Global Markets: 

  • Asian stock markets: Nikkei up 1.50 %, Hang Seng gained 0.45 %, ASX fell 0.40 %, Shanghai closed for a holiday
  • Commodities: Gold at $1188 (-0.40 %), Silver at $16.77 (-0.30 %), Crude Oil at $89.67 (-0.10 %)
  • Rates: US 10 year yield at 2.44 

News & Data: 

  • Australia Inflation Gauge 0.1 %, Previous: 0.0 % 

CFTC Positioning Data: 

  • EUR net short 137k vs net short 142k prior
  • JPY net short 121k vs net short 105k prior
  • GBP net long 3k vs net short 1k prior
  • AUD net short 2k vs net long 8k prior
  • CAD net short 3k vs net long 3k prior
  • CHF net short 12.5k vs net short 14k prior
  • NZD flat vs net long 2k prior

 

FX Overview: 

The new trading week started quietly with volumes rather light in FX. In equities, the major Asian indices are slightly higher on the day, inspired by US gains on Friday, while Shanghai remains closed for a Chinese national holiday. Commodities are under pressure amid broad USD strength, with Gold now near the 2013 low of $1180. Silver is also trading at fresh multi-year lows and there is little support seen until the $15.00 area.

EUR/USD traded in a 1.2505-21 range overnight and there is talk of barrier option being defended at 1.25. Failure to take the level out soon will probably lead to a smaller short squeeze, but the topside should be capped at 1.2580/1.26 in the near-term, where good offers are resting. GBP/USD bounced off 1.5940, reaching a high of 1.5985 overnight. Offers noted at 1.6020, with 1.6060 being now the key short-term resistance level.

USD/JPY fell overnight, but flows were light. Dealers expect to see good bids towards 109.20, while offers remain heavy above 110.00. Intraday stops noted through 109.10 and in better size around 108.80/90. EUR/JPY is struggling and the market might go for the sub-136.90 stops at the London open.

The commodity currencies recovered somewhat, led by the gains in AUD/USD. Notable offers at 0.8720 and then 0.8750. In USD/CAD, 1.12 is now the key support level and stops are building beneath, through 1.1185.

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