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

[Abo Abdullah]

Barclays - Trades Of The Week: Sell AUD/USD & Buy EUR/GBP

Investors following short term macro strategies should consider selling AUD/USD and buying EUR/GBP this week, advises Barclays Capital in its weekly FX picks to clients.

Barclays' rationale behind the short AUD/USD trade is as follows:

"We remain medium-term bearish on AUD given the monetary policy outlook, currency valuation and lingering concerns about Chinese economic growth. The August RBA rate decision (Tue) and Statement on Monetary Policy (SoMP, Fri) are the most important events for the AUD this week. We forecast a 25bp rate cut to 2.50% (consensus: 2.50%) and expect the RBA to keep its easing bias in place. While the market is pricing 23bp of cuts for the meeting and almost 60bp of cuts to April 2014, the RBA is likely to reiterate its expectations of a weaker currency and downgrade its growth outlook in its SoMP."

Barclays' rationale behind the long EUR/GBP trade is as follows:

"We expect a formal unveiling of the BoE’s new forward rate guidance framework next Wednesday during the Inflation Report press conference. While the modalities of the framework are uncertain, we view guidance conditional on a threshold for an economic indicator, such as the unemployment rate as the most probable outcome. On the data front, the services PMI (Monday) is the key release and we expect it to reverse some of the gains made in previous months, looking for decline to 56.0 from 56.9 in June (consensus: 57.4). Overall we believe the risk to GBP from these events is tilted towards downside and we prefer expressing our view against EUR, to avoid exposure to broader move in USD."

[Abo Abdullah]

Credit Suisse - USD/JPY: Above 100.27 Needed To Begin A Bullish Tone; Stay Short For 97

USD/JPY has accelerated its recovery last week from support at 97.66/63, and the extension through 98.51 established a near-term base, notes Credit Suisse.

"This leaves the immediate focus higher in the converging range to 99.55, then 100.00/06. The bigger test remains at the converging range high at 100.27/46. We would expect selling here. Above is needed to signal a more sustained rally to 100.88 with the big barrier still at 101.54/61," CS projects.

"Support moves to 98.56/46, but removal of 97.66/58 is needed to see renewed weakness to 96.96/75 – the late June low and 61.8% retracement of the June/July rally," CS adds.

In line with view, CS advises clients to stay short the pair from 99.10, with a stop at 99.80, and a target at 97.

[Abo Abdullah]

New Zealand trade minister Groser: Says other countries may act on Fonterra powder

•Says Vietnam, Malaysia, Sri Lanka may take action
•Groser is speaking on New Zealand radio, comments reported on Bloomberg.

In response to: Block on New Zealand milk products – ban extended from China to Russia, Thailand

[Abo Abdullah]

U.S. State Department has extended embassy and consulate closures

The U.S. State Department said on Sunday that it has extended embassy and consulate closures in:
•Abu Dhabi, •Amman, •Cairo, •Riyadh, •Dhahran, •Jeddah, •Doha, •Dubai,
•Kuwait, •Manama, •Muscat, •Sanaa, •Tripoli, •Antanarivo, •Bujumbura,
•Djibouti, •Khartoum, •Kigali, •Port Louis

These embassy and consular posts will closed for normal operations Monday through Saturday

Acts of terrorism can result in a flight of capital to US assets and the US dollar, but lets hope these precautions taken by the US State Department head off any such acts.

[Abo Abdullah]

EU Techs 1.3200 SUPPORT

Friday saw rally begin from prior resistance now support at 1.32
Bulls remain in control while the 1.32 big figure holds on daily closes
200 week MA by June high at 1.34 is likely near term target
Weekly close above 200 week MA would be a bullish longer term sign

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

EU Jobs data supports but SELLERS topside


Despite all of the event risk last week - the EUR/USD ended the week unchanged
The disappointing US jobs data pushed the EUR/USD towards 1.3300 from 1.3190
Talk of very good selling interest between 1.3300/50 capped the rally
Hourly support levels found between 1.3265/75
Break below 1.3265 could see drift towards 1.3220/30 John.Noonan at thomsonreuters com

[Abo Abdullah]

Australian services PMI falls again

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

UBS FX Technical Report

EUR/USD – With the MACD above its zero line, signifying bullish conditions, potential remains for a fresh extension of the uptrend. We expect the pair to move towards 1.3345, the July extreme then test the critical resistance at 1.3417, the June 19 failure high. Near-term support is at 1.3190, the Friday low, ahead of the strong level at 1.3120, the 38% of the July advance, which is expected to hold any downside. No positions recommended.
USD/JPY – We continue to watch for a close above the key resistance at 100.02, the 62% retracement of the July sell-off. Such a development would see the MACD crossing above its zero line, signalling an outright bullish picture. The next resistance focus is at 101.53, the July high and then, 105.50, the 62% retracement of the June 2007 to October 2011 bull trade. We will recommend a new long on a close above 100.02, targeting 105.20, with stops initially at 97.50.

GBP/USD – On Friday the pair bounced sharply and tested the resistance offered by the 62% retracement of the latest sell-off at 1.5308. A closing break above this would trigger further upside to again challenge the 1.5394, the longer term retracement of the June-July decline, which was defended well on a closing basis last time. Support is at 1.5124, the 50% retracement of the July advance. No positions recommended.

USD/CHF – The sharp advance seen since Wednesday, to unwind the downside extremes, failed to extend further and the pair after posting a new recovery high, sold off sharply on Friday. With the MACD below its zero line, risk remains for a move below the first support at 0.9229, last week's low to test the significant June extreme at 0.9130. Resistance is at 0.9390, Friday high. No positions recommended.

AUD/USD – The pair has weakened further, extending the pattern of lower highs/lows. Continued downside is on the cards and potential is for a test of critical support at 0.8545, the 50% retracement of the October 2008 to July 2011 bull trade. We maintain our short recommendation established at 0.9240, targeting 0.8560. The stop remains just above the 50% retracement of the latest sell-off, however as a new low was posted this morning, this has been recalculated; now standing at 0.9100.

USD/CAD – After failing to close below the significant support at 1.0241, the 62% retracement of the May/July advance, the pair advanced since last Wednesday. Immediate resistance is at 1.0428, the 50% retracement of the July sell-off ahead of the higher 62% retracement point at 1.0470. A closing break above this would be a bullish development, indicating scope for further upside. No positions recommended.

EUR/CHF – After the sharp advance, the cross came under pressure from key resistance at 1.2404, the 62% retracement of the July sell-off. This weakness is again approaching critical support at 1.2313, the 62% retracement of the June/July advance, which was held on closing basis twice last week. A closing break below this would be negative, triggering further sell-off towards 1.2219, the June low. No positions recommended.

EUR/GBP – As a reaction to sharp advance, the cross is correcting to unwind the overextended upside conditions. Support is at 0.8649, the 62% retracement of the advance from July 23, which is expected to hold. We will look for opportunities to re-establish longs. With the bull trend intact we still believe the directional risk remains to the upside to test critical resistance at 0.8815, the February 25. No positions recommended yet.

EUR/JPY – We continue to watch for a closing cross higher in the momentum tools, to further strengthen the bullish themes as reflected by the MACD above its zero line. Such a signal would trigger further upside extending the pattern of higher highs/lows towards 133.80, the May high and then onto the critical 139.22, the June 2009 high. We will recommend a new long on a close above 131.70, targeting 139.00 and the stop at 128.80, just beneath the 50% retracement of the June/July advance.

[Abo Abdullah]

Westpac - NZD/USD: How Low Can It Go

Focus of the day:

"NZD/USD Outlook: Down this week

NZD/USD momentum has reversed, pointing to a test of the 2013 low of 0.7684 this week. Fed tapering fears have receded with the slightly dovish FOMC statement and weaker July payrolls, but NZD/USD has not benefitted. That may be partly due to the Fonterra dairy product recall, but NZD/USD started weakening last week even before the news broke, suggesting other factors at play.

For that reason, combined with the RBNZ’s tightening bias, we adopt only a cautious bearish stance towards NZD/USD, and require a break below 0.7685 to confirm to us that the NZD is indeed resuming its multi-month slide towards 0.7200."

Westpac Banking Group

[Abo Abdullah]

Goldman Sachs Euro Spot Trader

Fridays weaker NFP print helped sow some seeds of doubt about September tapering and saw the dollar generally weaken but also served to keep the EUR entrenched within its range. I was a bit surprised that rates markets reacted so powerfully to a slightly weaker print and assume it was probably a reflection of liquidity and positioning. I still feel more comfortable playing the dollar from the long side and in particular fading AUD rallies and selectively USDJPY dips but I have no inspiration regarding the EUR. EZ services PMI and US services ISM might garner some interest but are unlikely to create more than a ripple of movement. Look for support at 1.3230 and 1.3190 with resistance again at 1.3300 and last weeks 1.3345 high.

[Abo Abdullah]

JP Morgan - Stay Long USD Vs EUR & GBP

After the FOMC, ECB, and BoE meetings last week, USD bulls should keep the faith and maintain their USD longs against the EUR, and GBP, advises JP Morgan.

On the EUR/USD trade, JPM's rationale is as follows:
In line with view, JPM maintains the following long USD vs EUR structure via options: "Long a EUR/USD 2-mo 1.30-1.28 put spread, short a 1.34 call, RKI 1.36 from July 12. Cost 23bp. Worth -0.33%."

On the GBP/USD trade, JPM's rationale is as follows:
In line with view, JPM maintains the following long USD vs GBP structure via options: Long a GBP/USD 2-mo 1.50-1.48 put spread, short a 1.55 call, RKI 1.58 for 4bp. Net cost of 0.04% July 12, currently marked at -0.19%.

[Abo Abdullah]

EU TL & doji make 1.3300 elusive

Pair rejected o/n pre-TL from Feb high, doji now looks like a revesal signal
Good offers 1.3300/50, Asian sov, s-t spec & option related (1.3350 barrier)
Continued EUR/GBP sales weigh, puts 1.3220/30 sup in focus
If cleared next sup 1.3180/90 then 1.3160/65 (daily cloud top,late July lows)
Waning spread contraction & weekly/daily RSIs roll over will add weight
Bear view will grow if no 1.33 break soon,Chart:http://link.reut

[Abo Abdullah]

BofA Merrill - look For A Top In EUR/USD, & A Base In Gold...USD/JPY On The Edge

Bank of America Merrill Lunch continues to think that the USD is carving out a base, with a DXY daily close above 82.41 confirming a resumption of the larger bull trend.
"Our preferred currency shorts (against $ longs) remain £, AUD and SEK," BofA advises.
However, BofA also thinks that such a USD turn could be seen in a top in EUR/USD.
"In EUR/USD, we need to see a daily close below 1.3166 to confirm the top and turn lower (with targets seen to 1.2457 and below), while a break above trendline resistance at 1.3322 warns of stalling; our bearish view is invalidated only on close thru 1.3418," BofA clarifies.
In USD/JPY, BofA thinks that its bearish view is becoming perilously close to invalidation as the pair is on the edge of breaking higher.
"A daily CLOSE above trendline resistance at 100.10 would force us to turn bullish for the 101.54 July-07 high and, potentially, the larger range high of 103.74. TO BE CLEAR, WE REMAIN BEARISH AGAINST A DAILY CLOSE ABOVE 100.10," BofA adds.
Finally for Gold, BofA is looking for a base and resumption higher for 1420. "A close above 1322 confirms a return to trend," BofA projects.