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EUR traders heads up – Friday could be a big day – Italy credit rating review

  
Analysis, Forex

Standard and Poors will release its updated assessment of Italy’s sovereign rating.

Currently:
  • Fitch and S&P have Italy at IG status, but a negative outlook
  • Moody’s has Italy on an IG rating also, but with a stable outlook
S&P’s announcement will impact on holders of Italian sovereign binds, BTPs.
  • ECB & Bank of Italy hold around EUR375bn (circa 19% of total outstanding)
  • Foreign ownership is around 32% (down from around 47% in 2011)
A downgrade from S&P would have a negative impact on EUR. An upgrade to the outlook would be a positive.

EURUSD slips to lowest level since June 2017

  
Analysis, Forex

Takes out the 2019 low at 1.1175

The price of the EURUSD has slipped to a new low for 2019 and trades at the lowest level since June 2018.
The fall has taken the price below the 2018 low at 1.1175. It also fell below the 61.8% of the move up from the January 2017 low to the 2018 high. That comes in at 1.11858.  The low has reached 1.11628.  From the daily, the 1.11178 is the low from June 2017.
The EURUSD has moved to the lowest level since June 2017
IN an earlier post I outlined how the 1.12037 was the 50% of the day’s range. A move above would tilt the bias back higher. The price high since that post stalled at 1.1204 before resuming the fall lower.

AUDUSD continues its fall. Looks toward March lows

  
Analysis, Forex

The 0.7000 level eyed

The AUDUSD continues to move lower after the much weaker than expected CPI data released earleir today.
The 0.7000 level eyed
The low just reache 0.7019. The March low comes in at 0.70027 level (call it 0.7000). If you discount the “flash crash” from January, the low for the year comes in at 0.6981.
Risk for shorts I have pegged at the 0.70488-55 area. That is home to a number of swing levels. Stay below, keeps the sellers firmly in control.
The AUDUSD is looking toward 2019 lows

Cable crumbles and is now testing the March low

  
Analysis, Forex

Pound falls in a reversal

It’s a tough day for the cable bulls. GBP/USD hit a one-week high of 1.3019 but has since reversed down to the lowest since March 10 at 1.2947. The low in March was 1.2939 and that’s a critical support level.
Here’s an 8-hour chart:
Pound falls in a reversal
Cable is caught in a large US dollar bid at the moment and there are no easy answers for what’s driving it. I think equity inflows are part of the story with Q1 earnings looking a lot better than expected. US futures are only up modestly but we’ll see what happens at the open.

No love for oil as Canadian dollar hits four-week low

  
Analysis, Forex

USD/CAD rises to highest since March 28

USD/CAD rises to highest since March 28
Yesterday’s fall in USD/CAD has been reversed as the pair jumps more than 50 pips to 1.3019. The latest leg of the rally hit stops above the April high of 1.3403.
It’s part of a quick, broad rally in the US dollar that pushed the dollar index to a five-day high.
The strength in USD/CAD is a bit of a puzzle. Oil is near a six-month high, although its 50-cents from the intraday high. Part of the story might be jitters about the BOC tomorrow. Flows must be part of the story but this is time of month when we generally see CAD-positive oil settlement flows.

What is worth worrying about is China. Reports yesterday about China paring back stimulus hit Shanghai stocks hard on Monday and is something to continue to worry about. The Shanghai Comp was down 0.5% today in more stable trading but this might be a delayed reaction to the potential for less China demand.

EUR/CHF climbs to five-month high as franc continues to hold weaker post-Easter

  
Analysis, Forex

EUR/CHF moves above 1.1440 for the first time since 8 November

EUR/CHF D1 23-04

The way that EUR/CHF has rebounded since testing support just under 1.1200 would definitely put a smile on SNB head Thomas Jordan’s face. The pair has now climbed to its highest level since 8 November as the franc continues to stay weaker, aided by some commentary by Jordan himself two weeks ago here.
That said, the move higher here is hardly anything to shout about as the pair remains rather confined in a narrow range between levels just under 1.1200 and the 1.1500 handle since mid-August last year.
The fundamentals of the franc hasn’t really changed over the past year but technically, price momentum is now more bullish after breaking above both key daily moving averages. That could result in a move to test the 1.1500 level in the coming sessions should buyers be able to find enough conviction on such a move, if it is also supported by fundamental factors i.e. risk sentiment of course.

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An Update :Dollar Index ,Euro ,Yen ,INR ,AUD ,GBP ,WTI -BRENT Crude ,SPX500 ,Nasdaq Composite ,Shanghai Composite -Anirudh Sethi

  
Analysis, Crude, Forex, Global Indices, US Market
The US dollar rose against all the major currencies but the Japanese yen.  Its net loss against the yen, less than 0.1% was a fluke.  The dollar was confined to a 40 tick range against the yen for the entire week.  It appears to be the among the narrowest weekly ranges since at least 2000.  The dollar is at the upper end of its recent ranges against the euro, yen, sterling, and Canadian dollar.  The question for many participants is whether the dollar is on the verge of a breakout.  Our reading of the technical condition suggests that while the ranges may fray, they will likely hold.  
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CFTC commitment of traders: JPY shorts increased by 15K to 87K short in week

  
Analysis, Forex

Weekly forex futures net speculative positions from the CFTC

  • Prior report
  • EUR short 98K vs 102K short last week.  Shorts trimmed by 4K
  • GBP short 1K vs 7K short last week. Shorts trimmed by 6K
  • JPY short 87K vs 72K short last week. Shorts increased by 15K
  • CHF short 33k vs 28k short last week. Shorts increased by 5K
  • AUD short 47k vs 54k short last week. Shorts trimmed by 7K
  • NZD short 3K vs 1K short last week. Shorts increased by 2K
  • CAD short 49K vs 43K short last week.  Shorts increased by 6K
Weekly forex futures net speculative positions from the CFTC
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