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

[Abo Abdullah]

Bank of America Merrill Lynch - USD Index Set To Base; AUD, & GBP Vulnerable To A USD Turn

The decline in the US Dollar Index is drawing to a close with strong technical signs that the a base may already be in place, says Bank of America Merrill Lynch.

"The persistent 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.

On such a USD turn, BofA thinks that GBP and AUD will be particularly vulnerable.

On GBP/USD, BofA sees its ongoing impulsive break of 1.5264 confirms a top and bear trend resumption for 1.4783/1.4767 and below.

"EUR/GBP is supportive of £ underperformance as the cross continues to track higher for 0.8806/15, following the test and hold of the 3m Head and Shoulders base neckline (now 0.8563)," BofA adds.

Finally, BofA believes that the AUD/USD corrective consolidation of the past 2 weeks looks to have run its course.

"A break of 0.8998 confirms a return to trend, targeting the 100m at 0.8875, before 0.8770 and then the 0.8660/0.8546 zone (look for greater signs of basing into this latter zone). Big picture, however, AUD/$ remains in a long-term downtrend for 0.8066/0.7942," BofA projects.

[Abo Abdullah]

USD starting to become offered across the board, could continue into the London fix (12pm ET)

Macro account noted buying EUR/USD

Sovereign account was a noted large buyer of EUR/AUD earlier in this session

Momentum funds looking to buy USD/JPY if it moves above 98.50

EUR/USD - US account offers at 1.3290 and broad selling interest still strong into 1.3300

Demand stays constant for EUR/AUD and EUR/GBP

[Abo Abdullah]

AUD/USD - Barrier at .8900 and protective bids in front may provide strong support for this pair, but pushing below .8940 will help provide a very bearish case for this pair all around

EUR/AUD continues to see buying as well, helping push EUR/USD into sovereign offers at 1.3300; stops above 1.3310 in good size

EUR/JPY buying from a US macro account still continues, helping EUR/USD approach 1.3300 where offers in good size are resting

EUR/GBP long positions accumulated into the fix are now being closed out

Goldman Sachs notes to customers their view that Fed tapering will begin in September

US names still looking to buy USD/JPY on dips
With the London fix now out of the way, interest to sell USD likely to drop

EUR continuing to be well-bid across the board as a macro account is now reported buying EUR/JPY

Leveraged fund noted seller of gold as it broke the lows; talk of stops under 1300

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

USD Bulls COVER lack follow through pre FED

10 DMA pierced but little follow through keeps touted 1.3200 stops safe
EUR/GBP demand aids to halt slide, s-t USD bulls scramble to cover
Macro buys EUR/USD & talk of USD selling for WMR boost pair to 1.3265
Positions being pared back ahead of Fed, mkt will assess views post-Fed
NY reports offers lined up above 1.3290 for now

[Abo Abdullah]

Credit Suisse - Reversed Long EUR/USD Into Short At 1.3300

Credit Suisse booked profit on its long EUR/USD from 1.3035 by reversing into short at 1.3300, with a stop at 1.3435.

"EUR/USD has again managed to find support at minor trendline support, which keeps the immediate bias still higher," CS says.

"With the 1.3418 June peak not far above, and with momentum now beginning to deteriorate, we look for a cap here, and a turn lower in the range. Below 1.3234 looks to 1.3166, and through here would see a near-term top, and a more extended turn lower to 1.3093/82," CS adds as a rationale behind this call.

[Abo Abdullah]

EU Fund demand puts STOPS in focus


Earlier US funds demand for EUR/GBP wanes, now switches to EUR/JPY & EUR/AUD
Give EUR/USD a lift back to highs & working through sov offers ahead of 1.3300
Some light stops above 1.3300, large noted above 1.3310, more at 1.3320
CTAs are touted to be buyers on clear break above 1.3300
If no pullback market may run those stops to clear risk ahead of FOMC

[Abo Abdullah]

BofA Merrill - EUR/USD: Sell The Rallies After The Dust Settles

Once the dust settles after this week's risk events, resume selling the rallies in EUR/USD, advises Bank of America Merrill Lynch.

"Despite having flagged the recent euro appreciation, we remain bearish on the currency. Inflation expectations are well below the ECB’s “slightly below 2 percent” target. The credit crunch in a number of countries continues. Bank deleveraging is likely to continue ahead of and after the asset quality assessment in early 2014. The periphery remains fragile, while its recovery prospects are questionable.," BofA argues.

"Moreover, the US economy continues performing well, which makes Fed tapering an issue of “when,” rather than “if.” Indeed, we have recently argued that monetary conditions remain tight in the Eurozone and have advised investors to sell euro rallies resulting from Fed-triggered increase in borrowing costs, BofA advises.

"We therefore continue expecting the euro at 1.25 by the end of this year and 1.22 by the end of 2014," BofA projects.

[Abo Abdullah]

EUR/USD –leveraged accounts and Real money noted Start offers building at 1.3340/50 in good size

[Abo Abdullah]

EUR/USD - Large stops above 1.3310 getting cleared late in the session

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

EU Knee jerk to Trend Line

Not much new but Fed tip to inflation consistently below 2% weakens USD initially
EUR/USD spikes up, runs 1.3310 & 1.3320 stops, halts on cue at trend resistance
All knee-jerk gains now quickly erased as corp offers too much to overcome
Daily close near current levels is a massive doji on dailies & says indecision
Mkt may stay in choppy range until ECB & NFP

[Abo Abdullah]

Repetition
Valid Till : 23.00 GMT
EUR/USD –leveraged accounts and Real money noted Start offers building at 1.3340/50 in good size

[Abo Abdullah]

Deutsche Bank - Why August Is The Time To Re-Build USD Longs

Deutsche Bank's positive dollar view has been driven by two factors over the course of the year. First, the re-pricing of the Fed. The market was pricing a rate path that was even more dovish than the FOMC's own projections at the beginning of the year. This has now corrected, with June 2016 Fed funds inside the 1.3-1.8% range of dovish Fed Taylor rules. Second, flows. While US portfolio inflows remain weak, the big driver has been a surge in shortterm flows, a combination of cash, hedging and speculative activity.

Looking ahead to H2, DB advises its clients to get ready to rebuild their USD longs in August as both Fed pricing and flow are about to provide further fuel to keep the USD bullish view on track.

"On the Fed, the risks seem to be skewed towards the market shifting towards a more aggressive Fed fund path driven by what we expect to be a GDP growth acceleration to 3%, speculation around a potential Summers chairmanship aside. Subsiding fiscal drag and very positive data seasonality into September should help," DB projects.

"On flows, the drivers need to rotate away from short-term inflow to medium-term buying of bonds and equities. The pattern is already reflected in mutual fund data, with highyield US credit beginning to see a recovery while EM outflows persist, but this needs to continue," DB adds.

"Despite the summer pause, we therefore still like owning dollars with a mix of G10 (JPY, GBP, AUD) and EM (TRY, MYR, BRL) shorts being our favorites...With seasonality turning particularly positive in coming weeks, investors should think hard before leaving for the summer holidays with flat dollar risk," DB advises.

[Abo Abdullah]

Commerzbank - USD/JPY Sits At The Base Of The Cloud; Stay Short For 95

USD/JPY continues to sit at the base of its cloud, suggesting a failure at current levels, notes Commerzbank.

"Failure at the base of the cloud will leave the market under pressure and likely to slide back to 96.75/95.40 en route to the 93.75 recent low. It is vulnerable to further losses," CB clarifies.

"Rallies are likely to find initial resistance at 99.25/35 ahead of the 100.61 resistance line,"CB adds.

In line with this view, CB advises clients to stay tactically short USD/JPY targeting 95.00 with a stop at 100.65, and to add to this short on a bounce into 100.00.