WorldWideMarkets Community

Forex Trading, Market News & Technical Analysis

US FX Market Open – Friday, September 30, 2016: EUR/CHF rebound a standout in Europe

Posted by Marge Maresca on Sep 30, 2016 7:35:11 AM

 

 

eurchf828-1.png

Overnight Events

• USD/JPY +0.02%, EUR/USD -0.4%, GBP/USD -0.1%
• EUR/CHF rebounds from 1.0812 to 1.0907: SNB speculation
• Deutsche Bk shares down over 12% on the week before bounce
• Deutsche Bk 5-yr CDS jumps 21-bp to 255 from 234 Thurs cls
• DAX -1.23%, DXY +0.21%, Brent -1.75%, Iron -3.23%
• EUR/NOK drops under 9.00: 8.9830 13-mth low
• DE Aug Retail Sales 3.7% y/y vs -1.5% prev, 1.3% exp
• UK N/Wide Sept Hse Px 5.3% y/y vs 5.6% prev, 5.3% exp
• CH Sept KoF ind. 101.3 vs rvsd 99.7 prev, 100.8 exp
• UK Q2 GDP 2.1% y/y vs rvsd 1.9% prev, 2.2% exp
• UK Q2 C/A –GBP28.68 bln vs rvsd -26.99 bln, -30.50 bln exp
• EZ Sept Infl. 0.4% yh/y vs 0.2% prev, 0.4% exp
• EZ Aug Jobless Rate 10.1% vs 10.1% prev, 10.0% exp
• ECB Lautenschlaeger – No reason for more stimulus, must craft exit – BZ
• Jpn Aug core CPI -0.5% y/y, Tokyo Sept core -0.5% y/y, -0.4% eyed for both
• BoJ Sept 21 minutes some board members had doubts on policy overhaul
• Reuters poll – Japan fund managers up stock holdings in September to 37.4%
• UK Sept GfK consumer confidence index up to -1, Aug -7, -5 eyed.
• China’s property bubble and rising risks of more curbs – Reuters BUZZ
• China Sept Caixin mfg PMI 50.1, as eyed, Aug 50.0, orders edge up

Currency Summaries

EUR/USD   
• Weighed by broader risk averse sentiment/EU/DB banking woes
• Broke Thurs’ low and 100DMA 1.1197/84 for 1.1168 low today
• 200DMA next support to overcome at 1.1160
• Bears will be watching close in relation to daily cloud – 1.1215-1.1171
• Close below cloud opens scope to 21 Sep/31 Aug low 1.1123 support
• Today hi in Asia 1.1227, Kijun-sen 1.1232, Thur/Tue’ highs 1.1250/59
• EUR 2.4bln expiries 1.1200-50 add to resistance today
 
USD/JPY  
• USD/JPY in Asia surged to 101.80 on Japanese bank buy
• Spot faltered from 101.80 when flow finished
• Fell to hit hit 100.75 in Ldn, before recovering back above 101.00
• Recovery moves likely to falter, however, due to series of Fibo levels
• 101.28/40/55 - 50%/61.8%/76.4% of 101.80 to 100.75 fall - weighs
• USD/JPY cut expiries @ 100.00 (652M), 101.00 (730M)
• Deutche Bank woes weighs on cross, safe haven flows into euro from yen
• EUR/JPY dropped from 114.14 to 112.60, stops below this week's 112.25 low

EUR/CHF
• Good CHF demand and EUR/CHF taken below daily cloud base @ 1.0817
• Subsequent rebound smacked of SNB: 1.0827-1.0907: Chart: http://reut.rs/2dwp7X3
• Risk appetite fading somewhat as DB concerns build: OPEC uncertainty too
• Can't ignore U.S congress decision to allow court action over 9/11 either
• Global backdrop driving flow to safety: Sept KoF stronger too at 101.3
• SNB may have seen risk of bigger safety flow as cross neared 1.0800
• USD/CHF bounce took some bearish heat out of EUR/CHF before rally
• Spot climbs to 0.9770 from 0.9640 Thurs low

GBP/USD  
• GBP/USD met headwind pre-1.30 after rising on decent UK data at 4.30am ET
• UK service sector grew 0.4% in July, UK Q2 C/A deficit smaller than expected
• Good size 1.3000 option expiry for month-end NY cut. 1.2936 = early Ldn low
• Early Ldn low plumbed amid risk aversion on worries about Deutsche Bank
• EUR/GBP has dropped to threaten 0.8600 as quarter-end looms
• Cross could be volatile around 11am ET (Ldn fix) re: possible EU payment flow
 
USD/CAD  
• USD/CAD topped out 5 pips pre-1.32 after early Europe gains on risk aversion
• 1.3167 was Asia high. WTI oil dropped to threaten 47.00 during European am
• Canada July GDP data due 8.30am ET. Growth of 0.3% is consensus expectation

AUD/USD      
• AUD/USD elicited support circa 0.7589 early Europe after sliding on risk aversion
• 0.7589 = 55DMA. 0.7615-0.7637 was Asia range. Dalian iron ore closed -3.2% Friday
• Stops tipped below 0.7570 (0.7573 = Sept 19 high) & 0.7550
• RBA seen on hold next week. 11 of 57 economists tip Nov cut-Reuters poll
 
NZD/USD
• NZD/USD elicited support pre-0.7221 in Asia after sliding on risk aversion
• 0.7279 = subsequent rally high. 0.7221 was Monday low. 0.7200 support below

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)

• Broad risk averse demand for vols in early London on EU bank woes
• 1wk vols already marked up as expiry rolls over Oct NFP next Friday
• EUR/USD 1mth paid 7.1 from 6.5 y/day. Cable 1mth 9.15 vs 8.6
• 1mth AUD up 1.0 after test on 2yr low 9.15 Thur. NZD 1mth 10.8 vs 10.0
• USD/JPY 1mth 11.3 vs 10.6 y/day (9.8-10.6 Wed/Thur on BoJ capture)
• Little expected from Nov BoJ – 1mth 11.0 to 15.0 when capturing Sept BoJ

Looking Ahead - Economic Data (GMT) - (Source:ThompsonReuters)

• 08:30 CA Jul GDP mkt 0.3% m/m, 0.6% prev
• 08:30 CA Aug Prod Prices mkt 0.1% m/m , 0.2% prev
• 08:30 CA Aug Prod Prices y/y prev -1.3%
• 08:30 Personal Inc Aug mkt +0.2% m/m, prev +0.4%
• 08:30 Consumption Exp Aug mkt +0.1% m/m, prev +0.3%
• 08:30 PCE Deflator Aug prev 0.0% m/m
• 08:30 Core PCE Deflator Aug prev +0.1% m/m, +1.6% y/y
• 09:45 Chicago PMI Sep mkt 52.0, prev 51.5
• 10:00 U of Mich Cons Sent Idx Sep mkt 90.0, prev 89.8
• 10:00 Current Conditions Sep mkt 104.0, prev 103.5
• 10:00 Expectations Sep mkt 81.0, prev 81.1
• 13:00 Baker-Hughes Rig Count prev 418, +2
• 13:00 Dallas Fed Trimmed Mean PCE prev +0.8% y/y

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

• 15:45 FedTrade ops 30-yr Fannie Mae/Freddie Mac max $2.775 bln
• 17:00 FRB Dallas's Kaplan (2017 voter, centrist) in moderated Q&A

 

Topics: US FX Market Open

 

Tools & Educational Resources

Forex 101LEARN MORE >>
Learn the basics of Forex and how to practice trading the markets.

GlossaryLEARN MORE >>
Confused by the language? Click here and search for key trading terms.

FAQ CenterLEARN MORE >>
Browse our frequently asked questions and find your answers right away.

VideosLEARN MORE >>
Access to the educational lessons, webinars and platform walkthroughs.

READY TO TRY THE MARKETS?

Get started with a FREE $10,000 Demo Account and experience the Forex Market RISK FREE!