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

[Abo Abdullah]

Is Everyone Betting Against This In EUR/USD

It's not a big surprise to see major banks crowded in the short EUR/USD trade over and over but what is really interesting this time is how they seem to bet against the same level where their stops are placed around.

That is the 1.3418 June-19 high which Bank of of America Merrill Lynch sees as a 'line in the sand' where its break would force BofA to abandon its bearish view and turn neutral.

In line with this view, BofA maintains a technical tactical short EUR/USD position from 1.3355, with a stop at 1.3420, and a target at 1.2821.

Same for Commerzbank who thinks that as EUR/USD has stalled below the June high at 1.3418, there is little to suggest that the market will maintain a break beyond here,

In line with this view, CB maintains a short EUR/USD from 1.3383 with a stop at 1.3425 and a target at 1.3190.

And same also for Credit Suisse who maintains its short EUR/USD position from 1.3300, with a stop at 1.3435, and a target at 1.3025.

Even Barclays Capital who is running a macro EUR/USD short trade is also betting against this level with a stop at 1.3430, and a target at 1.28.

Putting all together, if the stops around this level get triggered, a quick move to 1.35 will be there before all is said and done.

[Abo Abdullah]

Erste Group - Trends & Levels For EUR/USD, EUR/JPY, & EUR/CHF

The following are the trends and levels for EUR/USD, EUR/JPY, and EUR/CHF as provided by the technical strategy team at Erste Group.

[Abo Abdullah]

USD/JPY working through the corporate offers at 98.20; decent supply at 98.50/60 and should cap the rally intraday

Sovereign accounts seen taking profit in EUR/USD; this is supporting the pair a bit, but stops sub-1.3250 still look vulnerable

USD/CHF - demand from leveraged names and model funds cleared stops above 0.93 and pushed the pair right into 0.9330 offers; more supply now seen at 0.9350

[Abo Abdullah]

Goldman Sachs FX Desk Report

Summary of our Traders’ Strategies:
•EUR: We maintain the view that being short on rallies leaning against the June FOMC highs (1.3418) is pretty good risk reward
•JPY: We still hold a bias to be long USDJPY, but we are mindful of the range bound summer markets and given the 150 pip move off the lows, we have lightened up our position
•GBP: We look to fade a firmer print (anything on 1.5500 handle risking 1.5580) to position ourselves for tomorrows minutes
•AUD: The market remains fairly uninterested at current levels waiting for the start of September
•CHF: We’ve moved away from the 200 DMA which has now crept up to 1.2260 and being long against it still looks decent risk/reward

EUR

The Euro holds the right levels below as we touch 1.3277 lows before rebounding back above the figure. The ZEW out later this morning will offer some guidance ahead of the GDP prints out tomorrow – US retail sales need to be navigated first though. UST 10yrs trade heavy again as the idea of Summers succeeding Bernanke picks up traction and having drifted through 2.56% in yield terms yesterday afternoon we are back at 2.64% now. Pulling the other way, we have peripheral spreads tightening (Italy/Germany 10yr back to tightest level since Summer 2011) and the market still unsure about the tapering timeline whilst tier 1 data remains at a premium. 1.3330/40 houses the first of the stops rolled down from 1.3405/20 and we maintain the view that being short on rallies leaning against the June FOMC highs (1.3418) is pretty good risk reward.

JPY
Well sometimes it can be that easy, with price action yesterday giving us all the insight we needed following a weaker than expected Japanese GDP printed – the interest to the downside had become exhausted, with 95.80 now the line in the sand. Finally a decent session in the Nikkei overnight, following last week’s dismal performance, as fresh talk of supplementary measures to be introduced by Abe’s administration as a concession to the consumption tax issue – on this occasion the chatter surrounds corporate tax incentives – we feel these concessions may come in the form of a supplementary budget, in conjunction with Corp Capex tax incentives, which should prove favourable to the foreign investor. Either way this, combined with the sell off in US 10 yrs, was enough of a catalyst to take a cleaner market place through the 97.00 level and trigger stops through 97.20, halting short of the pivotal level at 97.60-70 – end of July lows. We still hold a bias to be long USDJPY, but we are mindful of the range bound summer markets and given the 150 pip move off the lows, we have lightened up our position ahead of this said resistance – looking to add on dips towards 97.20 or a break of 97.70.

GBP
CPI today to which they market reaction will be interesting to ascertain if indeed there is focus on whether or not the BOE inflation knockout is of concern but our view is there is more than enough wiggle room for it not to matter at least not yet and as such we look to fade a firmer print (anything on 1.5500 handle risking 1.5580) to position ourselves for tomorrows minutes where we think the probability of rate cuts having been discussed are not really priced at current levels. Likewise tomorrows UE data will have renewed focus - and as I pointed out yesterday, lot of suggestion in weekend press we could see a tick up towards 7.9%, potentially even 8% given the volatility in the numbers. Positioning is exceptionally light in GBP now so the risk reward looks attractive especially with the dollar looking like it has based elsewhere and a market that isn't focused for now.

AUD
NAB continues to paint a subdued picture of the non-mining sector with business confidence falling to an 8 month low. The survey was taken before the latest rate cut and communications from the RBA but still shows no signs of improvement in light of the previous easing and fall in the AUD. By Stevens own admission confidence remains key to the RBA’s decision function and today’s number will do little to reassure them that their easing cycle is fully transmitting yet. Elsewhere the PEFO provided little new information from what we have already heard this month. AUD has struggled overnight in light of the data with 0.9100 lows but fairly muted franchise participation. Talk of notable real money demand has subsided which combined with the data the reason for the retrace. In general as we said yesterday the market remains fairly uninterested at current levels waiting for the start of September. Remain sidelined for now with levels to watch: 0.9100 and 0.9080 below with 0.9221 above the first real resistance.

CHF
Little to get excited about in Swiss space – over the weekend SNB’s Danthine explicitly laid out what I think most the market already assumed – that the central bank will abolish its Franc ceiling once it starts raising interest rates. This cements what the market knows – interest rates are going to stay low for the foreseeable future and that the SNB are in holding pattern until further notice. EURCHF still holds in OK – we’ve moved away from the 200 DMA which has now crept up to 1.2260 and being long against it still looks decent risk/reward especially if you look at the European fixed income side of the equation. USDCHF should run up into resistance around 0.9290/0.9300 with 0.9330/40 still the topside pivot from a few weeks back – 0.9230/40 now support on the run down to 0.9170.

[Abo Abdullah]

Morgan Stanley on USD/JPY

Market talks of good sized Usd/Jpy strikes rolling off this Friday between 97.10 - 98.1097.10 - $2.5 yards 97.50 - $1.9 yards 98.10 - $3.8 yards. I also hear of decent offers 97.90-98.10 ahead of technical resistance at 98.20. These offers, coupled with expiries suggest further Jpy weakness this side of the weekend may well be limited. FX Strategy are also reluctant to buy into this Usd/Jpy rally. They are of the opinion that while the positive equity market reaction to Abe’s proposed corporate tax rate cut has proved Usd/Jpy supportive, they doubt that this will last. Japan’s corporate savings are already too high and they doubt there will be much of an economy-boosting effect on the back of these measures. Moreover, monetary velocity remains soft – until this turns around, they will trade Jpy from the long side with a stop at 98.60

[Abo Abdullah]

UBS Daily FX Report

FX Technicals

EUR/USD- BULLISH Risk remains for a short-term correction from the key resistance at 1.3417. Support is at 1.3270. A break above 1.3417 would be positive.

USD/JPY- BEARISH With the MACD below its zero line, focus is on further downside, with critical support at 93.57. Resistance is at 97.88 ahead of 99.95.

GBP/USD- BULLISH Any downside will be limited, with a strong support at 1.5394. Key resistance is at 1.5598. A closing break above this would trigger further upside towards 1.5782.

USD/CHF- BEARISH Yesterday the pair, tested the key resistance at 0.9283, but failed to close above it. Risk remains for a rejection from here. Support is at 0.9175 ahead of 0.9130.

AUD/USD- BEARISH Upside should be limited with a strong resistance at 0.9320. The risk is for resumption of downside from here. Support is at 0.9035 ahead of 0.8848.

USD/CAD- NEUTRAL There is a strong support at 1.0241. A closing break below this would be negative. Resistance is at 1.0361 ahead of 1.0445.

EUR/CHF - BEARISH With the trending tools pointing lower potential remains for further downside. Support is at 1.2268 ahead of 1.2219. Upside should be limited with a strong resistance is at 1.2348.

EUR/GBP- BULLISH There is a strong support at 0.8584, which was tested again yesterday but held on closing basis. With the bull trend intact potential is for a move above 0.8674 to test the critical resistance at 0.8815.
EURJPY NEUTRAL Support focus is at 127.94. A closing break below this would confirm the settlement of MACD below its zero line. Resistance is at 129.80 ahead of 131.98.

*NOTE: The trend for each currency pair as defined above is determined by UBS proprietary model and is independent of its discretionary interpretation of price action

[Abo Abdullah]

Asian account buying in EUR/USD help keep the pair away from the stops below 1.3250 for now

GBP/USD – Demand at 1.5430 through 1.5420 may help hold back downward moves, but a break below there will bring in both system and technical selling

AUD/USD weakens on broad USD strength and puts stops under .9090 - .9080 under pressure. Bids at .9100 help hold back the drop, but no other significant demand until .9050 through .9040

Stops in EUR/GBP below .8580 being threatened as EUR weakens across the board

USD rallying across the board as US yields on the rise as well

AUD/USD - sizeable stops under 0.9090 threatened,larger bids then at 0.9050

[Abo Abdullah]

EUR/USD

[Abo Abdullah]

Bank of America Merrill - Stay Bullish USD Vs EUR, GBP, CHF, & Get Ready For Gold Breakout

Bank of America Merrill has been and remains bullish USD, having recommended going its recent short EUR/USD trade

However, BofA also think the US Dollar is poised to resume its bull trends against the CHF and GBP, particularly as the USD Index is reversing from 2yr channel support at (80.89).

"A daily close above the 200d (now 81.59) provides further bullish evidence, with a close above 82.41 confirming. For $/CHF a close above 0.9335, accompanied buy a €/CHF close above 2.5m trendline resistance (1.2373) confirms a CHF sell off for 0.9806 and 1.2650, respectively," BofA clarifies.

"Cable bears need a break of 1.5438 support to indicate a top and resumption lower, with a close below 1.5206 confirming. Downside targets are seen to 1.4783/67 and eventually 1.4228," BofA adds.

Along with that, BofA thinks that Gold bullish breakout is in the making with the recent break of 1326, trendline resistance confirms a resumption of the larger bull trend.

"Initial upside targets are seen to 1407/08 (6m channel resistance) and potentially 1450 (swing target)," BofA projects.

[Abo Abdullah]

AUD/USD clears stops through .9090; some stops still left sub-.9080

EUR/USD – Stops triggered under 1.3250 and sentimental bias shifting to the downside. More stops noted below 1.3230 with demand into 1.3200

Gold remaining strong the face of USD strength; dealers noting this strength and feeling that the correlation may be breaking down

[Abo Abdullah]

How Much Is The Full Taper Worth? - Deutsche Bank

Focus of the day:

"How much is the full taper worth? We think anywhere from 15 to 50 bps in ten-year yields, depending on how aggressive the Fed gets. A December taper of reducing monthly purchases by $20 billion and gradually down to zero by September 2014 would drive yields higher by 13 bps, while a hard exit from QE next month would warrant a 56 bps sell-off in 10s. The intermediate case, which we judge at the moment to be a September taper of $20 billion and ending QE by June 2014, is worth about 30 bps. Since the market generally looks 9-10 months ahead when discounting the Fed, the 50 bps sell-off since mid June should mean that a “baseline” taper has already been priced. This leaves us a fair value of 2.50 percent for 10s, and a band of 20-25 bps on either side in which the market trades as it assigns new probability to the various taper scenarios."

Dominic Konstam, Aleksandar Kocic, Alex Li, Stuart Sparks, Daniel Sorid, & Steven Zeng - Deutsche Bank

[Abo Abdullah]

USD/JPY – Stops above 98.30 with offers note until 98.50 through 98.60

[Abo Abdullah]

SEB - Intraday Outlooks For EUR/USD, USD/JPY, EUR/GBP & SP500

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

EUR/USD: Downside attention still justified. Another moderate euro-loser was added yesterday. The micro-term move off yesterday's low looks correctional and back under 1.3289 would indicate extension beyond yesterday's low and set focus on the 21day equilibrium, now at 1.3225 and further down the Aug2 low of 1.3188.
USD/JPY: Testing resistance starting at 97.60. Yesterday's bullish candle feeds into today. The Jul31 low of 97.59 represents the lower end of a short-term resistance zone, stretching up to 98.95 – over which an even more important ref at 99.96 would come into focus.
EUR/GBP: Buyers respond at support. The high-0.85s seem to attract buyers and yesterday's candle is another indication of this. Over 0.8623 would lift attention to dynamic resistance at Fibo-adjusted dynamic resistance at 0.8660\75. Also over 0.8731 is however needed to pencil in fresh summer highs (>0.8770).
S&P 500: Another buyers’ response noted. The sub-1,680 did not result in an immediate <1,670 test. Buyers instead responded quickly to the intraday dip and closed the market high in range. Yesterday's low may well mark the low in a minor correctional three-wave sequence. Violation back over 1,696 is however needed to fully confirm this and argue for fresh >1,705 highs. (Medium- & long-term conditions are much stretched and needs to vent this through a more pronounced consolidation/correction lower).

[Abo Abdullah]

EUR/USD – Banks , leveraged accounts and real money noted Start demand building at 1.32200/10 in good size

[Abo Abdullah]

Repetition
Valid Till : 18.00 GMT

EUR/USD – Banks , leveraged accounts and real money noted Start demand building at 1.32200/10 in good size