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US FX Market Open – Friday, January 13, 2017: USD weekly charts point to more losses

Posted by Marge Maresca on Jan 13, 2017 7:42:28 AM

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Overnight Events

• USD/JPY -0.15%, EUR/USD +0.4%, GBP/USD +0.4%
• DXY -0.25%, DAX +0.55%, Brent -0.85%, Irin +0.15%, Gold +0.17%
• DE Dec W/Sale price index 2.8% vs 0.8% prev
• US banks ready bond issuance flood after earnings – IFR
• UK by-election in pipeline after another opposition Labour MP quits: Tristram Hunt
• Lipper – US inv-grade bond fund inflows biggest in nearly two years
• Japan FinMin Aso – Can’t comment on Trump border tax idea – Nikkei
• EconMin Ishihara – Watching closely for rapid JPY rises – Rtrs
• Just the facts: Japan seeks way out of Trump’s bad books on trade – Rtrs
• BoJ Insight: Worry over Trump disappointment hit to stocks, USD – MNI
• As global headwinds blow, Japan’s conglomerates think local – Nikkei
• PBOC said to boost CNY curbs as banks told to balance flow – Bloomberg
• Auckland euro debut with E500 mln 10-year via USB, Westpac et al – IFR
• Malaysia's cb saidt may adopt additional measures to deal with volatility in fx mkts if necessary

Currency Summaries

EUR/USD  
• EUR/USD creeps up in Europe reaching 1.0654 from 1.0615
• Momentum rests with bulls, potential to retest 1.0700 area
• Gains over 55-DMA 1.0646 have proved unsustainable (close below Jan 12)
• US retail sales look key today, control forecast 0.4%
• Masses of option expiries should have an anchoring effect
• EUR 3.6bln @ 1.0600 stand out, but EUR 7.8bln between 1.0550-1.0700
• Heavy offers ahead Dec 30 high 1.0700. 1.0707 38.2% Nov/Jan drop. Stops over

USD/JPY  
• Offered in London hitting 114.52, falling from 115.19 Asia high
• Recall Japanese importers bought up pair from 113.75 low in late Asia on Thu
• Japanese importers will still buy going forward, few fwd hedges
• Stops likely clustered below 113.75
• Large NY Cut Exps: 113.50 (1.2B), 115.00 (2B), 115.35-50 (1B), 116.00 (1.7B)

USD/CHF
• Dollar struggling to get back on-side after Trump policy fall-out
• Move down in USD/CHF is looking overdone but offer is holding
• Key supp. 1.0057 Thurs low, 1.0047 30DMA Bolli and 1.0025 Dec 30 low
• Techs are near o/s and daily cloud starts to thicken and rise from Jan 18
• Would look at a bid ahead of the Bolli for 1.0240 with 1.0010 stop/reverse
• Chart: http://reut.rs/2iO4w2S

GBP/USD
• GBP/USD vaulted 1.22 after hawkish comments from MPC’s Saunders at 4.30am
• 1.2230 = European am high. Cable rose to threaten 1.22 before Saunders spoke
• 1.2141 was Asia low. Half-yard 1.2200 & 1.2180 option expiries for NY cut
• EUR/GBP fell to 0.8709 after hawkish steer from MPC newbie Saunders
• Saunders said monetary policy implications “obvious” if pay gives “clear warning signs”
• 0.8747 was early Europe high. 0.8747 was also Thursday’s high

USD/CAD
• USD/CAD mooted offers near 1.32 are appreciation obstacle beyond 1.3168
• 1.3168 = Asia high. 1.3193 = 61.8% of 1.3295 (Wednesday high) to 1.3028
• Huge 1.3300 option expiry for NY cut, $2.34bln strike. 1.3128 = intra-day low
• Key support 1.3000 (option barrier level). 1.3005 = Q4 low (Oct 19)

AUD/USD     
• AUD/USD met fresh headwind above 0.75 during the European am
• 0.7507 = European am high. 0.7508 = Asia high. 0.7519 was Thursday’s high
• Stops tipped above 0.7525 (Dec 14 high)

NZD/USD
• NZD/USD based at 0.7086 in Asia after retreating from 0.7144
• 0.7144 was Thursday’s 1mth high. 0.7148 = 100DMA. 0.7131 = European am high

Today’s events

An expiring FX option heading into the New York Cut, if close enough to the strike price, can act as a magnet for selling/buying.  If the option is large, it can generate enough trading to move the market.  

Option Expirations(Source:ThompsonReuters)

• Vols G10 mostly under pressure today aside from GBP related
• Brexit risk/May speech Tues’ boosts GBP gamma demand
• EUR/USD vols wane – new 2017 lows, but 1wk propped by ECB
• USD/JPY vol setbacks limited after recent spot volatility
• Biggest EUR expiries are at 1.0600 and USD/JPY 115.00 today

Economic Data (GMT) - (Source:ThompsonReuters)

• 13:30  Retail Sales Dec mkt +0.7% m/m, prev +0.1%
• 13:30  Retail Sales Ex-Autos Dec mkt +0.5% m/m, prev +0.2%
• 13:30  Control Group Retail Sales Dec mkt +0.4% m/m, prev +0.1%
• 13:30  PPI Final Demand Dec mkt  +1.6% y/y; prev +1.2%
• 13:30  Core PPI Final Demand Dec mkt +1.5% y/y; prev +1.6%
• 15:00  U of Michigan Cons Sent Idx prelim Jan mkt 98.5, prelim 98.2
• 15:00  U of Mich Curr Cond Idx prelim Jan mkt 111.5, prev 111.9
• 15:00  U of Mich Expectations Idx prelim Jan mkt 90.2, prev 89.5
• 15:00  Business Inventories Nov mkt +0.3% m/m, prev -0.2%
• 18:00  Baker-Hughes Oil Rig Count prev 529, +14 vs same week 2016

Events, Other Releases (GMT) - (Source:ThompsonReuters)

• 14:30  FRB Philadelphia's Harker on econ mobility; Philadelphia, PA
• 16:45  FedTrade ops 15-yr Fannie Mae/Freddie Mac max $775 mln

 

Topics: US FX Market Open

 

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