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

[Abo Abdullah]

UBS Daily FX Report

FX Technicals

EUR/USD - BULLISH

As the bull trend persists, indicated by the trending and momentum indicators pointing higher, focus is on further upside. Key resistance is at 1.3417. Support is at 1.3253 ahead of 1.3166

USD/JPY - NEUTRAL

The sharp sell-off since Thursday faces a strong support at 96.75.A closing break below this would trigger further sell-off. Resistance is at 99.41 ahead of 100.87.

GBP/USD - NEUTRAL

The pair is testing the critical resistance at 1.5394, since Thursday. A closing break above this would be a bullish development. Initial support is at 1.5356 ahead of 1.5263.

USD/CHF - BEARISH

With the MACD settled below the zero line, our focus is on further downside, with initial support at 0.9242 ahead of critical 0.9130. Resistance is at 0.9305.

AUD/USD - BEARISH

Upside should be limited with a strong resistance at 0.9333. With the bear trend intact, focus is for further downside. Initial support is at 0.9121 ahead of 0.8999.

USD/CAD - BEARISH

The pair extended its weakness and is trading just above the significant support at 1.0241. Resistance is at 1.0325 ahead of 1.0349.

EUR/CHF - NEUTRAL

There is a strong support at 1.2313; a closing break below this would be negative. Resistance is at 1.2350.

EUR/GBP - BULLISH

The cross bounced from the support at 0.8570. With the MACD above its zero line, focus is on upside towards 0.8711 and then, 0.8815.

EUR/JPY - BULLISH

Weakness since last week, stalled just above the critical support at 129.77. With the MACD still above the zero line, the risk is for the resumption of upside. Resistance is at 132.74.
Source: UBS FX Strategy

[Abo Abdullah]

Barclays: EUR and USD look vulnerable vs JPY

Barclays: EUR and USD look vulnerable vs JPY as downside breaks in both USD/JPY and EUR/JPY Friday attracted an increase in activity. USD/JPY's break below 98.25 opens risk to trendline support at 96.80, with 98.35 providing intraday resistance. EUR/JPY should edge toward the daily cloud base at 128.80, where a daily close below would suggest weakness toward 125.00. EUR/JPY now at 130.00, USD/JPY at 97.91

[Abo Abdullah]

Commerzbank recommends selling EUR/USD at 1.33 with a 1.3425 stop and 1.28 target

[Abo Abdullah]

Citi - FX Wire on USD/JPY

US bank names, hedge funds and leveraged accounts active in Asia taking out stops below 98.00. The bank adds month-end exporter selling is also weighing on the spot. Now at 98.06 from the day's fresh one month low of 97.64, Citi says a close below the base of the Ichimoku cloud base at 97.50 would signal further downside ahead.

[Abo Abdullah]

Bank of America Merrill Lynch - USD Decline (Ex USD/JPY) In Its Final Stage; GBP/USD Up For A Sale

The decline in the US Dollar Index is drawing to a close, says Bank of America Merrill Lynch.

"The persistent intra-day, bullish momentum divergences say weakness should hold 81.40/50 (retracement support and the 200d average), with a break back above 82.41 confirming a base and resumption higher," BofA projects.
This potential bottom and turn higher in the USD, according to BofA, won't stop the ongoing decline in USD/JPY.
"We stay bearish USD/JPY targeting 93.65/93.73, potentially the larger range lows at 90.91 before renewed basing.

However, BofA alos thinks that such a USD turn should be an excellent shorting opportunity in GBP/USD as its corrective advance is in its final stages.
"Gains should fail to exceed 1.5438, worst case the 200d (1.5570) before the longer term bear trend resumes for 1.4783/1.4767 and below. An impulsive break of 1.5269 confirms a top and bear trend resumption," BofA projects.

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

EU still BULLISH

UBS Strategists, Gareth Berry and Geoffrey Yu take a technical perspective at today's EUR crosses.

Key quotes

“As the EUR/USD bull trend persists, indicated by the trending and momentum indicators pointing higher, focus is on further upside. Key resistance is at 1.3417. Support is at 1.3253 ahead of 1.3166, suggesting a bullish outlook” the analysts note.

[Abo Abdullah]

AUD/USD - Bid at .9200 from Australian accounts helping support the pair, but downside very vulnerable

EUR/USD - Sovereign bid noted near 1.3240; stops under 1.3200

USD/JPY - Downside back into focus as a US leveraged fund sells this pair; bids ahead of 97.50 but stops below in good size

[Abo Abdullah]

Standard Bank sees GBP/USD below 1.50 on BOE guidance

Standard Bank recommends selling cable at current levels on anticipation the Bank of England will take a harder stance on forward guidance, similar to the Fed’s. With the BOE meeting coming up on Thursday, they see the pair soon falling below 1.50.

[Abo Abdullah]

Gold market goes limp at 55-day moving average

Gold is suddenly out of the headlines just a week after a much-ballyhooed break of the 55-day moving average. The bullish break promised more volatility but instead gold has flatlined in a $30 range for the five sessions. Today, gold is down $2 to $1331.

Consolidations tend to continue in the direction of the previous move and that points to more gains for gold. A more conservative approach would be to wait for a breakout but it’s a challenge to draw a line in the sand. There is a rough wedge pattern on gold chart but a more conservative strategy would be to go with a break of $1350 or $1309.

[Abo Abdullah]

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

The following are the latest technical outlooks and strategies for EUR/USD, GBP/USD, USD/JPY and AUD/USD as provided by the technical strategy team at Barclays Capital:

EUR/USD: A small Doji pattern to end last week turns us short term neutral. We are ideally looking for topping signs ahead of trendline resistance at 1.3335 for a return to 1.3065. A break above 1.3335 however would warn of a short term extension towards 1.3420 (May peak). Support is at 1.3240.

USD/JPY: The move below 98.25 combined with the lack of intraday basing signs keeps us short term bearish. We expect a base later this week though for the time being, the risk is for a test of trendline support at 96.80 especially as the Nikkei continues to trade in a bearish manner. 98.35 is intraday resistance.

GBP/USD: The risk is for near term chop above the 60-day average at 1.5300 before a push towards the 1.55 handle. Such a move would provide a strategic selling opportunity for a return to 1.5000/30 area as the summer range extends.

AUD/USD: We are short term neutral, awaiting more meaningful direction. A break above 0.9350 is needed to propel the market higher for a return to 0.9605. Short term support is at 0.9125 below which we would turn bearish again, for a test of 0.9000.

[Abo Abdullah]

Greenback WEAKNESS not sustainable

Despite some assuring words from the Fed about keeping rates low for long, which is weighing on the US dollar, Capital Economics says eventually it's all about relative policy. Firm says the Fed is likely to become less accommodative "well before" other major central banks, expecting the ECB to cut its rate this year even if it doesn't happen this Thursday. It sees the BOE introducing forward guidance to keep rate expectations low. This all means weakness in other currencies while the dollar gets support from an improving US economy. CapEcon sees USD ending the year at Y105 from Y97.84 now, the euro falling to $1.25 from $1.326 and pound down to $1.50 from $1.54. (cynthia.lin at dowjones com; cynthialin_dj)

[Abo Abdullah]

Citibank - 5 Reasons Why Cable Is A Sell Ahead Of BoE, Fed And Data

GBP/USD is set to lose ground in coming days on the following 5 factors, projects.

First: Citi believes that the upcoming Fed and BoE meetings likely to underscore the diverging cyclical outlook between the US and the UK. "In particular, the BoE policy statement will reiterate the view that the ongoing recovery is weak by historical standards and that the MPC is on course to unveil details of its (aggressive) forward guidance policy next week. At the same time, we expect the FOMC statement to reiterate Fed’s data dependent stance and as such alleviate recent concerns about more aggressive rate guidance from here. This could mean that the GBP-USD rate spread could head further south and weigh on cable," Citi clarifies.

Second: looking at the data releases this week, Citi thinks that the upcoming US data – NFP and ISM manufacturing - could confirm market view that the cyclical recovery has regained momentum in Q3 after a soft patch in Q2 (US GDP numbers due out on Wednesday).

Third, Citi sees any potential positive surprises from the UK PMIs or housing market data this week need not support GBP on a sustained basis given that they will not remove the need for further policy action from here. In addition, Citi, projects that the BRC shop price index could extend its slide into negative territory recently this week, pointing at intensifying deflation pressures in the economy.

Fourth, Citi argues that some important downside risks for GBP could remain in place also going into the Inflation Report next week when the MPC is expected to unveil details about its forward guidance policy.

Finally, Citi suspects that investors would continue to speculate that, while QE and rate cuts may play a secondary role for now, the MPC may resort to a broader set of tools if the back up in short-term rates and bond yields resumes before long.

[Abo Abdullah]

Nomura - USD/JPY: Wave-IV Range Ahead Of New Lows: Levels & Targets

USD/JPY bear flag target of 97.65 has been achieve but this is not the terminal downside target for the Wave-C decline, notes Nomura.

So, where are the level and targets to watch for over the coming sessions?

On the downside, Nomura projects that the 1.618 extension target between (a) and (c) and the Wave-C triangle target align still lower at 95.60/40.

"For now a range-bound consolidation is expected ahead of new lows. Wave i*1.618 = wave iii and wave (a) =(c); this sets the stage for a wave-iv correction ahead of new lows," Nomura adds.

On the upside, Nomura sees the near-term resistance for an expected consolidation is 98.27 and 98.70 (the current 38.2% retracement level).

[Abo Abdullah]

HSBC - What Next For GBP/USD?: The One Chart That Says It All

Given the close correlation between movements in GBP/USD and shifts in relative interest rate expectations, the simplest assumption would be that the better UK growth is relative to the US, the higher GBP/USD would be, and vice versa. Right?

Not really, "it is not that straight-forward", says HSBC.

In the chart below, HSBC illustrates what they believe would be the likely reaction to developing economic news in the UK and US. HSBC examines various combinations of “good”, “bad”, “terrible” and “excellent” data releases. So they have the cyclical considerations, which are shown in our diagram with each quadrant given a lower case a,b,c,d.

Here are HSBC's findings:

a) Good US data, Bad UK data – GBP negative

b) Good US data, Good UK data – GBP negative

c) Bad US data, Good UK data – Neutral

d) Bad US data, Bad UK data – GBP positive .

"So in our inner cyclical quadrant of a, b, c, d we have GBP doing well in one out of the four cases. In other words even in a cyclical environment the odds seem stacked against GBP," HSBC finds outs.

Then HSBC moves to the more extreme outcomes where growth is not simply bad or good, but terrible or excellent: Here are those findings as well:

A) Excellent US data, Terrible UK data – GBP negative

B) Excellent US data, Excellent UK data – GBP positive

C) Terrible US data, Excellent UK data – GBP negative

D) Terrible US data, Terrible UK data – GBP negative

"In fact, our interpretation of different possible outcomes is that most of them point to downside risks for GBP-USD, with only a couple of instances arguing for GBP-USD gains...GBP-USD is likely to fall further," HSBC concludes.