30-day/wk Bolli area

• Supt 10-DMA 1.3639, Jan 18 low 1.3522; bears gain control sub-1.3468 50% Fib

• EUR/GBP ends NY +0.37% at 0.8894, Fri range 0.8918-0.8865; sterling unwinds after weak RS/PMI releases

Credit Agricole CIB Research discusses the EUR outlook and maintains a neutral bias in the near-term.

The EUR rally at the start of the new year has lost momentum with the build-up in market longs going into reverse in recent weeks. On a more global level, the relative underperformance of the single currency could reflect a renewed demand for EUR-funded carry trades. Indeed, the EUR’s yield disadvantage remains quite significant in a cross-country comparison and the dovish ECB outlook seems to suggest that this will be the case for the foreseeable future," CACIB notes. 

"Caution is warranted in our view, given the risk of weaker-than-expected business sentiment data and further official verbal intervention in the EUR... We therefore maintain a relatively neutral near-term outlook on the EUR," CACIB adds. 

Risk appetite was waning slightly Friday, but implied volatility remained depressed near crisis lows as FX stuck to well-worn ranges.

However, current low levels offer much better risk versus reward if actual volatility should pick up, especially where implieds are trading below historics - offering good value with minimal risk nL1N2JX0RT.

Bold calls for EUR/USD 1.30 have been reaffirmed by one U.S bank by year's end, a view still held by many option investors nL1N2JX0N7.
Near-term, however, low implied volatility reflects the range-bound spot market, although one-month risk reversals regained a EUR call (topside) premium Thursday, from EUR puts last week nL1N2JW0T1.

USD/JPY implieds are the lowest of the G10 majors, yet still above historics (one-month 5.4 vs 4.5).
Too low to sell, yet unlikely to reward longs with ranges so tight.
However, bet spot keeps the same 103.00-104.50 range for another two weeks and earn 8:1 with a DNT nL1N2JX0TM.

AUD/USD one-month vol paid 9.65-9.75, reflecting spot setback risk, but no panic.
Beware 1.4 billion 0.7650 expiry Monday nL1N2JX0IK.

For more click on FXBUZ

ANZ Research highlights risks of reversal for AUD over the coming weeks.

"This week, our risk appetite indicator notched 57 days above 0.5. Since the election, markets have embraced the stronger growth expectations that have come with both positive vaccine news and prospects of greater fiscal stimulus," ANZ notes.

"While price rises alone are not usually a concern, the duration of such extended risk appetite does suggest a level of vulnerability for the AUD and industrial commodities if sentiment does shift," ANZ adds. 

TD Research maintains a bearish NZD/CAD exposure in spot targeting a move towards 0.88.

"US equities are trading at around a 4% discount to their DM peers. That's an important consideration given that the US growth outlook is comfortably running ahead of the G10 majors now, especially in Europe. It highlights that G10 Reserve currencies are the most expensive now: EUR, CHF, and GBP all trade at 1-3% premiums.

"The Dollar Bloc sits close to fair value, but that misrepresents the large NZD premium, which sits at 1.5%. It's a key feature of our short NZDCAD trade idea," TD adds. 

FX traders, who have been buying USD/JPY all week according to EBS flow data, should watch out for a further drop in risk appetite.
That could see funds flow into the safe-haven yen, pushing USD/JPY lower and trapping those that bought the currency pair this week in the process.

Asian stocks have stepped back from record highs made on U.S. President Joseph Biden's stimulus proposal.
Sentiment was also hit by worries of new coronavirus restrictions in China, which reported 103 COVID-19 cases on Friday nL1N2JX0CV.

Those bullish on USD/JPY have been crippled by solid resistance above 104.00 in recent sessions.
Japanese exporter offers have helped to limited the upside.
USD/JPY's recent recovery moves have been stopped by the daily cloud, which currently spans 103.96-104.50 and the falling trend line from the March 24, 2020, 111.71 peak, which now comes in at 104.04.

If USD/JPY registers a daily close under the broken kijun line at 103.50, that should weaken the market structure and put those that have been buying USD/JPY this week into a bind.

For more click on FXBUZ

• Sterling snaps a four-day bull run and forms a bear signal

• Candlestick harami, inside day real body, can warn of a reversal

• Thurs action did manage to close above 1.3700 after repeated failures

• While above 10DMA, 1.3627, will view current pullback as corrective

• Major tipping point a way off at 1.3522, Jan 18 low

• We bid by 1.3540 but will be alert to stronger reversal signals

  For more click on FXBUZ

  
  

• Stocks dip from record highs made on Biden's stimulus proposal nL1N2JX0CV

• Dollar nurses weekly loss as bounce fades nL1N2JX0B8

• While EBS flow data hints at solid USD/JPY buying all week

• Japanese exporter offers have continued to limited the upside

• USD/JPY sees a 103.49-69 range so far on Friday, bias on the downside

• USD/JPY chart shows huge technical resistance remains nL1N2JX0GL

• USD/JPY, EUR/JPY relationship weak, 30-day log correlation well under +0.50

• AUD/USD option premiums/implied volatility met renewed demand Friday

• Benchmark 1-month paid 9.65-9.75 as AUD/USD slips back to the lower 0.77's

• Buying implied vol as AUD/USD slips highlights downside fears

• However, implied volatility remains near crisis lows - certainly no panic

• FX Market long AUD/USD, looking for eventual 0.7800 recovery/extension

• Mid 0.76 retest possible - huge 0.7650 expiry Monday nL1N2JX0EA

  
  

• Short gamma is basically an area where dealers are short options

• It can exacerbate volatility in the FX rate - this area is sub 102.50

• 102.61-60 early Jan post crisis lows, Big option barriers reside 102.50

• For now, option market not expecting a sudden drop toward this level

• Implied volatility and downside premium near crisis lows nL1N2JV0XS

• Crisis-low FX option premium and why that matters nL1N2JW0OA

  
  

  
  

  
  

• GBP/USD falls to 1.3668 on worse than expected UK Dec retail sales data

• Up 0.3% MM vs +1.2% f/c. Up 2.9% YY vs +4.0% f/c nS8N2IB04O

• 1.3668 is the lowest level since Thursday's 32-month high of 1.3745

• Support points include 1.3650 and 1.3623 (Wednesday's low)

• 1.3691 (pre-UK retail sales data low) is now a resistance level

• UK Jan flash PMIs due 0930GMT: service f/c 45.0, manufacturing f/c 54.0

• German PMI 8.30GMT manufacturing f/c 57.5 from 58.3, services 45.3 fm 47.0

• EZ PMI 9.00GMT manufacturing f/c 54.5 from 55.2 and services 44.5 from 46.4

• EUR/USD 1.2159-1.2178 EBS in Asia after 1.2136-73 in NA yesterday

• Pattern of four daily rising lows this week

• EUR/USD underpinned by rising 55-DMA 1.2080 and daily cloud top 1.2291

• Highs influenced by mid-point 20-Day Bollinger bands 1.2198

• Scope for new 2021 highs if pair can close above 1.2200

• 
  

• 
  

• AUD/USD opened 0.23% higher at 0.7765 after USD broadly eased on Thursday

• After a quiet start it slipped when Asian equity markets turned negative nL1N2JX03Y

• AUD/USD traded down to 0.7743 before settling around 0.7745

• Support is at yesterday's 0.7743 low and the 10-day MA at 0.7732

• A close below the 21-day MA at 0.7707 would suggest a top is in place

• Sellers are tipped ahead of 0.7800 and are capping for now

• Resistance is found at dialy highs between 0.7805/20 made since Jan 6

• For more click on FXBUZ

• EUR/USD opened 0.48% higher at 1.2164 and traded in a 1.2161/78 range

• Heading into the afternoon it was trading around 1.2175

• EUR/USD retained bid tone despite sluggish Asian equities nL1N2JX03Y

• Resistance is at the 21-day MA at 1.2198 and break increases upside risks

• Support is @ the 55-day MA @ 1.2080 and break increases downside pressure

• Momentum favours return to tests above 1.2300 where sellers are tipped

• Direction will likely be decided by mood on Wall Street later today

• For more click on FXBUZ

• -0.2% at the base of a 1.3712-1.3736 range with decent interest

• Move appears to be profit taking into this week's 1.1% bounce

• GfK UK consumer confidence slipped back in January nL9N1FL01U

• Nissan reverses earlier UK stance - Brexit now an opportunity nL8N2JW4BY

• Charts; 5, 10 & 21 daily moving averages and 21 day Bollinger bands climb

• Positive setup - blue sky technically until 1.4303, 50% 2014-2020 fall

• Close below rising 1.3605 21 DMA needed to end the topside bias

• NY 1.3704 low and London 1.3745 high initial support-resistance

For more click on FXBUZ

• AUD/USD traded down to 0.7750 after trading at 0.7770 earlier

• USD broadly firmer, as Asian equity markets slightly lower on the day

• There wasn't an immediate reaction to weaker than expected Aus prelim retail sales nS9N2H600M

• AUD/USD support at yesterday's 0.7742 low and 10-day MA at 0.7733

• AUD/USD sellers ahead of 0.7800 capping for now ahead of 0.7819 trend high

• For more click on FXBUZ

• Flat, consolidating Thursday's 0.5% gain - positive risk weighed on the USD

• EU tighten travel curbs on virus hot spots, 3rd wave fears grow nL1N2JW0PN

• COVID control is very hard to achieve in 27 EU countries without lockdowns

• Chart; EUR found strong support around 1.2063 38.2% Nov-Jan rise this week

• Bounce rejected 1.2059 lower 21 day Bolli band - good indicator of oversold

• Close above 1.2197 21 DMA would target 1.2336 upper 21 day Bolli next week

• Daily momentum studies, 5, 10 & 21 moving averages conflict - neutral setup

• NY 1.2136-1.2173 range is initial support-resistance - likely quiet in Asia

  For more click on FXBUZ

• AUD/USD opens 0.23% higher at 0.7765 after trading to 0.7784

• Firm commodities and broad USD weakness underpinning AUD/USD

• Talk of sellers ahead of 0.7800 limiting upside for now

• Support is at 10-day MA @ 0.7734 and close below shifts pressure to downside

• Resistance is at 0.7805/20 where daily highs were made since Jan 6

• Aus retail sales for December today with market expecting -2.5% M/M

• For more click on FXBUZ

Credit Agricole CIB Research maintains a bearish bias on CHF targeting EUR/CHF around 1.12 by year-end.

"When it comes to the SNB, we expect it to continue doing its utmost to prevent policy differentials from diverging. After all, the overvalued currency itself is treated as a key driver of overly tight monetary conditions which suggests a policy mix consisting of negative rates and currency intervention if needed will stay in place for longer and regardless of any external criticism. So much may ultimately even help to increase the CHF’s funding attractiveness from here," CACIB notes. 

"View wise, we continue to target EUR/CHF at around 1.1200 by end 2021 with more upside expected in 2022," CACIB adds. 

• USD/JPY's 103.33 pre-ECB, U.S. data beat lows held ABC support

• Pair bounced after U.S. claims, Philly Fed, housing starts nL1N2JW1F0

• Treasury yields helped, but TIPS yields drop counteracting since

• And prices couldn't reach the 103.67 EBS high, held Tuesday's 103.66 low

• Prices well below main down TL from March & cloud base, Fri at 104.06/3.96

• Market most heavily spec short since 2016 needs sub-103.50 Fibo, kijun close

• Also a break of 103.33 key to targeting 102.595 trend low nL1N2JW1PG

For more click on FXBUZ