MNI Europe Morning FX Analysis: Antipodeans Undermined By Central Bank Speak, CNH Prints New Cycle High

Antipodeans Undermined By Central Bank Speak, CNH Prints New Cycle High

Antipodean FX remained under pressure overnight as comments from local policymakers took focus. The Kiwi went offered as RBNZ Gov Orr talked up ample policy room, expressed preference for inflation overshoot rather than having to battle deflation and signalled potential for implementing macroprudential measures if banks "get carried away". Not too long thereafter, RBA Asst Gov Kent said that it wouldn't be unexpected for BBSW to plunge below 0% and his remarks overshadowed the fairly unimpressive minutes from the RBA's most recent monetary policy meeting. Central bank speak drove a round trip in AUD/NZD followed by some further wavering. AUD/USD sank through support from Oct 15 low, printing worst levels this month.

• USD/JPY ticked higher into the Tokyo fix. It is a Gotobi day today.
• USD/CNH peeked under another key support and briefly showed at levels not seen since Jul 2018, but promptly erased losses. The PBoC offered little to no impetus, as its daily fixing of USD/CNY mid-point and monthly LPR fixing fell in line with expectations.
• USD/KRW dipped through the KRW1,140.00 mark to the lowest levels since Apr 2019, despite the news that Intel agreed to sell its memory chip unit to South Korea's SK Hynix for about KRW10.3tn.
• Eyes move to U.S. housing starts & building permits, German PPI and comments from Fed's Quarles, Evans, Brainard & Bostic, ECB's de Cos, BoE's Vlieghe and Riksbank's Ingves & Ohlsson.

TECHNICALS:

EUR/USD: Rebound Likely To Extend

• RES 4: 1.1872 High Sep 21
• RES 3: 1.1859 61.8% retracement of the Sep 1 - 25 sell-off
• RES 2: 1.1817/31 High Oct 13 / High Oct 9 and the bull trigger
• RES 1: 1.1794 High Oct 19
• PRICE: 1.1777 @ 05:46 BST Oct 20
• SUP 1: 1.1685 Low Sep 30
• SUP 2: 1.1612/1581 Low Sep 25 and the bear trigger / Low Jul 24
• SUP 3: 1.1526 0.764 proj of Sep 1 - Sep 25 sell-off from Oct 9 high
• SUP 4: 1.1541 Low Jul 23

EURUSD strengthened Monday as the pair recovered off last week's low of 1.1689 on Oct 15. A fairly strong close Monday strengthens the intraday reversal and exposes key near-term resistance at 1.1831, Oct 12 high. This level represents the trigger for a resumption of the bullish reversal that occurred on Sep 25 and would open 1.1859 initially, a retracement level. Sub 1.1684 levels, Sep 30 low, is required to reinstate a bearish threat.

GBP/USD: Resistance Remains Intact

• RES 4: 1.3198 Former trendline support drawn off the Mar 20 low
• RES 3: 1.3174 61.8% retracement of the Sep 1 - 23 sell-off
• RES 2: 1.3083 High Oct 12
• RES 1: 1.3030 High Oct 15
• PRICE: 1.2946 @ 05:52 BST Oct 20
• SUP 1: 1.2863 Low Oct 14
• SUP 2: 1.2846 Low Oct 7 and key near-term support
• SUP 3: 1.2806 Low Sep 30
• SUP 4: 1.2745 Low Sep 28

GBPUSD remains below the Oct 12 high of 1.3083. A break is needed to resume the recent uptrend that would open 1.3000 and 1.3198. The latter is the former trendline support drawn off the Mar 20 low. The trendline was breached on Sep 9. A break of 1.3198 is required to strengthen a bullish theme. Firm near-term support lies at 1.2846. A breach would instead signal scope for a deeper pullback and possibly a bearish resumption.

EUR/GBP: Bearish Despite Recovery Off Recent Lows

• RES 4: 0.9190 61.8% retracement of the Sep 11 - 28 sell-off
• RES 3: 0.9162 High Oct 7 and the bull trigger
• RES 2: 0.9132 High Oct 10
• RES 1: 0.9122 Oct 14 high
• PRICE: 0.9098 @ 05:58 BST Oct 20
• SUP 1: 0.9007 Low Oct 14
• SUP 2: 0.9000 Round number support
• SUP 3: 0.8967 76.4% retracement of the Sep 3 - 11 rally
• SUP 4: 0.8808 Low May 13

EURGBP maintains a bearish tone despite yesterday's bounce off the day low. The cross is trading above its trendline resistance drawn off the Sep 11 high. However, in order to confirm a clear break of the line, price needs to trade above resistance at 0.9122, Oct 14 high. Until then, a bearish theme dominates and attention is on the bear trigger at 0.9007, Oct 14 low. A break would open 0.9000 and below towards 0.8967, a retracement level.

USD/JPY: Focus Still On Key Support

• RES 4: 106.95 High Sep 28
• RES 3: 106.48 Channel resistance drawn off Mar 24 high
• RES 2: 106.11/38 High Oct 7 and the bull trigger / High Sep 8
• RES 1: 105.63 High Oct 13
• PRICE: 105.53 @ 06:05 BST Oct 20
• SUP 1: 105.04 Low Oct 14
• SUP 2: 104.94 Low Oct 2 and key near-term support
• SUP 3: 104.41 Low Sep 22
• SUP 4: 104.00 Low Sep 21 and the bear trigger

USDJPY continues to trade above recent lows. Despite this, the pair continues to display a softer tone. Intraday momentum studies still point south however to strengthen a bearish theme, price needs to trade below 104.94, Oct 2 low. This would open 104.00, Sep 21 low. The bull trigger is at 106.11, Oct 7 high where a break would instead resume bullish pressure. Initial resistance is at 105.63.

EUR/JPY: Firmer, With Support Intact

• RES 4: 125.97 76.4% retracement of the Sep 1 - 28 sell-off
• RES 3: 125.77 High Sep 15
• RES 2: 125.09/28 High Oct 9 / 61.8% of the Sep 1 - 28 sell-off
• RES 1: 124.48 High Oct 13
• PRICE: 124.31 @ 06:07 BST Oct 20
• SUP 1: 123.03/02 Low Sep 29 and Oct 2 / Low Oct 15
• SUP 2: 122.38/28 Low Sep 28 / 61.8% of the Jun 22 - Sep 1 rally
• SUP 3: 122.25 38.2% retracement of the May - Sep rally
• SUP 4: 121.82 Low Jul 15 and 16

EURJPY started the week on a firm note with the cross pulling away from support at 123.03/02, low prints between Sep 29 and Oct 15. Stronger gains through the 124.00 handle would signal potential for an extension higher towards 125.09, Oct 9 high and the bull trigger. A break of 125.09 would open 125.28 and 125.97, both retracement levels. On the downside, a 123.03/02 breach is needed to trigger bearish pressure and open 122.38, Sep 28 low.

AUD/USD: Heavy And Approaching Key Support

• RES 4: 0.7243 High Oct 10 and the intraday bull trigger
• RES 3: 0.7194 Trendline resistance drawn off the Sep 1 high
• RES 2: 0.7170 High Oct 15
• RES 1: 0.7115 High Oct 19
• PRICE: 0.7044 @ 06:14 BST Oct 20
• SUP 1: 0.7029 Low Sep 28
• SUP 2: 0.7006 Low Sep 25 and the bear trigger
• SUP 3: 0.6965 23.6% retracement of the Mar - Sep rally
• SUP 4: 0.6931 0.764 projection of Sep 1 - 25 sell-off from Oct 9 high

AUDUSD remains vulnerable and has traded lower overnight. On Oct 9, the pair cleared resistance at 0.7209, Oct 1 and 6 high resulting in a test of trendline resistance drawn off the Sep 1 high. The line intersects at 0.7194. The failure at the trendline is weighing on the Aussie and the scene is set for a deeper pullback. Attention is on the primary support and bear trigger at 0.7006, Sep 25 low. A trendline break would alter the picture.

USD/CAD: Bullish Despite Recent Pullback

• RES 4: 1.3421 High Sep 30 and primary resistance
• RES 3: 1.3341 High Oct 7 and a reversal trigger
• RES 2: 1.3260/68 50-day EMA / High Oct 7
• RES 1: 1.3259 High Oct 15
• PRICE: 1.3192 @ 06:20 BST Oct 20
• SUP 1: 1.3143 Low Oct 15
• SUP 2: 1.3099 Low Oct 13 and the bear trigger
• SUP 3: 1.3095 76.4% retracement of the Sep 1 - 30 rally
• SUP 4: 1.3038 Low Sep 2

The USDCAD short-term outlook remains bullish with recent gains signalling scope for a stronger corrective bounce. The pair breached the 20-day EMA last week paving the way for move towards the 50-day EMA that intersects at 1.3260. A clear breach of the 50 EMA would strengthen a bullish case. On the downside, initial support lies at 1.3143, Oct 15 low. A move through this level would undermine the recent recovery.

MNI KEY LEVELS

EUR/USD: MNI Key Levels

• $1.1886/00 Upper Boll Band (3%)/Sep15 high
• $1.1872/80/82 Sep21 high/Upper 1.0% 10-dma env/Sep16 high
• $1.1851/56 Cloud top/100-mma
• $1.1836 Upper Bollinger Band (2%)
• $1.1817/27/31 Oct13 high/Oct12 high/Oct09 high
• $1.1794/95/96 Oct19 high/50-dma/55-dma
• $1.1777 Intraday high
• $1.1777 ***CURRENT MARKET PRICE 05:12BST TUESDAY***
• $1.1764/60 Intraday low/200-hma
• $1.1735/34 100-hma/21-dma
• $1.1703/94/89 Oct19 low/Oct16 low/Oct15 low
• $1.1685 Sep30 low, Sep25 high
• $1.1664/61 76.4% 1.1612-1.1831/Sep29 low
• $1.1645/34 Lower 1.0% 10-dma env/Lower Boll Band (2%)

GBP/USD: MNI Key Levels

• $1.3083/89/92 Oct12 high/Upper Boll Band (2%)/Upper 1.0% 10-dma env
• $1.3064/72 Oct14 high/Oct13 high
• $1.3025/30 Oct19 high/Oct15 high
• $1.3012/19 50-dma/55-dma
• $1.2971 200-hma
• $1.2960 Cloud base
• $1.2950/58 50-mma, 100-hma/Intraday high
• $1.2949 ***CURRENT MARKET PRICE 05:22BST TUESDAY***
• $1.2943/35 200-wma/Intraday low
• $1.2899/91 21-dma/Oct19 low
• $1.2865/63 Oct16 low/Oct14 low
• $1.2846/45/38 Oct07 low/100-dma/Oct02 low
• $1.2833 Lower 1.0% 10-dma envelope
• $1.2820 Oct01 low
• $1.2806 Sep30 low

EUR/GBP: MNI Key Levels

• Gbp0.9197 Upper Bollinger Band (3%)
• Gbp0.9181 Sep24 high
• Gbp0.9165 Upper 1.0% 10-dma envelope
• Gbp0.9156/57/62 Oct01 high/Sep30 high/Upper Boll Band (2%), Oct07 high
• Gbp0.9132 Oct09 high
• Gbp0.9110/22/23 Oct16 high/Oct14 high/Oct08 high
• Gbp0.9095/97/98 Intraday high/21-dma/Oct19 high
• Gbp0.9094 ***CURRENT MARKET PRICE 05:27BST TUESDAY***
• Gbp0.9085/79/75 Intraday low/Cloud top, Cloud base/10-dma
• Gbp0.9067/65/62 200-hma/50-dma/55-dma
• Gbp0.9061 100-hma
• Gbp0.9043 100-dma
• Gbp0.9023/22/17 Oct19 low/Lower Boll Band (2%)/Oct15 low
• Gbp0.9007 Oct14 low
• Gbp0.8987/84 Lower Boll Band (3%)/Lower 1.0% 10-dma env

USD/JPY: MNI Key Levels

• Y105.99 Cloud base
• Y105.95 Upper Bollinger Band (2%)
• Y105.85 Oct12 high
• Y105.75 55-dma
• Y105.74 50-dma
• Y105.63 Oct13 high
• Y105.57/62 Cloud Tenkan Sen/Intraday high
• Y105.53 ***CURRENT MARKET PRICE 05:31BST TUESDAY***
• Y105.50 200-hma, 21-dma
• Y105.35 Intraday low
• Y105.34 100-hma
• Y105.30 Oct19 low
• Y105.19 Oct16 low
• Y105.11 Lower Bollinger Band (2%)
• Y105.09 Oct15 low

EUR/JPY: MNI Key Levels

• Y125.09 Oct09 high
• Y125.03 Oct12 high
• Y124.93 Fibo 38.2% 149.78-109.57
• Y124.80 50-mma
• Y124.74 55-dma
• Y124.72 50-dma
• Y124.34/48 Intraday high, Oct19 high/Oct13 high
• Y124.29 ***CURRENT MARKET PRICE 05:47BST TUESDAY***
• Y124.08/06 Cloud Kijun Sen/Cloud Tenkan Sen, 200-hma
• Y124.03 Intraday low
• Y123.80 21-dma
• Y123.77 Oct15 high
• Y123.71 Oct16 high
• Y123.68 Cloud base
• Y123.62 100-hma

AUD/USD: MNI Key Levels

• $0.7208/18 Upper 1.0% 10-dma env/Oct13 high
• $0.7191/99/01 Oct14 high/55-dma/50-dma
• $0.7164/70 Cloud base/Oct15 high
• $0.7146 200-hma
• $0.7123/28 Oct08 low/21-dma
• $0.7101/02/15 100-hma/100-dma/Oct19 high
• $0.7065/75 Lower 1.0% 10-dma env/Intraday high
• $0.7043 ***CURRENT MARKET PRICE 05:48BST TUESDAY***
• $0.7038/29 Intraday low/Sep28 low
• $0.7006/94 Sep25 low, Lower Boll Band (2%)/Lower 2.0% 10-dma env
• $0.6973/63 Jul20 low/Jul16 low
• $0.6947 Lower Bollinger Band (3%)
• $0.6923/21 Lower 3.0% 10-dma env/Jul14 low
• $0.6897 100-wma
• $0.6877 Jul01 low

USD/CAD: MNI Key Levels

• C$1.3377 100-wma
• C$1.3341/52 Oct07 high/100-dma, Sep29 low
• C$1.3308/20 Upper 1.0% 10-dma env/Cloud top
• C$1.3259/60/73 Oct15 high/21-dma/Oct08 high
• C$1.3238 Oct16 high
• C$1.3217 55-dma
• C$1.3202/07 Intraday high/50-dma
• C$1.3190 ***CURRENT MARKET PRICE 05:53BST TUESDAY***
• C$1.3183/79/76 100-hma/Intraday low/50-mma
• C$1.3172/69/61 Cloud base/200-hma/200-wma
• C$1.3151/43 Oct19 low/Oct15 low
• C$1.3117 Oct14 low
• C$1.3099/87 Oct13 low/Sep08 low
• C$1.3069 Lower Bollinger Band (2%)
• C$1.3045/38 Lower 1.0% 10-dma env/Sep02 low

OPTIONS: Expiries for Oct20 NY cut 1000ET (Source DTCC)

• EUR/USD: $1.1650(E664mln), $1.1745(E1.4bln), $1.1790-00(E1.4bln), $1.1865-75(E689mln)
• USD/JPY: Y104.00-05($584mln), Y105.00($760mln), Y105.50-60($1.1bln), Y105.90-106.00($934mln), Y106.35-50($2.5bln-USD calls)
• AUD/USD: $0.7050(A$643mln), $0.7220-30(A$579mln)
• USD/CAD: C$1.3200($515mln)
• USD/CNY: Cny6.7500($500mln-USD puts)

Larger Option Pipeline

• EUR/USD: Oct22 $1.1600-10(E1.7bln), $1.1645-50(E1.8bln), $1.1795-00(E1.2bln); Oct23 $1.1840-50(E1.2bln), $1.2000(E1.3bln); Oct26 $1.1500(E1.8bln), $1.1650-60(E1.6bln); Oct28 $1.1800-05(E1.4bln), $1.2000-05(E2.1bln); Oct30 $1.1800(E1.1bln)
• USD/JPY: Oct21 Y105.00-10($1.9bln), Y105.50($1.2bln), Y105.90-106.00($2.3bln), Y106.65($1.0bln); Oct22 Y104.00-10($1.6bln), Y104.50-55($2.1bln), Y104.95-105.00($1.1bln), Y105.95-106.00($1.2bln); Oct26 Y103.95-104.00($1.5bln-USD puts), Y106.95-107.00($1.6bln); Oct27 Y105.00($1.2bln); Oct28 Y105.00($1.1bln); Oct29 Y106.00($1.2bln); Oct30 Y104.50($1.9bln), Y104.80-85($1.0bln), Y106.00-05($1.9bln)
• EUR/JPY: Oct26 Y122.80(E1.2bln)
• EUR/GBP: Oct26 Gbp0.8900(E880mln), Gbp0.9000(E1.7bln-EUR puts)
• AUD/USD: Oct21 $0.7600(A$1.1bln); Nov02 $0.7140-45(A$1.3bln)
• AUD/JPY: Oct22 Y76.44(A$2.1bln); Oct29 Y73.20(A$1.0bln-AUD puts), Y76.35-40(A$2.4bln-AUD calls)
• AUD/NZD: Oct27 N$1.0809-20(A$2.5bln); Oct30 N$1.0750(A$1.2bln)