Cable trades to fresh seven-month highs to start the week

The pound stays underpinned ahead of the UK election this week

GBP/USD D1 09-12
Early bids have helped push the pound to a high of 1.3181, closing in on the May high of 1.3185 as we get into what will be a crucial week for the pound.

It is all about the election now and so far the polls are still suggestive of Boris Johnson coming out on top with traders holding out some hope for a majority outcome as well.
As for cable, looking at the weekly chart:
GBP/USD W1 09-12
We can see that buyers are looking poised for a key upside break after closing last week above the 100 and 200-week moving averages. This week, the 50.0 retracement level @ 1.3168 will be a key level to watch out for but it all depends on the election outcome.
If we do see yet another hung parliament result, expect the pound to undo its good work since October as we go back to the drawing board in this whole Brexit debacle.

US dollar slumps as we close in on the London fix

Heavy dollar selling

The dollar selling the models predicted into the London fix is kicking in.
That has helped to send EUR/USD up to 1.1020 after hitting a low of 1.0981 at the start of North American trade.
The move in USD/CAD is particularly impressive given the huge drops in oil and natural gas prices. Crude is now down more than $2 on the day yet USD/CAD is at a session low at 1.3279.

US dollar keeps the momentum going

Bloomberg dollar index at 7-week high

The DXY is the standard dollar index but it’s weightings are flawed, which is why I prefer the Bloomberg Dollar Index and its trade-weighted nature.
It highlights how the US dollar has climbed from a three-month low at the start of the month to a seven-week high in a steady rally.
It’s up once again today despite the US holiday as the antipodeans and pound slide.
Bloomberg dollar index at 7-week high
I don’t like to do technical analysis on an index but there isn’t much standing in the way of a further rally.
The kicker for me right now is that yields haven’t offered much support. US 10s are at 1.76% and that’s down from nearly 2% three weeks ago. The market continues to price in a 50% chance of a Fed cut by next July and I think as that comes out, there’s more upside for the dollar — especially against the funding currencies (JPY, CHF, EUR).

USD/JPY matches the best level since May

USD/JPY up 42 pips on the day

USD/JPY up 42 pips on the day
Better economic sentiment and a lower chance the Fed will cut rates are driving a rally in USD/JPY today and breaking technical resistance.
The next headline on the pair that you’re likely to see is it hitting the highest since May. It’s matched that level so far as it sits at 109.48.
Watch out for a run on buy stops if the pair breaks higher. Stocks are certainly poised for a strong close.

EUR/USD nears the November low

Keep an eye out for stops

EUR/USD is at the lows of the day as the US dollar gets a broad bid. The pair is down 27 pips on the day to 1.0994.
The level to watch is 1.0989, which as the November 13 low. Watch for stops if it gives way. A break below would mark the lowest since October 9.
Keep an eye out for stops
There are $1.1 billion in options running off at 1.1000 at the top of the hour, among others.

EUR/USD sits slightly lower near 1.10, what levels to look out for today?

The dollar is keeping a little more firm in the European morning so far

EUR/USD H1 27-11

And that is helping to see EUR/USD linger near the 1.1000 handle with the low today reaching 1.1003. Sellers remain in near-term control of the pair but trading may be a bit more tepid for now as we look towards a barrage of data to come from the US later.
That will be the key risk event for the dollar and also for EUR/USD in trading today.
But let’s take a look at what are the key levels that buyers and sellers may look to lean on should we see price action move around later on.
The 1.1000 level in itself is already a key one to watch but add in large expiries rolling off today around 1.0995-00, it only makes the figure level more of a magnet for now.
Below that, the 14 November low @ 1.0989 will be a notable one to watch as well. A fall below that will accelerate momentum to the downside for sellers.
Meanwhile, for buyers, any move higher needs to work towards breaking the 100-hour MA (red line) @ 1.1032 first before challenging the 200-hour MA (blue line) @ 1.1049.
A break above those two levels will see buyers reclaim near-term control before potentially moving towards a test of the 100-day moving average @ 1.1080 with further swing region resistance seen around 1.1090-00 next.
Those will be the key technical levels to watch out for now but how price action will play around these levels will depend on how the slate of data from the US plays out later today.

CFTC commitment of traders: EUR shorts increase in the current week. Largest speculative position.

Forex futures positioning data for the CFTC for the week ending November 19, 2019

  • EUR short 63K vs 58K short last week. Shorts increased by 5K
  • GBP short 32K vs 28K short last week. Shorts increased by 4K
  • JPY short 35K vs 35K short last week. Unchanged
  • CHF short 16K vs 15K short last week. Shorts increased by 1K
  • AUD short 47k vs 41K short last week. Shorts increased by 6K
  • NZD short 35K vs 36K short last week. Shorts trimmed by 1K
  • CAD long 29k vs 42K long last week.  Longs trimmed by 13K

Highlights:

  • EUR shorts remain the largest speculative position The short position is near the middle of the high to low range over the last year.
  • CAD is the largest and only, net long position (short USD position). However, the position was pared by 13K
  • AUD shorts increased by 6K
The EUR net short position