== $ == Banks Orders Book == $ ==

[Abo Abdullah]

US hedge fund buying USD/JPY aiming for the stops above 99.00; working through offers starting at 98.80

[Abo Abdullah]

Gold breaks $1380 after touching $1355 in Asia

Gold climbed above yesterday’s high of $1377 toward the top of the recent range. The key level on the chart is $1384.55, which was Monday’s high and the best level since mid-June.

The market is consolidating after the break of $1350 and given the tapering and emerging market uncertainty, the upside looks promising.

[Abo Abdullah]

BNP Paribas - Higher EZ PMI & Dovish BoE Comments; Stay Long EUR/GBP For 0.8710

This morning’s stronger-than-expected eurozone flash PMIs for August re-affirmed that growth momentum in the eurozone is picking-up, albeit gradually, says BNP Paribas.

The rise in the eurozone PMI composite to 51.7 from 50.9 largely reflects a pick-up in Germany’s PMIs to 52.0 and 52.4 respectively for the manufacturing and services surveys.

This, according to BNPP, argues for a rebound in EUR/GBP especially following the comments from BoE MPC member Weale, who said further QE may be needed under certain circumstances.

"QE risk clearly remains intact as the BoE’s forward guidance has so far failed to prevent a tightening in financial conditions," BNPP adds.

In line with this view, BNPP maintains a long quant EUR/GBP trade with a target of 0.8710 and a stop loss at 0.8500.

[Abo Abdullah]

FRANKFURT -German FinMin Schaeuble: Greece Aid Examined Mid-2014; No Debt Haircut

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

Barclays - Outlooks & Strategies For EUR/USD, GBP/USD, USD/JPY, & AUD/USD

EUR/USD: Our bearish view was vindicated and a top is likely forming ahead of retracement resistance at 1.3510. Further, the market was unable to close above the June peak at 1.3420 and this points to bearish risks to 1.3200/20. Sell rallies while 1.3420 caps on a closing basis.

USD/JPY: Although price tested the levels we were looking to sell at (98.05), the persistent sell off in US rates is likely to keep USD/JPY buoyant. We remain neutral though would turn bullish on a break above 99.30. Ideally, the market runs light stops through 98.65 and dips back lower in range to 96.90.

GBP/USD: The market is finally rolling over and resistance at 1.5750 is capping price. We are bearish, looking for a return to 1.5420. A move back above 1.5670 would turn us neutral instead.

AUD/USD: The market is trading around 0.9000 and is on course to test the Aug low at 0.8850. We are bearish while 0.9060 caps bounces.

[Abo Abdullah]

UBS - USD/JPY fortified by strong support

UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's majors and outline the technical positions.

Beginning with the USD/JPY, “Resistance is at 98.67, a close above this would be positive, extending the strength to 99.95 and then 101.53. Strong support is at 96.91 ahead of 95.81, indicating a neutral outlook.”

Regarding the GBP/USD, “The pair is under correction within what is an ongoing bullish trend. Support is at 1.5536 ahead of 1.5423. Resistance is at 1.5752 ahead of 1.5879, suggesting a bullish outlook”

Finally, in terms of the USD/CHF, “As bearish conditions persist, there is scope for further weakness to test important support at 0.9130. A move below which would expose 0.9022. Resistance is at 0.9301 ahead of 0.9396.”

[Abo Abdullah]

EU RISES as relase from Fed passes

EUR weak o/n as FOMC/taper sentiment bids up USD
Divergent PMI's focus on the weak (France) moves eur to lows o/n at 1.3297
EUR/USD back above 10-DMA (1.3330) dealers re-initiate USD shorts
Sup @ 10-DMA+trend channel bottom c1.3319, lwr eyes 30-DMA @ 1.3257
Resistance 1.3427 yday's hi and 1.3439 upper daily Bolli & 1.3483 76.4% Fib

[Abo Abdullah]

Commerzbank - EUR/USD Negative Divergence Points To A Sell-Off; Go Short At Mkt For 1.28

The break out of Wednesday’s EUR/USD inside day is likely to determine the trend for the next few days, projects Commerzbank.

"Since it is to the downside and because we see negative divergence on the daily RSI, we believe that another interim top could now be in place at this week’s 1.3453 high," CB argues.

Confirmation of this, according to CB, would be a drop through the steep two month support line at 1.3290 and a fall through Tuesday’s 1.3323 low, but only a drop through the next lower 1.3208/1.3188 support area will mean that a significant top has been made.

To negate this immediate bearish view, CB thinks that a a rise above the 1.3427 Wednesday high would be needed.

"In this case, Tuesday’s 1.3453 peak should be overcome with the 1.3500/20 region then being reached. It consists of the minor psychological level and 13th February high. This is regarded as the last defence for the 1.3711 February high. We do not favour such a strong rise, though, and believe that the currency pair has already topped out," CB adds.

In line with this view, CB enters into a technical tactical short EUR/USD at market (1.3340) with a stop at 1.3455, and a target at 1.2800.

[Abo Abdullah]

A macro name was a noted seller of AUD/USD in good size when it reached the .9040 level, sentiment remains negative and rallies are still looking to be sold into

[Abo Abdullah]

UBS - AUD/USD scope for more weakness

UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's commodity-based currencies and outline the technical positions.

In terms of the AUD/USD, “There is scope for more weakness and support focus is at 0.8848, a break below which would expose 0.8545. Resistance is at 0.9082 ahead of 0.9233, suggesting a bearish outlook.”

Moving to the USD/CAD, “The recent strength has seen the pair close above 1.0470. This development is positive, indicating potential move higher to test strong resistance at 1.0609. Support is at 1.0389, suggesting a neutral outlook.”

[Abo Abdullah]

Trade Idea: It's risky but sell USDCAD for a good reward

Trade idea background
The USDCAD touched 1.0660 in early July following the June Federal Open Market Committee meeting and then retreated to a low of 1.0240. The move up was due mainly to traders getting into a lather about US rate hikes and the move down, on US Federal Reserve chairman Ben Bernanke's statement to the effect that tapering wasn't tightening. The August minutes have seen a similar pattern, although the reasons are slightly different.
Trade idea parameters

Entry: Sell USDCAD around 1.0505-1.0520
Stop: 1.0560
Target: 1.0380
Time horizon: 1 week
Short-term chart

Michael O'Neill

[Abo Abdullah]

Citi's Portfolio: USD Longs Largest Position; Increases EUR longs, CAD Shorts

Citibank made several changes to its overlay portfolio this week including raising the EUR weight to +5 overweight from market neutral, raising the CHF underweight to -5 from -10 and lowering the CAD underweight to -10 from -5.

"The raising of the EUR overweight and CHF underweight reflects our expectation for increased capital flows to Europe from Emerging Markets. Equity and fixed income investments in EM should continue to unwind into September, and investors seek diversified safe havens," Citi outlines its bias on EUR and CHF.

"For Canada, we anticipate additional attention on the 4 September BOC meeting leading to CAD weakness," Citi outlines its bias on CAD.

Meanwhile, Citi kept the USD overweight as the largest position in the portfolio.

"With the FOMC on track to begin tapering in September, we anticipate the USD will continue to outperform in Q3," Citi projects.

[Abo Abdullah]

Westpac - USD shows signs of bullishness in coming week

The USD event risk next week arguably does not augur well for the USD with durables orders, consumer confidence and Chicago PMI all likely to underwhelm, while Bullard - seemingly the most cautious on tapering - is scheduled to speak twice next week, notes Sean Callow, a Global FX Strategist at Westpac.

“We however adopt a bullish USD bias for the week. For one, next week’s data is unlikely to overly upset Sep tapering expectations, key short term support levels for the USD index resides close by at 80.5 (roughly 1.3450 in EUR/USD) and US 10yr yields show no hint of topping out.

“Our 1 and 3mth views are unchanged - USD bullish - but we are wary that when the Fed commences tapering it may only be a token gesture and the USD might see an abrupt reversal given how much is priced into US bond yields.”

[Abo Abdullah]

Bond yields continue to rise, another reason to worry

US 10-year yields are up 2 basis points on the day to 2.91%, just shy of the daily (and cycle) high of 2.93%. The rise from 1.60% in May has been relentless, despite broad sentiment. Earlier today yields were lower but once again the upward pressure continues.
A break above 3% could send shudders through the broad market. In theory, higher yields make the US more attractive but recent history is showing that no one wants to buy into a bond bust. Past correlations are underlined by a 30-year bull market in bonds. Those days are over so nothing should be taken for granted.
first inclination is that it’s bad for stocks because it makes dividend yields less attractive. There is even talk rising yields could cause a stock market crash but, then again, that would mean buying into a bond bust.

What’s sure is that it will cause volatility and that tends to boost JPY and gold.