MNI Asia Morning FX Analysis -Sterling Stronger Across the Board

Sterling Stronger Across the Board

Markets consolidated slightly Tuesday, with equity markets mulling over the sharp rally (and sharp retracement) on Monday. Equities in Europe posted decent gains, with the EuroStoxx50 closing higher by just over 1%. US cash markets, however, traded either side of unchanged. Volumes were, unsurprisingly, lacklustre relative to the activity seen Monday.

GBP was the best performer Tuesday, getting some support as markets rush to price out the likelihood of lower rates in the UK next year (driven by Monday's vaccine-induced rally), and could be benefitting from resistance in the House of Lords late Monday to the government's Internal Markets Bill, which could make including the elements that run against international law more difficult. EUR/GBP slipped below the 200-dma for the first time since May.

Market activity and volumes could prove slightly muted Wednesday, with US markets (notably fixed income) seeing a partial close for the Veterans Day holidays. This will leave focus on the RBNZ rate decision, where the bank are seen keeping policy rates unchanged as well as a speech from ECB President Lagarde, who kicks off the ECB forum on central banking.

​EURUSD TECHS: Corrective Pullback

• RES 4: 1.2011 High Sep 1 and major resistance
• RES 3: 1.1981 2.0% 10-dma envelope
• RES 2: 1.1971 3.0% Upper Bollinger Band
• RES 1: 1.1920 High Nov 9
• PRICE: 1.1810 @ 16:41 GMT Nov 10
• SUP 1: 1.1768 20-day EMA
• SUP 2: 1.1750 50-day EMA
• SUP 3: 1.1711 Low Nov 5
• SUP 4: 1.1603 Low Nov 4 and the bear trigger

EURUSD retraced Monday and traded broadly flat into the Tuesday close. The move lower however is likely a correction with the pair maintaining a bullish tone following last week's gains and the breach of 1.1881, Oct 21 high. The break higher paves the way for a climb towards 1.2011, Sep 1 high. Today's bull trigger is 1.1920, yesterday's high. On the downside, key support has been defined at 1.1603. A move below this support is required to reinstate a bearish threat.

GBPUSD TECHS: Needle Points North

• RES 4: 1.3357 High Sep 3
• RES 3: 1.3319 High Sep 4
• RES 2: 1.3292 76.4% retracement of the Sep 1 - 23 sell-off
• RES 1: 1.3278 High Nov 10
• PRICE: 1.3228 @ 16:43 GMT Nov 10
• SUP 1: 1.3157 Low Nov 10
• SUP 2: 1.3093 Low Nov 6
• SUP 3: 1.3028 20-day EMA
• SUP 4: 1.2911 Low Nov 3

GBPUSD started the week on a strong note following last week's gains and remains firm. Importantly, the pair has breached key resistance at 1.3177, Oct 21 and Nov 6 high. The break above this level signals scope for further strength with attention turning to 1.3292 next, 76.4% of the Sep 1 - 23 sell-off. Note that price has traded above the 61.8% retracement at 1.3174. Initial support lies at 1.3157 ahead of Friday's 1.3093 low.

​EURGBP TECHS: Breaks Support And Resumes Downtrend

• RES 4: 0.9149 Oct 20 high
• RES 3: 0.9107 High Oct 23
• RES 2: 0.9069 High Nov 5 / Trendline drawn off the Sep 11 high
• RES 1: 0.8982 Intraday high
• PRICE: 0.8928 @ 16:44 GMT Nov 10
• SUP 1: 0.8884 Low Nov 10
• SUP 2: 0.8866 Low Sep 3 and a key support
• SUP 3: 0.8830 Low May 15
• SUP 4: 0.8748 61.8% Feb - March Rally

EURGBP traded sharply lower Tuesday clearing 0.8946, Nov 4 low, the bear trigger, as well as the 200-dma. The break lower negates a recent bullish candle pattern and instead confirms a resumption of the underlying downtrend that has been in place since Sep 11. Note too that trendline resistance drawn off the Sep 11 high remains intact, reinforcing the current bearish theme. Attention turns to 0.8866, Sep 3 low. Initial resistance is at 0.8982, the Nov 10 high.

USDJPY TECHS: Bullish Engulfing Candle highlights A Reversal

• RES 4: 106.55 High Sep 3
• RES 3: 106.11 High Oct 8
• RES 2: 105.89 100 dma
• RES 1: 105.65 High Nov 9 and the intraday bull trigger
• PRICE: 105.36 @ 16:56 GMT Nov 10
• SUP 1: 104.42 50.0% retracement of yesterday's range
• SUP 2: 103.18/09 Low Nov 6 / Low Mar 12 and key support
• SUP 3: 102.02 Low Mar 10
• SUP 4: 101.29 Bear channel base drawn off the Mar 24 high

USDJPY rallied sharply higher Monday defining a key short-term support at 103.18, Nov 6 low. In candle terms, Monday's price pattern is a bullish engulfing line and highlights a potential reversal in sentiment. A break of 105.65, the Monday high would reinforce this set-up and signal scope for a climb towards the 100-dma at 105.89 and the early October highs of 106.11. Initial support is seen at 104.42, 50.0% of Monday's trading range.

EURJPY TECHS: Bear Channel Breakout

• RES 4: 127.08 High Sep 1 and primary resistance
• RES 3: 126.46 High Sep 10
• RES 2: 125.79 76.4% retracement of the Sep - Oct Sell-Off
• RES 1: 125.13 High Nov 9
• PRICE: 124.41 @ 16:57 GMT Nov 10
• SUP 1: 123.99 Intraday low
• SUP 2: 122.69 Low Nov 9
• SUP 3: 122.21 Low Nov 5
• SUP 4: 121.62 Low Oct 30 and key support

EURJPY traded sharply higher Monday alongside the broad risk-on rally. This solidly counters the underlying bearish theme, with markets convincingly breaking above resistance highlighted by the 20- and 50-day EMA's. Furthermore, the cross has also cleared its bear channel resistance drawn off the Sep 1 high. This has opened 125.79, a Fibonacci retracement ahead of the early September highs of 126.46. Support is at 122.69.

AUDUSD TECHS: Needle Still Points North

• RES 4: 0.7414 High Sep 1
• RES 3: 0.7360 3.0% 10-dma envelope
• RES 2: 0.7345 High Sep 16
• RES 1: 0.7340 High Nov 9
• PRICE: 0.7273 @ 16:59 GMT Nov 10
• SUP 1: 0.7239 Low Nov 6
• SUP 2: 0.7145 Low Nov 5
• SUP 3: 0.7100 Former trendline resistance drawn off the Sep 1 high
• SUP 4: 0.7049 Low Nov 4

AUDUSD maintains a bullish tone. The pair rallied sharply higher last week reinforcing the significance of the recent trendline break drawn off the Sep 1 high. Gains on Nov 5 also resulted in a break of former resistance at 0.7243, Oct 9 high. With bullish conditions strengthened, scope is seen for a climb towards 0.7345 next, Sep 16 high. Initial firm support is seen at 0.7145. A break would undermine the current bullish outlook.

USDCAD TECHS: Bearish Having Cleared The 2019 Low

• RES 4: 1.3300 High Nov 4
• RES 3: 1.3215 50-day EMA
• RES 2: 1.3178 High Nov 5
• RES 1: 1.3081 Low Oct 21
• PRICE: 1.2999 @ 17:01 GMT Nov 10
• SUP 1: 1.2929/17 Low Nov 9 / Low Oct 16, 2018
• SUP 2: 1.2912 2.0% 10-dma envelope
• SUP 3: 1.2857 Low Oct 4, 2018
• SUP 4: 1.2783 Low Oct, 1 2018 and a key support

USDCAD traded lower Monday extending the most recent sell-off from 1.3390, Oct 29 high. More importantly, the pair fell solidly through the Dec 31 2019 lows, hitting the lowest level since mid-2018 in the process. Various levels of support, most notably 1.2952, the Dec 2019 low gave way Monday. This reinforces the bearish them and opens 1.2917 and 1.2857, the Oct 16 and Oct 4, 2018 lows respectively. 1.3081 is seen as a firm resistance.

EUR/USD: MNI KEY LEVELS

• *$1.2032 May02-2018 high
• *$1.2009/11 May03-2018 high/YTD Sep01 high
• *$1.1996 May14-2018 high
• *$1.1982/83 Upper Boll Band (3%)/Upper 2.0% 10-dma env
• *$1.1938 May15-2018 high
• *$1.1911 Upper Bollinger Band (2%)
• *$1.1866 Upper 1.0% 10-dma envelope
• *$1.1850/51 100-mma/Jun14-2018 high
• *$1.1843 Intraday high
• *$1.1830 100-hma
• *$1.1821 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *$1.1815 Sep24-2018 high
• *$1.1796 Cloud top
• *$1.1783/80 55-dma/Intraday low
• *$1.1773/68 50-dma/21-dma
• *$1.1758/57 Cloud base/Sep27-2018 high
• *$1.1750 200-hma
• *$1.1736 Fibo 38.2% 1.3993-1.0341
• *$1.1691 100-dma
• *$1.1651 Sep28-2018 high
• *$1.1631/28 Lower 1.0% 10-dma env/Lower Boll Band (2%)

GBP/USD: MNI KEY LEVELS

• *$1.3482 YTD Sep01 high
• *$1.3472 Jun07-2018 high
• *$1.3445/47 Upper3.0% 10-dma env/Jun14-2018 high
• *$1.3408 Fibo 38.2% 1.1841-1.4377
• *$1.3380/81 50% 1.4377-1.2382/Mar13-2019 high
• *$1.3363 Jul09-2018 high
• *$1.3328 Upper Bollinger Band (3%)
• *$1.3311/15 Mar19-2019 high/Upper 2.0% 10-dma env
• *$1.3276/78 Mar20-2019 high/Intraday high
• *$1.3269 Mar27-2019 high
• *$1.3243 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *$1.3229 Upper Bollinger Band (2%)
• *$1.3213 Mar28-2019 high
• *$1.3196 Apr03-2019 high
• *$1.3191 Apr04-2019 high
• *$1.3185/84 May06-2019 high/Upper 1.0% 10-dma env
• *$1.3157 Intraday low
• *$1.3144 Fibo 38.2% 1.4377-1.2382
• *$1.3136/33 100-hma/Apr12-2019 high
• *$1.3131 May07-2019 high
• *$1.3109 Fibo 50% 1.1841-1.4377

EUR/GBP: MNI KEY LEVELS

• *Gbp0.9079 Cloud base
• *Gbp0.9073 50-dma
• *Gbp0.9061/62 55-dma/Jan11-2019 high
• *Gbp0.9048/51 Jul16-2019 high/Jul17-2019 high, 100-dma
• *Gbp0.9035/39 21-dma/Jul18-2019 high
• *Gbp0.9006/07/10 100-hma/200-hma/Jul10-2019 high
• *Gbp0.9000/05 Jul22-2019 high/Jul23-2019 high
• *Gbp0.8981 Intraday high
• *Gbp0.8953 Jul23-2019 low
• *Gbp0.8937 Lower Bollinger Band (2%)
• *Gbp0.8925 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *Gbp0.8924/21 200-dma/Jul02-2019 low
• *Gbp0.8911 Lower 1.0% 10-dma envelope
• *Gbp0.8889 Lower Bollinger Band (3%)
• *Gbp0.8884 Intraday low
• *Gbp0.8874/73/72 Jun19-2019 low/Jun20-2019 low/Jun12-2019 low
• *Gbp0.8865 Fibo 61.8% 0.9108-0.8473
• *Gbp0.8830 Jun06-2019 low
• *Gbp0.8822/21 May31-2019 low/Lower 2.0% 10-dma env, 100-wma
• *Gbp0.8815 200-wma
• *Gbp0.8808 May30-2019 low

USD/JPY: MNI KEY LEVELS

• *Y106.97 200-dma
• *Y106.78 Jun25-2019 low
• *Y106.57 Upper 2.0% 10-dma env, 38.2% 75.35-125.86
• *Y106.56 Upper Bollinger Band (3%)
• *Y106.52 Fibo 61.8% 99.02-118.66
• *Y105.96 Upper Bollinger Band (2%)
• *Y105.88 100-dma
• *Y105.53 Upper 1.0% 10-dma env, Cloud top
• *Y105.49 Intraday high
• *Y105.31/33 Cloud base/55-dma
• *Y105.31 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *Y105.27 50-dma
• *Y104.87 Jan03-2019 low
• *Y104.82 Intraday low
• *Y104.80 21-dma
• *Y104.65 Cloud Kijun Sen
• *Y104.56 Mar26-2018 low
• *Y104.42 Cloud Tenkan Sen
• *Y104.41 200-hma
• *Y104.17 100-hma
• *Y103.94 200-mma

EUR/JPY: MNI KEY LEVELS

• *Y125.61 Apr24-2019 high
• *Y125.23 May01-2019 high
• *Y125.21 200-wma, Upper 2.0% 10-dma env
• *Y125.13 Upper Bollinger Band (2%)
• *Y125.04 Apr11-2019 low
• *Y124.96 50-mma
• *Y124.93 Fibo 38.2% 149.78-109.57
• *Y124.73 Cloud top
• *Y124.60 Intraday high
• *Y124.51 Fibo 61.8% 126.81-120.78
• *Y124.49 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *Y124.34 Apr01-2019 low
• *Y124.25 May07-2019 high
• *Y124.22 Fibo 38.2% 133.13-118.71
• *Y124.14 38.2% 118.71-127.50, Cloud base
• *Y124.11 55-dma
• *Y123.99 Intraday low
• *Y123.98 Upper 1.0% 10-dma envelope
• *Y123.94 50-dma
• *Y123.80 Fibo 50% 126.81-120.78
• *Y123.77 100-dma

AUD/USD: MNI KEY LEVELS

• *$0.7484 Jul10-2018 high
• *$0.7463/64 Jul26-2018 high/Jul25-2018 high
• *$0.7453 Aug09-2018 high
• *$0.7425 Fibo 38.2% 0.8136-0.6985
• *$0.7414 YTD Sep01 high
• *$0.7391/94 Upper Boll Band (3%)/Dec04-2018 high
• *$0.7376 Upper 3.0% 10-dma envelope
• *$0.7356 Dec05-2018 high
• *$0.7304/05 Upper 2.0% 10-dma env/Upper Boll Band (2%)
• *$0.7294/95 Intraday high/Jan31-2019 high
• *$0.7281 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *$0.7274 Dec06-2018 high
• *$0.7261 100-hma
• *$0.7253 50-mma, Intraday low
• *$0.7242 200-wma
• *$0.7233 Upper 1.0% 10-dma envelope
• *$0.7210/07/06 Cloud top/Feb21-2019 high/Apr17-2019 high
• *$0.7190 55-dma
• *$0.7177 50-dma
• *$0.7166 200-hma
• *$0.7159 Cloud base

USD/CAD: MNI KEY LEVELS

• *C$1.3159/62/63 200-wma/21-dma/Feb21-2019 low
• *C$1.3150/51 200-hma, Feb20-2019 low/Jun20-2019 low
• *C$1.3120 Fibo 61.8% 1.2783-1.3665
• *C$1.3113/16 Feb25-2019 low/Jul23-2019 low
• *C$1.3107 Jun26-2019 low
• *C$1.3066 Fibo 38.2% 1.4690-1.2062
• *C$1.3053 Fibo 38.2% 1.2062-1.3665
• *C$1.3047/51 100-hma/Intraday high
• *C$1.3026 Lower 1.0% 10-dma envelope
• *C$1.3015 Oct25-2018 low
• *C$1.3007 ***CURRENT MARKET PRICE 18:07GMT TUESDAY***
• *C$1.2985 Intraday low
• *C$1.2975 Lower Bollinger Band (2%)
• *C$1.2970 Oct24-2018 low
• *C$1.2933/29 Oct17-2018 low/YTD Nov09 low
• *C$1.2917 Oct16-2018 low
• *C$1.2894/91 Lower 2.0% 10-dma env/Oct05-2018 low
• *C$1.2881 Lower Bollinger Band (3%)
• *C$1.2864 Fibo 50% 1.2062-1.3665
• *C$1.2857 Oct04-2018 low
• *C$1.2808 Oct03-2018 low

Expiries for Nov11 NY cut 1000ET (Source DTCC)

EUR/USD: $1.1650-55(E1.1bln), $1.1770-80(E699mln), $1.1800-10(E977mln), $1.1830-35(E1.1bln)

USD/JPY: Y104.00($550mln), Y105.25-37($624mln)

USD/CNY: Cny6.63($830mln), Cny6.65($1.0bln)

Larger Option Pipeline

EUR/USD: Nov13 $1.1840-55(E1.1bln), $1.2000(E1.78bln-EUR calls); Nov17 $1.1850(E1.2bln-EUR calls)

USD/JPY: Nov12 Y103.00($1.9bln-USD puts), Y105.40-50($1.4bln); Nov13 Y101.00($995mln-USD puts)

EUR/JPY: Nov16 Y123.00(E1.25bln)

EUR/AUD: Nov12 A$1.6520(E973mln)

AUD/NZD: Nov16 N$1.0650(A$1.16bln)

USD/CNY: Nov13 Cny6.60($1.1bln); Nov20 Cny6.60($1.0bln), Cny6.90($2.0bln)