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

[Abo Abdullah]

UBS Daily FX Report

FX Technicals

EURUSD NEUTRAL

The pair is currently testing the resistance at 1.3164, which has been tested a multiple times. A closing break above this would be positive. Support is at 1.3067 ahead of 1.2994.

USDJPY BULLISH

With the bull trend intact, focus is on resumption of upside, with resistance at 101.53 ahead of the key resistance at 103.74. Support is at 98.27.

GBPUSD NEUTRAL

There is a strong resistance at 1.5283; which is being tested a currently. A closing break above this would open 1.5394. Initial support is at 1.5158 ahead of 1.5028.

USDCHF NEUTRAL

The pair approaches the strong support at 0.9367, which was tested last week. A closing break below this would be negative, exposing 0.9242. Resistance is at 0.9478 ahead of 0.9555.

AUDUSD BEARISH

With the bear trend intact, focus is for further downside. Initial support is at 0.9138 ahead of 0.8999. There is a strong resistance at 0.9333.

USDCAD NEUTRAL

The pair faces a critical support at 1.0311. A break below this would prolong the correction to 1.0241. Resistance is at 1.0468 ahead of 1.0609.

EURCHF BULLISH

Initial resistance is at 1.2396 ahead of the critical 1.2485. A closing break above this would be positive, opening 1.2650. Downside should be limited, with support at 1.2342, which is expected to hold on closing basis.

EURGBP BULLISH

The recent downside should be limited with a strong support at 0.8590.With the MACD above its zero line, focus is on upside towards 0.8711 and then, 0.8815.

EURJPY BULLISH

We look for further upside towards the key resistance at 133.80. A move above this would open 137.14. Initial support is at 130.294 ahead of 128.02.

[Abo Abdullah]

Morgan Stanley on USD/JPY

Morgan Stanley: We examine USD/JPY pullbacks into the 98.20 area to re-establish [buying] strategies, with a move above the 101.55 area the likely trigger for a renewed move towards the 103.75 recent highs. Positioning is now shown to be neutral, suggesting that there is plenty of scope to introduce yen short position.

[Abo Abdullah]

Barclays remains bearish on EUR given their negative forecast for PMI data this week, the resurgence of political uncertainty in peripheral countries (Spain, Italy, Portugal), and the relative monetary policy outlook between the Fed and the ECB

[Abo Abdullah]

AUD/USD - Asian account offers at .9250
AUD/USD - Offers into .9250 with stops above .9280; larger offers ahead of .9300 with large stops above .9310

USD/JPY - Large stops below 99.70

USD/JPY - Corporate accounts noted sellers

[Abo Abdullah]

EUR/USD - Stops above 1.3180 were cleared, but larger stops above 1.3220 with offers in front from 1.3200 to 1.3210. Also, a clear break above 1.3210 would encourage momentum buying

[Abo Abdullah]

Swiss name noted buyer of USD/CHF in good size

[Abo Abdullah]

EUR/USD - Sovereign offers at 1.3200 through 1.3210 in good size; large stops above that level

[Abo Abdullah]

Options Expiries for the NY Cut (10:00AM ET)

USD/JPY - 99.00, 100.00

EUR/USD - 1.3000, 1.3050

GBP/USD - 1.5100

EUR/GBP - .8800

AUD/USD - .9200

USD/CAD - 1.0500

[Abo Abdullah]

SEB - EUR/USD In The Doldrums .. USD/JPY Key Day Reversal? .. SP500 Soon At Next Target

The following are the intraday outlooks for EUR/USD, USD/JPY, AUD/USD, and S&P500 as provided by the technical strategy team at SEB Group.

EUR/USD: Still in the doldrums. Even though the market made small upward progress on Friday buyers was unable pushing us up to the minimum target, 1.3209. We are hence still locked in the current doldrums, a likely upward continuation pattern. The overall picture still calls for the July rise being a correction to the preceding drop but only as long as not breaking 1.3418.

USD/JPY: Key day reversal? Of course too early to draw a conclusion of today’s price action but the behavior seen so far indicates a growing risk of actually printing a bearish key day reversal (also in EUR/JPY the same potential pattern is visible). So a close below 99.80 today will likely give the green light to further selling and the last week elaborated 97.20 (95.40) drop seeing its probability rise. On the other hand not closing below 99.80 and instead breaking 100.63 will confirm more upside progress also on the short term horizon.

AUD/USD: Next leg higher underway. After the upside turn from the mid body point of the July 16 rising benchmark candle the market should be positioned for an additional lift towards next 0.9306/0.9345.

S&P 500: Soon at next target. The closer we get to the 161.8% Fibo projection point, 1702, the greater the likelihood of a setback will become. Daily stochastic has also entered a bearish pre-divergence which will help underpin a downside correction if occurring. Key support for the day is 1675 and as long as not broken 1702 will continue to be a viable target.

[Abo Abdullah]

EUR/USD - Sovereign offers at 1.3200/1.3210 cleared along with stops above
USD/JPY - Cleared bids at 99.50 and stops underneath; more stops noted through the 99.20 area with longs trapped

[Abo Abdullah]

JP Morgan - Will USD/JPY Spike Towards 110 Or Fall To 90 By End-Q3?

JP Morgan kept its USD/JPY forecasts at 102 as of end-Q3 and 105 as of end-Q4.

"The USD is likely to remain range-bound unless we see significant surprises from the US economic data and /or Fed commentary. Given this backdrop, JPY’s trend will likely become the more important determinant for USD/JPY ahead. The developments in the past month are generally supportive for our mid-term JPY-bearishness," JPM outlines its m/t bias on the pair.

The upside risk to this view, according to JPM, could probably take USD/JPY towards 110 and EUR/JPY towards 140 by end-Q3 if one or more of these 3 scenarios materialize:

(1) US figures (job data in particular) strong enough to boost speculation on early hikes, (2) Japanese government announces more aggressive growth strategy than the market expects, (3) Chinese economic growth accelerates sharply into 2H

In the mean time, the downside risk to this view, according to JPM, could probably take USD/JPY back to 90 and EUR/JPY to 120 by end-Q3 if one or more of these 3 scenarios materialize:

(1) US economy slows down significantly, (2) Chinese recovery fails to accelerate into 2H, (3) US debt/fiscal discussion turns messy.

JPM also lists the following as potential trigger events in Q3:

- FOMC meetings (Jul 31, Sep 18) - BoJ meetings (Aug 8, Sep 5) - MoF’s weekly portfolio flow data (every Thursday).

[Abo Abdullah]

USD/JPY - Japanese accounts buying the dips in this pair, helping keep it clear of the 99.20 stops for now

[Abo Abdullah]

Commerzbank - Betting On A Weaker EUR: A EUR/USD Macro-Hedging Strategy

While the US Federal Reserve is cautiously moving towards a normalisation of its monetary policy, the ECB has made it clear that such a move is still a long way off and this will keep putting pressure on EUR/USD, says Commerzbank.

Betting On A Weaker EUR: A EUR/USD Macro-Hedging Strategy - Commerzbank
22 Jul 2013 00:10 EDT
By eFXnews.com
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While the US Federal Reserve is cautiously moving towards a normalisation of its monetary policy, the ECB has made it clear that such a move is still a long way off and this will keep putting pressure on EUR/USD, says Commerzbank.
"Even though Fed Chairman Ben Bernanke has recently added to volatility on the foreign exchange markets, it is becoming increasingly clearer where the Fed is headed. Its aim is to gradually taper the amount of its asset purchases, with the pace of the reduction depending on the state of the economy...This would be a first step towards a gradual normalisation of US monetary policy, which should support USD, even though the Fed is still a long way from hiking rates," CB clarifies.
"The ECB’s stance, on the other hand, continues to be expansionary. Its recent commitment to an extended period of ultra-low interest rates has again made it clear that a normalisation is still distant. Even if the euro area economy started to gather some momentum now, the ECB cannot withdraw its promise of keeping rates at low levels for an extended period," CB adds.
Given that, how should investors play this potential EUR/USD downside?
"In this environment, clients who want to hedge future EUR selling / USD buying can benefit from any declines in EUR-USD by means of a Forward Extra. The Forward Extra is an attractive alternative to a plain-vanilla FX forward, above all for clients who – like ourselves – expect EURUSD to decline but consider it unlikely that levels near 1.2000 are on the cards by year-end," CB advises.
Here is the full details of this hedging strategy as provided by Commerzbank:

[Abo Abdullah]

Citi - USD: Tapering Without Tightening, Is It Possible And How?

Focus of the day:

"Can the Fed engineer QE tapering without, at least initially, triggering tightening of monetary conditions? One possible answer would be for the Fed to keep the expected stock of QE relatively stable even as it reduces its monthly purchases. Chairman Bernanke tried to achieve that by highlighting during his testimony that the end of QE and the subsequent monetary tightening is not predetermined. One way to strengthen that message would be for the Fed to extend the expected QE exit date further into the future by linking it to a target combining unemployment and inflation. This could slow down the backing up of long-term yields and should keep the short end of the curve anchored. The Fed would still retain the flexibility to end QE when it deems necessary. The above measures could help the Fed smooth the transition to the QE exit. It need not stop or reverse the backup in long-term yields, however, especially if the US data continues improving from here. The USD could continue to be a cyclical outperformer especially if Fed’s policies alleviate concerns about premature tightening and support US equities."

Dr. Valentin Marinov is Director and Citi's Head of European G10 FX Strategy.

[Abo Abdullah]

EUR/USD