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EUR / USD
GBP / USD
USD / JPY
USD / CAD
AUD / USD
NZD / USD
USD / CHF
AUD / JPY
AUD / NZD
EUR / CHF
EUR / GBP
EUR / JPY
GBP / JPY
By Martin Miller  —  Mar 28 - 05:00 AM
  • USD/JPY hit a new 2024 high at 151.97 on Wednesday

  • Scope grows for an eventual break above the 152.00 psychological level

  • Spot continues to trade well above daily kijun line, that is at 149.23

  • 14-day momentum turned positive last week, highlighting the upside bias

  • EUR/JPY has seen a 163.26-163.95 range, on Thursday, EBS data shows

  • USD/JPY Trader TGM2336. Previous update nL2N3G50LS

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Mar 28 - 04:05 AM
  • Defence of well touted 152.00 barrier options helping to cap USD/JPY

  • However, there's talk that several of these options will expire next week

  • Soon-to-expire barrier options typically field the biggest defence

  • There will also be those who stand to benefit if they are erased pre expiry

  • Market is short gamma above 152.00 which could fuel gains/volatility above

  • Higher risk of intervention makes 153 barriers a much harder-to-reach target

  • FX option implied volatility higher - 1-month 7.8 vs l-term low 7.1

  • There's conflict between short gamma and intervention fears nL5N3G51G5

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Mar 28 - 04:05 AM
  • It's two years since Germany posted positive retail sales data

  • Sales fell 2.7% yy in Feb worse than the -0.8% f/c

  • The lowest estimate by any analyst polled was -1.1%

  • Traders have consistently bet on EUR/USD rising this year

  • Liquidation of $3.5bln longs helped push EUR/USD lower from 1.1047 to 1.0695

  • The liquidation of remaining bets ($6.6bln) may fuel a deeper drop

  • Traders may soon turn their back on the pound

Source:
Refinitiv IFR Research/Market Commentary
By Richard Pace  —  Mar 28 - 03:15 AM
  • There have been several option trades featuring 1.0600 strikes this week

  • 1.08-1.06 USD call spreads common with expiry dates over the next 1-2 months

  • Also, options with various types of triggers on USD call strikes at 1.0600

  • Such options would gain value amid a deeper EUR/USD decline toward 1.0600

  • Risk reversals retain a slightly firmer downside vs upside vol premium

  • However, implied volatility reverts to late 2021 lows across all expiries

  • That suggests that any deeper EUR declines will be slow and lack volatility

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 27 - 11:15 PM
  • EUR/USD opened at 1.0828 and eased to 1.0808 in early Asia

  • Bids ahead of support at 1.0800/05 cushioned the fall in thin market

  • Heading into the afternoon the EUR/USD was trading at 1.0820/25

  • The 61.8 fibo fo the Feb-March rise is at 1.0803 where daily lows are found

  • A break below 1.0800 targets the Feb 14 low at 1.0695

  • Resistance is at the 10-day ma at 1.0853 and break would ease pressure

  • Range trading likely until Friday's US PCE index

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 27 - 11:05 PM
  • AUD/USD opened flat at 0.6534 after Wall Street rally supported recovery from lows nL2N3G52FN

  • It dipped to 0.6515 following slightly weaker Aus retail sales nAZN1MPCJW

  • A trend line drawn from Oct 26 low comes in @ 0.6515 today and held again

  • USD/CNH eased from the morning high and helped to underpin AUD/USD bounce

  • AUD/USD traded to 0.6540 before settling at 0.6535

  • Resistance is at the 10-day MA at 0.6546 and a topside trend-line at 0.6614

  • A break of either 0.6514 or 0.6614 should see decent follow-through

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 27 - 04:30 PM

Synopsis:

Danske Bank reflects on the Swiss Franc's recent underperformance as EUR/CHF hits its highest level since June 2023. Predicting further elevation for the currency pair, Danske maintains its outlook for 25 basis points quarterly rate cuts by the Swiss National Bank (SNB), aiming for a policy rate of 0.75% by the year's end. Despite the potential for fundamental strengths to buoy the CHF, current and anticipated rate differentials alongside higher global interest rates are expected to pose challenges for the currency in the near term.

Key Points:

  • EUR/CHF Surge: The currency pair's ascent to levels not seen since mid-2023 positions CHF as the notable laggard in recent trading sessions.

  • Monetary Policy Forecast: Danske stands by its forecast for the SNB to implement 25 basis point reductions each quarter throughout the year, reducing the policy rate to 0.75%.

  • Intervention Stance: Current expectations lean towards the SNB pausing FX interventions, with the March decision underpinning a near-term softer CHF stance.

  • Market Forces vs. CHF: Although fundamental factors may support the Swiss currency, prevailing and forecasted rate discrepancies alongside elevated global rates could challenge CHF strength.

  • EUR/CHF Outlook: Anticipating EUR/CHF to hover around the 0.98 level in the coming 1-3 months, reflecting the intricate balance between policy actions and market dynamics.

Conclusion:

The recent peak of EUR/CHF signals a period of relative weakness for the Swiss Franc, influenced by Danske's projections of continued SNB rate cuts and a temporary halt in FX interventions. Although intrinsic strengths could underlie CHF's value, the broader context of rate differentials and global interest rate trends may hinder its performance in the near future. Danske's forecast points towards a challenging yet dynamic period for the CHF, with EUR/CHF expected to remain elevated in the short to medium term.

Source:
Danske Research/Market Commentary
By Andrew M Spencer  —  Mar 27 - 11:05 PM
  • Off 0.05% near the top of a 1.2611-1.2639 range - hectic early on D3

  • UK car output climbed 14.6% in February thanks to strong domestic demand

  • Good news for both UK industry and the resilience of UK consumers

  • The Easter holiday with the key US Core PCE on Friday suggests consolidation

  • Charts; 5, 10 & 21-day moving averages ease with daily momentum studies

  • 21-day Bollinger bands expand - daily charts retain a negative bias

  • 1.2569, 38.2% of the October/March rise is initial significant support

  • A close below 1.2569 would open the door to a test of the 1.2517 2024 low

  • Close above last Friday's 1.2677 high would suggest a base is in place

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Mar 27 - 08:55 PM
  • AUD/USD -0.1% in Asia as dollar strengthens broadly ahead of long weekend

  • Weighed down by weak CNY/CNH and Fed Waller's cautious comments on rate cuts

  • Fed's Waller still sees 'no rush' to cut rates amid sticky inflation data

  • Australia retail sales rise a modest 0.3% in Feb versus 0.4% expected

  • Will add to dovish RBA rate expectations after benign inflation data Wed

  • February U.S. PCE price index data and Powell speech Fri key for direction

  • Support 0.6510, 0.6490-95, resistance 0.6545-50, 0.6580-85

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Andrew M Spencer  —  Mar 27 - 07:45 PM
  • Off 0.17% early led by the NZD after dovish RBNZ comments - GBP closed +0.1%

  • RBNZ follows the dovish Riksbank after SNB cut last week - pressure on BoE?

  • Second-tier UK data suggests risk appetite and the USD likely lead sterling

  • Long Easter weekend with the key US Core PCE Friday point to consolidation

  • Charts; 5, 10 & 21-day moving averages fall with daily momentum studies

  • 21-day Bollinger bands expand - daily charts show a clear bearish setup

  • Negative signals target a break of 1.2569, 38.2% of the Oct/March rise

  • A close below 1.2569 would open the door to a test of the 1.2517 2024 low

  • Sustained break of last Friday's 1.2677 high would suggest a base in place

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Krishna K  —  Mar 27 - 06:50 PM
  • NZD/USD offered in early Asia on increasingly dovish RBNZ rate expectations

  • RBNZ governor Orr says conditions to allow cut becoming more apparent

  • Says core inflation pressures easing, inflation expectations back on target

  • Fed's Waller still sees 'no rush' to cut rates amid sticky inflation data

  • Soft NZ economic data, U.S. economic outperformance undermine NZD

  • NZ cuts FY 2024 GDP expectations to 0.1%, down from 1.5% forecast previously

  • New Zealand consumer confidence falls as recession news hit - survey

  • February U.S. PCE price index data and Powell speech Fri key for direction

  • Break of 0.5986 Mon low opens 0.5940-50, resistance 0.6030, 0.6050

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By John Noonan  —  Mar 27 - 06:00 PM
  • AUD/USD opens flat after recovering in US on back of Wall Street rally nL2N3G52FN

  • AUD/USD bounced off trend-line at 0.6512 Wednesday and is at 0.6514 today

  • Most of the FX volatility on Wednesday was in the USD/JPY V

  • AUD/USD in a pennant with top line at 0.6614 and bottom line at 0.6514

  • Closer resistance is at the 10-day MA at 0.6546

  • Aus Feb retail sales out today with market expecting +0.4% M/M

  • AUD/USD to be influenced by moves in the USD/CNH during Asian session

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 27 - 03:00 PM

Synopsis:

ING observes notable currency movements in the G10, highlighting the continued depreciation of low-yielders, especially the Swiss Franc (CHF) and Japanese Yen (JPY). With the Swiss National Bank adopting a dovish stance and no longer seeking a stronger CHF, attention shifts to JPY as USD/JPY approaches the 152 mark, a level that tests Japan's tolerance for FX intervention.

Key Points:

  • Pressure on Low-Yielders: The CHF and JPY face significant sell-offs, with CHF's underperformance attributed to a dovish SNB stance, suggesting caution in anticipating a reversal.

  • USD/JPY Testing Intervention Thresholds: USD/JPY's overnight touch of 152 continues to challenge Japan's FX intervention limits, potentially still within the "verbal intervention" range.

  • Criteria for Actual Intervention: Actual FX intervention by Japanese authorities may require a further increase in USD/JPY, possibly closer to 155, focusing on the rate of change rather than specific levels.

Conclusion:

As USD/JPY tests the boundaries of Japan's FX intervention tolerance, market participants remain vigilant for signs of potential action by Japanese authorities. With the rate of change being a critical factor, further upward movement in USD/JPY could trigger more than just verbal warnings, posing significant implications for FX markets. The situation underscores the delicate balance central banks must maintain in managing currency strengths amidst evolving global economic conditions.

Source:
ING Research/Market Commentary
By Randolph Donney  —  Mar 27 - 03:05 PM
  • USD/JPY uptrend persists, but with ever tinier new L-T highs

  • 2022's 151.94 peak eclipsed by Wednesday's 151.975 high

  • Pullback from peak was caught above Friday's 151 low

  • Friday being the last day with a new 2024 high

  • A daily range above 152 looks key to starting a fresh leg higher

  • That as a second pending bearish RSI divergence is watched

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Randolph Donney  —  Mar 27 - 02:05 PM
  • USD/JPY hit a minor new 34-yr high at 151.975 vs 151.94 2022 peak

  • Japanese officials held an emergency meeting regarding yen support plans

  • Market saw the meeting signaling MoF, BoJ hope to avert a 152 breakout

  • Post-intervention threat setback held just above Friday's 151.00 low

  • Specs betting against durable intervention, but also Fed rate cut scope

  • Also that still wide, if off 2023 peaks, Tsy-JGB ylds spreads will hold

  • Fed's Waller speech late today, PCE Fri & ISM, NFP next week now eyed

  • Hawkish data may be needed sustain a 152 breakout amid MoF pushback

  • Top-heavy daily techs and hefty spec long position possible headwinds

  • But more of an issue if US data favor Fed's 3 2024 rate cuts from June

  • And if Japanese intervention becomes actual rather than verbal

  • A 152 break could see twin Fibos by 155.20 eyed sans intervention

  • A sub-151 range could target kijun and cloud by 149.23 on Friday

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 27 - 01:30 PM

Synopsis:

Credit Agricole discusses Japan's financial authorities' potential for intervention as USD/JPY crosses the 2022 intervention mark. Finance Minister Shun’ichi Suzuki's recent statements signal a heightened level of verbal intervention, indicating a critical "line in the sand" around the 152 level for USD/JPY. The bank highlights historical precedents and strategic timings for intervention, suggesting that upcoming holidays might offer an opportune moment for action.

Key Points:

  • USD/JPY Threshold Crossed: The currency pair's advance beyond its 2022 intervention point has elicited strong verbal warnings from Japanese finance officials, hinting at possible proactive measures.

  • Verbal Intervention Scale: Suzuki's remarks have escalated to the highest level on Credit Agricole's verbal intervention scale, signifying potential imminent action to counter excessive currency fluctuations.

  • Strategic Intervention Level: Observations indicate a consistent focus on the 152 mark for USD/JPY, delineating a critical boundary for potential Japanese financial interventions.

  • Historical Precedents and Timing: The analysis references past instances of intervention during global holiday periods, suggesting that similar timing could enhance the impact of any forthcoming measures.

Conclusion:

Credit Agricole underscores the significant posture of Japan's financial authorities as USD/JPY exceeds previous intervention levels, with clear signals from Finance Minister Suzuki of readiness to counteract undue market movements. The firm outlines a strategic "line in the sand" at the 152 level, coupled with insights on the tactical timing for intervention. As global markets approach the holiday season, the anticipation of Japanese intervention looms larger, potentially setting the stage for decisive actions to stabilize the yen's valuation.

Source:
Crédit Agricole Research/Market Commentary
By Paul Spirgel  —  Mar 27 - 11:45 AM

Sterling remained anchored near recent trend lows, flat on the day at 1.2627, as the sterling long unwind after last week's dovish BoE hold appears to have run its course -- signaling a bottom for now -- with last Friday's 1.2576, just below the flat 200-DMA at 1.2591, providing a base.

Trading is relatively subdued as GBP/USD held in a muted 32-pip range on Wednesday, amid caution ahead of the holiday weekend and U.S. Q4 GDP and Fed-favorite core PCE data on Friday.

The recent decline in GBP/USD, from the March 8 high at 1.2894 to Friday's 1.2576 low was predicated on below-forecast UK CPI data and the dovish BoE rate hold on March 21, both of which brought forward lower rate expectations.

Prior to CPI and the BoE hold, traders had priced in an August policy shift by the BoE, which has now been moved up to June.

For now, it appears sterling traders are unwilling to test the 200-DMA at 1.2591 and the March 22 trend low at 1.2576 ahead of the Good Friday holiday and important, though not likely well-viewed, U.S. data on Friday.

Barring a significant shift in U.S. growth or inflation data Friday, the symmetrical UK-U.S.
rate expectations in 2024, as indicated on LSEG's IRPR pages, hints that GBP/USD may be near a bottom for this cycle.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 27 - 11:00 AM

Synopsis:

ANZ expresses hesitance in taking long positions on the Japanese Yen (JPY) despite potential moderation in USD/JPY gains following the Bank of Japan (BoJ)'s meeting in 2024. The bank compares the current BoJ's cautious approach and uncertain outlook for future rate hikes to its stance in 2006 and 2007, noting parallels in messaging and subsequent JPY underperformance.

Key Points:

  1. Historical Context: The BoJ's historical tendency to maintain very low interest rates for extended periods post-hike has led to periods of JPY underperformance. The cautious language used in 2024, indicating that "accommodative financial conditions will be maintained for the time being," echoes past sentiments.
  2. Economic Challenges: Japan's economic outlook continues to pose challenges, with consumption acting as a drag on GDP and manufacturing still in contraction territory. Weakness in global trade growth could further depress the Japanese economy and the JPY.
  3. JPY Weakness Correlation: Since the COVID-19 pandemic, the JPY's weakness has often been associated with a divergence between export volumes and values, highlighting external factors' significant impact on the currency.
  4. Short-Term Outlook: While some moderation in USD/JPY gains might be expected following the BoJ's meeting, ANZ advises against adopting long JPY positions. They suggest that any news or rumors of further BoJ tightening should be approached with skepticism regarding their impact on strengthening the JPY.

Conclusion:

ANZ's analysis advises caution in taking long positions on the JPY, citing historical precedents of BoJ policy impacts, ongoing economic challenges, and the currency's sensitivity to global trade dynamics. The advisory reflects a cautious outlook on the JPY's performance in the near term, even in the face of potential policy tightening by the BoJ.

Source:
ANZ Research/Market Commentary
By Rob Howard  —  Mar 27 - 10:15 AM
  • Cable elicits fresh support ahead of 1.2600 after falling from 1.2638

  • 1.2638 was London morning high. Pre-figure bids also propped GBP/USD in Asia

  • Seasonality is a stimulus for speculative sterling buyers as end-March looms

  • Pound has risen 0.7% vs dollar in April on average over the past 50 years

  • CFTC data showed net GBP long shrank from 17-year high in week to March 19

  • UK Q4 C/A deficit will be revealed on Thursday at 0700 GMT; GBP 21.4 bln f/c

Source:
Refinitiv IFR Research/Market Commentary
By eFXdata  —  Mar 27 - 10:00 AM

 Synopsis:

BofA analyzes the short-lived USD selloff following the March FOMC meeting, attributing the initial decline to several perceived dovish indicators from the Fed. However, subsequent dovish actions or communications from other G10 central banks, such as the SNB's surprise cut and the BoJ's "dovish hike," have since weighed on their respective currencies, leaving the USD relatively strong due to converging rate cut expectations across G10 central banks.

Key Points:

  1. Fed's March Meeting: The initial USD selloff was fueled by factors such as the unchanged 2024 dot plot despite higher growth and inflation forecasts, the Fed's tolerance for recent inflation readings, and a strong labor market not deterring potential rate cuts.
  2. G10 Central Banks' Responses: Subsequent dovish stances from other central banks, including the SNB's rate cut and the BoJ's cautious rate hike, have contrasted with the Fed's position, impacting their currencies.
  3. Rate Cut Convergence: Expectations for June rate cuts across several G10 central banks are aligning closer to those of the Fed, maintaining rate differentials that favor the USD.
  4. Inflation Data's Role: Upcoming inflation figures will be crucial in determining future currency movements and central bank actions.

Conclusion:

The USD's quick recovery post-March FOMC underscores the global central banking landscape's influence on FX markets. As G10 central banks adopt dovish or less hawkish tones, converging rate cut expectations help maintain the USD's advantage. The focus on upcoming inflation data across these economies will be pivotal in shaping future rate decisions and FX trends.

Source:
BofA Global Research
By eFXdata  —  Mar 27 - 09:00 AM

Synopsis:

MUFG notes increased rhetoric from Japan's Ministry of Finance (MoF), with Finance Minister Suzuki warning of "bold action" if unwarranted yen depreciation continues. Since the Bank of Japan's (BoJ) rate hike, the yen has been the second-worst performing G10 currency, overshadowed only by the Swiss Franc's performance, which was influenced by the SNB rate cut. The correlation between yield spreads, the US dollar, and USD/JPY suggests an overshoot of the spot rate, potentially prompting intervention from the MoF, deemed speculative post-BoJ hike.

Key Points:

  • Renewed MoF Rhetoric: Finance Minister Suzuki's statement underscores Japan's readiness to intervene in the forex market to curb speculative yen depreciation.
  • Post-BoJ Rate Hike Dynamics: The yen's performance, second only to the CHF in weakness among G10 currencies, is closely watched following the BoJ's decision to raise rates.
  • Yield Spread and USD Correlation: There's an apparent overshoot in USD/JPY's spot rate when compared to yield spreads and the dollar index, hinting at speculative forces at play.
  • Potential for Intervention: The BoJ and MoF may intervene if USD/JPY's rise, currently capped by option-related barriers, extends sharply above current levels.

Conclusion:

MUFG emphasizes the heightened likelihood of intervention by Japan's MoF and BoJ should the yen continue to depreciate sharply, particularly in the wake of speculative trading post-BoJ rate hike. The current situation, marked by a potential cap due to option-related barriers, keeps the spotlight on USD/JPY for further moves and possible governmental action.

Source:
MUFG Research/Market Commentary
By Christopher Romano  —  Mar 27 - 07:25 AM
  • AUD/USD hit 0.6539 in early Asia then hit 0.65115, NY opened near 0.6525

  • Drop from high aided by US$ buying, below estimate Feb. Australia CPI

  • Pair pierced the daily cloud base, up trend line off the Feb. 13 daily low

  • Sharp USD/JPY drop, softer US yields US2YT=RR helped AUD/USD bounce

  • USD/CNH slip from high, equity ESv1 & gold XAU= gains helped buoy

  • AUD/USD bounced above the t-l, cloud base; was down only -0.08% early NY

  • Daily bull hammer candle formed which may concern AUD/USD shorts

  • Monthly inverted hammer, hold below numerous daily MAs concerns longs

  • Fed's Waller speaks to Economic Club of NY reception at 18:00 EDT

  • US weekly claims, Feb. PCE risks loom for Thursday & Friday respectively

  • For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Justin Mcqueen  —  Mar 27 - 05:35 AM
  • Trilateral meeting (BoJ, MoF and FSA) raises speculation over intervention

  • USD/JPY falls to daily lows of 151.15 in response

  • A meeting between the BoJ, MoF and FSA last took place May 30th 2023

  • However, no intervention followed

  • Thus, while USD/JPY drifted lower initially, the uptrend soon resumed

  • Recall, seasonals favour USD/JPY upside into Japanese FY end nL2N3FR136

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
By Jeremy Boulton  —  Mar 27 - 04:40 AM

EUR/USD is going nowhere fast so it pays to be short with the guarantee of some returns due to interest rates while there is less risk of losses due to unfavourable movement.

Although the gap between U.S. interest and euro zone interest rates that favours the dollar is not that large at around 1.5 percent, it is expected to hold throughout 2024.

Considering EUR/USD has effectively sat still for over a year, investors may see an opportunity to sit short and reap some reward.
Should they sell strength, there is a good chance that they make additional gains due to favourable FX movement.

EUR/USD's range in 2023 was one of the smallest on record, and so far 2024 is shaping up to be quieter.
Option vols are sinking suggesting less chance of the bigger moves that specs betting on euro rising hope to see, and the growing potential that they sell will weigh on EUR/USD.

This year the pair has traded a 1.1047-1.0695 range and rather unsurprisingly given the quiet spell, it's sitting near the centre of these extremes.
Traders may increasingly focus on trade remaining within 1.06-1.11, or a range close to that, and interest rates and current positioning are cause to expect a slow grind lower this year.

For more click on FXBUZ

Source:
Refinitiv IFR Research/Market Commentary
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