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Nov 15 - 05:00 PM
EUR/USD: 1.20 Target To Arrive Next Year; Earlier Than Consensus Expectations - SocGen
First appeared on eFXplus on Nov 15 - 12:40 PM

Societe Generale Research discusses EUR/USD outlook in light of its latest forecasts updates which now puts EUR/USD at 1.14 by mid-next year ahead of 1.20 by next year-end.

EUR/USD is at the heart of a dollar forecast, even if we don’t think the euro is driving global currency trends. The consensus for next year, according to Bloomberg, looks for a rise through 2020 to 1.13 by mid-year and 1.15 by 4Q. The pace picks up a bit after that and reaches 1.20 by 2023, which is conveniently in line with the forward rate. How exciting is that? Our EUR/USD forecast looks for 1.20 to arrive earlier, by the end of 2020. That puts us at the upper end (but not quite at the very top) of the survey panel," SocGen notes. 

"The question for 2020 is whether a euro recovery requires eurozone growth, or if further slowing in US growth to European levels is enough?," SocGen adds. 

Société Générale Research/Market Commentary
Nov 15 - 03:48 PM
EUR/USD - Shorts Dented As Safe Havens Are Sold
First appeared on eFXplus on Nov 15 - 01:05 PM
  • Nov 14 bull hammer followed by rally today, US data helps buoy nL2N27V0EC

  • Sales of safe-haven yen, CHF, US$ lift euro crosses, drags EUR/USD along

  • EUR/USD breaks above 55 & 10-DMAs, lift stalls near Nov 8 high, cloud top

  • Rally after Nov 14 hammer, rising RSI give daily techs a bullish tint

  • Recent developments have put EUR/USD shorts in jeopardy nL2N27V0N2

  • Euro zone November Markit PMIs are key data risks late next week

chart: Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 02:36 PM
GBP/USD - CORRECTED-BUZZ-GBP/USD Boosted After Brexit Party Defers To Conservatives
First appeared on eFXplus on Nov 15 - 01:05 PM

Corrects error in headline

  • GBP firm into week's close +0.19% at 1.2909, NorAm range 1.2919-1.2869

  • Brexit Party to stand down from 43 non-Tory seats aids conservative momentum

  • Brexit Party report gives sterling outlook another boost nL2N27V0KM

  • GBP/USD eyes wkly cloud base res, 1.2916, bulls gain abv Oct 21 high 1.3012

  • EUR/GBP flat on day at 0.8562, Fri range 0.8574-0.8550

GBP Chart: Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 01:24 PM
GBP: What's Next For GBP As Th Odds Shifting More In Favor Of A Tory Election Victory? - MUFG
First appeared on eFXplus on Nov 15 - 11:15 AM

MUFG Research discusses GBP outlook on the back of reports that the Brexit Party is due to stand down in 43 seats across the UK.

The odds have shifted more in favour of a Tory election victory. Further reduction in political risk premium is probable, helping the pound, but some signs of Labour party poll gains and the macro backdrop will limit the upside.” MUFG notes. 

"The latest opinion polls released this week continue to signal that the Tories hold a healthy lead over the Labour party of around 10-12 percentage points. Public support for both the two main parties (Tories and Labour) has increased since the election was called at the expanse of the Brexit party and Lib Dems. The gap though between the Tories and Labour would have to narrow materially to create more election uncertainty and weaken the pound," MUFG adds. 

BTMU Research/Market Commentary
Nov 15 - 12:12 PM
EUR/USD - FX Options Wrap-Sell USD, Buy GBP, EUR/USD Rewards
First appeared on eFXplus on Nov 15 - 10:00 AM

Demand has been good for USD put options against several G10 currencies, according to DTCC option data, and at least one U.S bank is already suggesting USD has peaked nL2N27V07C.
EUR/USD risk reversals retained a small USD put premium, despite the recent spot setback, which is consistent with USD put demand.
The EUR/USD implied-vol curve trades at record lows, making options cheap -- rewarding those who bought very-short-dated strikes as spot pushed back to the mid 1.10s Friday.
One-month EUR/USD expiry gets December's European Central Band and Federal Reserve rate decisions and UK election fallout, to make longs more attractive there nL2N27V084.
Volumes for GBP/USD call (topside) options far exceed those to the downside over recent weeks, as dealers bet on the pair pushing higher nL2N27V06N.
Even pre-election 1.30 GBP calls bought Friday in good amounts nL2N27V0FJ, although 1.30 could prove a tough nut to crack, given the defence of binary option barriers nL2N27T072.
One-month GBP expiry implied vol highlights current post-election volatility risk, and it's very high nL2N27U070

EURUSD put/call volumes: Click here

GBP put/call volumes: Click here

1-3-month EUR/USD vol: Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 09:48 AM
AUD/USD: Holding Low Conviction Bias While Maintaining 0.67-0.69 Range N-Term - NAB
First appeared on eFXplus on Nov 15 - 08:27 AM

NAB discusses AUD/USD technical outlook and holds a low conviction bias around current levels.

"Bullish MT and LT triggers produced in Q4 2019 were unable to break the two-year downtrend. Impulsive rejection of trend resistance places AUD/USD back in a neutral space," NAB notes. 

"We anticipate AUD/USD maintaining an approximate 0.67 to 0.69 range in the coming weeks. While this range holds we will continue to hold a low conviction," NAB adds. 

NAB Research/Market Commentary
Nov 15 - 08:36 AM
EUR/USD - COMMENT-A Simple Way To Position For A EUR/USD Cloud Breakout
First appeared on eFXplus on Nov 15 - 06:55 AM

The uncertainty of EUR/USD's direction means traders could benefit from an option that covers the risk of a breakout.
EUR/USD is stuck within the thinning daily cloud, which on Friday encompasses 1.0983-1.1064.
Direction from here is uncertain.
EUR/USD still has a chance to drop under the cloud base, but its failure to close under the 1.0994 Fibo -- 61.8% of the 1.0879 to 1.1180 October rise -- hints at a bear trap.
That could lead to recovery above the daily cloud top.
An example of a prudent way traders can cover a break either side of the cloud is by investing in a two-week EUR/USD strangle option: simultaneous purchasing of a two-week 1.1065 EUR call and a two-week 1.0985 EUR put for a combined cost of 38 pips.
Profit potential is unlimited if spot either rises above the 1.1103 or falls below the 1.0947 break-even points before the Nov.
29 expiry.
Losses are limited to the 38-pip premium.
Calculations are EUR/USD at 1.1032 on the EBS.

Daily Ichimoku Chart: Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 07:24 AM
EUR/USD - COMMENT-After Quietest Year On Record, EUR/USD May Excite In 2020
First appeared on eFXplus on Nov 15 - 05:40 AM

EUR/USD has never been quieter, with the range traded this year the smallest on record and option vols dragged towards record lows as a result nL2N27V06X.
The quiet period could end next year, and the trigger for a break from the doldrums lies to the downside.
EUR/USD is locked into a downtrend.
Because it's quiet, EUR/USD is much more likely to sustain the trend than break it.
Inevitably that will put pressure on a big technical point.
The 76.4% retracement of the major 2016-2018 rise is 1.0863, and if it's broken that suggests the entire move from 1.0340 will be unwound.
The prospect of a sustained move in one direction equal to, perhaps greater than, this year's range should wake traders from their slumber.
The probability of a steeper decline has been boosted by a big reduction of short positions since May and economists' conviction for a rally nL3N27M3H0.

EUR/USD betting Click here

EUR/USD Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 06:12 AM
EUR/USD - COMMENT-The EUR/USD Trend Is Rock Solid
First appeared on eFXplus on Nov 15 - 04:50 AM

EUR/USD has been trading a range around 1.09-1.12 for a long time.
It's fallen towards the lower end of that range as the end of the year approaches when traders pare bets, so the risk of rise is high nL2N27V05H.
Traders are short and some adjustment is likely to underpin EUR/USD.
Volatility is low, meaning the range is highly unlikely to break and bets pared this year will probably be re-established next year nL2N27V065.
A EUR/USD trend is clear, with near- record-low volatility meaning the pair is being contained in tight ranges, although they are subject to a glacial decline.
That creeping fall is determined by a rate gap that pays those who are short and costs those betting on a rise.
Without a major change, EUR/USD will continue to inch down, extending the pattern of slowly descending ranges.

EUR/USD Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 05:00 AM
EUR/USD - Rising Risk Aversion May Boost EUR/USD Back Towards 1.1200
First appeared on eFXplus on Nov 15 - 02:40 AM
  • Doubts about a trade deal grow, UK election soon, possible year-end turmoil

  • Lots of reasons to expect risk aversion to rise in short-term

  • Euro is a safer asset if not much fancied but critically traders are short

  • The risk of some paring of current positions before year-end is substantial

  • Good chance this lifts EUR/USD towards peak of 1.09-1.12 (break not likely)

  • EUR/USD closed on base daily ichimoku cloud @ 1.0983 and bounced yesterday

  • Cloud twist @1.1054/57 Nov 27 likely to attracts. Bullish picture to evolve

EUR/USD Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 03:48 AM
EUR/USD - Failure Under A Key Fibo Hints At A "bear Trap"
First appeared on eFXplus on Nov 15 - 01:40 AM
  • Still a chance for a break and daily close below the cloud base, at 1.0983

  • However, the failure to close under 1.0994 Fibo hints at a "bear trap"

  • 1.0994 Fibo is a 61.8% of the 1.0879 to 1.1180 October rise

  • There is a risk of a recovery to the cloud top, now at 1.1064

  • Offer is at 1.1035, but will exit if there is a daily close above the cloud

  • Related comment nL2N27S0A4

Daily Ichimoku Chart: Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 02:36 AM
EUR/USD - Consolidate Small Gains In Quiet ASian Session
First appeared on eFXplus on Nov 14 - 10:15 PM
  • EUR/USD traded in 1.1019/30 range in Asia after bullish outside day Thursday

  • Pair underpinned by EUR/JPY buying with cross gaining 0.25% in risk on Asia

  • Kudlow comments US-China deal progressing supported risk nL2N27U28F

  • EUR/USD resistance at 10-day MA at 1.1043 and break suggests bottom forming

  • A break below 1.0985 would see renewed pressure and bears back in control

  • EZ trade and inflation data today, but focus remains on US-China headlines

eur/usd Click here

Refinitiv IFR Research/Market Commentary
Nov 15 - 01:24 AM
G10: Sentiment Cyclicality Suggests Risk-Off To Accelerate Thru Nov-29 Followed By A Reversal Thru Dec 16 - Nomura
First appeared on eFXplus on Nov 14 - 02:00 PM

Nomura Research discusses a quant insight on the cyclicality of global equity sentiment to make its forecasts for cases of risk-off moves.

"We found that global equity sentiment tends to revert to the mean in roughly 22 trading days on average, while US equity sentiment tends to take around 20 trading days

For example, if global sentiment were to fall below the one-year average today (14 November), we would expect risk-off moves to accelerate through 29 November, followed by a reversal of this pessimism through 16 December (this assumes that the deterioration and recovery processes take 11 trading days each). If conditions were to change, these cyclicality forecast results would also change, of course," Nomura notes. 

"But the pattern of sentiment swings thus far shows that 2019 was typified by a repeated cycle of risk-on and risk-off phases lasting about a month," Nomura adds. 

Nomura Research/Market Commentary
Nov 15 - 12:12 AM
AUD/USD - Off Highs On Report US-China Differences Remain
First appeared on eFXplus on Nov 14 - 10:00 PM
  • AUD/USD traded to 0.6798 earlier on headlines quoting WH advisor Kudlow nL2N27U28F

  • WSJ report on full speech less optimistic as stumbling blocks remain

  • Kudlow said talks constructive, but Trump not ready to sign off yet

  • AUD/USD trading around 0.6790/95 after closing NY at 0.6785

  • Support at 61.8 of 0.6670/0.6929 at validated by bounce from 0.6770

  • Break below 0.6765 would renew downward pressure

  • Resistance @ former support around 0.6810 and 38.2 of 0.6729/0.6670 @ 0.6830

aud/usd Click here

aud/usd 2 Click here

Refinitiv IFR Research/Market Commentary
Nov 14 - 11:00 PM
AUD/USD - Settles Below 0.6800 After AUD/JPY Led Rally
First appeared on eFXplus on Nov 14 - 09:00 PM
  • AUD/USD bounced on positive comments from WH adviser Kudlow trade talks nL2N27U28F

  • Market getting whiplash from contradictory comments from US & China

  • Move higher led by AUD/JPY, which rose 0.35%, as equities rallied

  • AUD/USD resistance at former support around 0.6810 where sellers tipped

  • More resistance at 38.2 of 0.6929/0.6770 move at 0.6830

aud/usd Click here

Refinitiv IFR Research/Market Commentary
Nov 14 - 09:48 PM
AUD/USD - Shorts Fatigued, Bulls May Capitalize On China News
First appeared on eFXplus on Nov 14 - 07:45 PM
  • AUD/USD descent stalled at Ichimoku Cloud 0.6782 on US-China news

  • China lifts US poultry ban, Kudlow optimistic nL4N27U30InL2N27U28F

  • AUD bulls have a chance to mount counter-attack against shorts

  • Strong rally off daily Cloud would cue more short-covering ahead

  • Closing above 0.6822 would nullify Bollinger downtrend channel

  • But trendline resistnace above at 0.6843 will cap further gains

Refinitiv IFR Research/Market Commentary
Nov 14 - 08:36 PM
EUR/USD - A Quick Shift Leave Pair On Familiar Turf
First appeared on eFXplus on Nov 14 - 01:15 PM
  • Early bounce on US data gives some relief to longs nL2N27U0JI

  • Pair heavy on safe haven flows but holds above 61.8 Fib of 1.0879-1.1180

  • EUR/JPY & EUR/CNH sales help keep pair pinned just above day's low

  • USD/JPY & US equities sell-off sharply, EUR/USD spikes up near 1.1020

  • Daily RSI diverges & bull hammer forms, daily techs warn shorts

  • Monthly RSI still falling, says downside momentum could resume

  • Global growth concerns, soured risk could sink EUR/USD nL2N27U0TQ

chart: Click here

Refinitiv IFR Research/Market Commentary
Nov 14 - 05:00 PM
AUD: Poor Employment Data Unlikely To Trigger Another RBA Cut Next Month - Citi
First appeared on eFXplus on Nov 14 - 12:40 PM

Citi discusses its reaction to this week's weak patch of Australian employment data. 

"Australia’s unemployment rate rose back to 5.3% and the employment change number came in at 19k with most of the change being seen in full time employment (-10.3k)," Citi notes.

"Despite the poor data, our economists note that the RBA is unlikely to be spooked. - “We don’t believe today’s data will result in an RBA interest rate cut next month. Rather, we believe the RBA will give more time for the cuts to date and tax rebates to influence activity data, particularly as the RBA believes the economy is at a gentle turning point. Today’s data will however guarantee that the RBA maintains the dovish policy bias.” - Note that the RBA Board meeting will be on 3 December and this was the last major data release before then -

"The economic outlook is that “we continue to expect the next live RBA meeting to be in February 2020, by which time we expect the RBA Board to conclude that further policy stimulus is required and where we forecast the final 25bp rate cut of this cycle.” Citi adds. 

Citi Research/Market Commentary
Nov 14 - 03:48 PM
AUD/USD - Fibo Holds Risk-Off Sales For Now
First appeared on eFXplus on Nov 14 - 01:15 PM
  • Downbeat AU, CN data, trade talk concerns keep pair heavy in NY nL2N27U0F4

  • Daily cloud top pierced as drop in AU yields & soured risk weigh on AUD/USD

  • Slide stalls near 61.% Fib of 0.6670-0.6929, meager bounce, near 0.6785 late

  • Pair below 55-DMA & cloud top, RSIs fall, techs say downside risks remain

  • Shift in market's central bank views is a concern for longs nL2N27U12H

  • Key US data in focus, if upbeat AUD/USD slide is likely to extend

chart: Click here

Refinitiv IFR Research/Market Commentary
Nov 14 - 02:36 PM
USD/JPY - Yen Carry Trades In Trouble As Risks And Vols Squeeze Shorts
First appeared on eFXplus on Nov 14 - 12:35 PM
  • Yen broadly bid on global trade, growth risks woes nL2N27U0PO

  • US-China trade deal peril rises on Hong Kong woes nL8N27S7TTnH9N27R01F

  • USD/JPY's breaks key props at 108.50 nL2N27U0PO, close is key

  • Daily kijun at 108.26 also in play. Nov low, weekly tenkan @ 107.89/99

  • IMM USD/JPY specs long largely above 108 are at risk on 107.89/99 break

  • Treasury yields sliding faster than JGBs, '20 Fed cuts pricing back in

  • USD/JPY's topping formation reinforced by AUD/JPY's reversal nL2N27U0VM

  • Fed speakers stick to econ's in "good place" meme, but traders dubious

  • Risk flows could change on a dime if trade deal gets completed, signed

  • Without that, data, such as U.S. retail sales Friday, will guide rates, risk

  • Record VIX shorts, 1-mo USD/JPY vols basing by July lows, RR favor shorts

Chart: Click here

Chart: Click here

Refinitiv IFR Research/Market Commentary
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