MNI Europe Morning FX Analysis: U.S. Election Interference Risk Keeps Asia On Cautious Side

FOREX: U.S. Election Interference Risk Keeps Asia On Cautious Side

Mild risk aversion took hold as top U.S. intelligence officials told reporters that Iran and Russia have been trying to disrupt the upcoming U.S. presidential election. Price action was relatively limited, with little more to give it some further impetus. The greenback outperformed all of its G10 peers. Commodity-linked FX were the laggards, although NZD managed to shake off earlier weakness.

• Demand for USD pushed USD/CNH higher. A softer than expected PBoC fix failed to immediately extend the upswing, but the rate picked up a bid later on amid continued USD purchases.
• USD/KRW moved away from multi-month lows as South Korean FinMin Hong told lawmakers that one-sided FX moves are not good for domestic economy and pledged readiness to stabilise FX markets if needed.
• U.S. initial jobless claims, existing home sales, EZ consumer confidence and speeches from Fed's Barkin & Kaplan, ECB's Panetta, BoE's Bailey & Haldane and Norges Bank's Olsen take focus from here.

MNI TECHNICALS: 

EUR/USD: Holding Onto Recent Gains

• RES 4: 1.2011 High Sep and key resistance
• RES 3: 1.1917 76.4% retracement of the Sep 1 - 25 sell-off
• RES 2: 1.1895 1.0% 10-dma envelope
• RES 1: 1.1881 High Oct 21
• PRICE: 1.1845 @ 05:41 BST Oct 22
• SUP 1: 1.1822 Low Oct 21
• SUP 2: 1.1760 Low Oct 20
• SUP 3: 1.1739 50-day EMA
• SUP 4: 1.1717 Trendline support drawn off the Sep 28 low

EURUSD traded higher again Wednesday, registering the best levels since mid-September in the process. This week's positive theme has been reinforced by the break of the bull trigger at 1.1831, Oct 9 high. The breach signals scope for an extension towards 1.1917, a Fibonacci retracement level. The major resistance and hurdle for bulls is at 1.2011, Sep 1 high. On the downside, initial firm support lies at 1.1760, Tuesday's low.

GBP/USD: Approaching Former Trendline Support-Now-Resistance

• RES 4: 1.3292 76.4% retracement of the Sep 1 - 23 sell-off
• RES 3: 1.3245 1.0% 10-dma envelope
• RES 2: 1.3222 Former trendline support drawn off the Mar 20 low
• RES 1: 1.3177 High Oct 21
• PRICE: 1.3133 @ 05:49 BST Oct 22
• SUP 1: 1.3025 High Oct 19
• SUP 2: 1.2863 Low Oct 14 and key near-term support
• SUP 3: 1.2846 Low Oct 7
• SUP 4: 1.2806 Low Sep 30

GBPUSD rallied sharply yesterday, tearing through resistance at 1.3083, Oct 12 high on positive Brexit newsflow. The move higher confirms a resumption of the upleg that started on Sep 23 and opens 1.3222. This level marks the former trendline support drawn off the Mar 20 low. The trendline was breached on Sep 9 and a return above it is required to strengthen a bullish theme. Firm near-term support lies at 1.2863, Oct 14 low.

EUR/GBP: All Eyes On Key Support

• RES 4: 0.9162 High Oct 7
• RES 3: 0.9160 1.0% 10-dma envelope
• RES 2: 0.9149 Oct 20 high
• RES 1: 0.9083 20-day EMA
• PRICE: 0.9019 @ 06:02 BST Oct 22
• SUP 1: 0.9012 Low Oct 21
• SUP 2: 0.9007 Low Oct 14 and the bear trigger
• SUP 3: 0.8967 76.4% retracement of the Sep 3 - 11 rally
• SUP 4: 0.8925 Low Sep 7

EURGBP reverted sharply lower yesterday and closed near session lows. The cross has traded below the 50-day EMA once again and attention turns to support at 0.9007, Oct 14 low and the near-term bear trigger. A break of 0.9007 would confirm a resumption of the downtrend that started Sep11 and open 0.8967, a retracement level. Key resistance has been defined at 0.9149, Tuesday's high. The outlook is bearish below this level.

USD/JPY: Sharp Sell-Off

• RES 4: 106.11 High Oct 7 and key resistance
• RES 3: 105.75 High Oct 20
• RES 2: 105.53/69 High Oct 21 / 50-dma / High Oct 20
• RES 1: 105.04 Low Oct 4 and a recent breakout level
• PRICE: 104.71 @ 06:18 BST Oct 22
• SUP 1: 104.34 Low Oct 21
• SUP 2: 104.00 Low Sep 21 and the bear trigger
• SUP 3: 103.67 76.4% retracement of the Mar 9 - 24 rally
• SUP 4: 103.09 Low Mar 12

USDJPY sold off sharply Wednesday resuming the downleg off the 106.11 high from Oct 7. A number of important short-term supports were cleared yesterday signalling scope for a deeper pullback that opens the key 104.00 handle, Sep 21 low. A break of 104.00 would signal scope for further weakness within the bear channel drawn off the Mar 24 high. Initial resistance is at 105.04, a recent breakout level. Firmer resistance is at 105.53.

EUR/JPY: Corrective Pullback

• RES 4: 126.46 High Sep 10
• RES 3: 125.97 76.4% retracement of the Sep 1 - 28 sell-off
• RES 2: 125.77 High Sep 15
• RES 1: 125.09/28 High Oct 9 / 61.8% of the Sep 1 - 28 sell-off
• PRICE: 124.03 @ 06:21 BST Oct 22
• SUP 1: 123.90 Intraday low
• SUP 2: 123.03/02 Low Sep 29 and Oct 2 / Low Oct 15
• SUP 3: 122.38/28 Low Sep 28 / 61.8% of the Jun 22 - Sep 1 rally
• SUP 4: 122.25 38.2% retracement of the May - Sep rally

EURJPY traded lower yesterday. The outlook remains positive though following recent gains that saw the cross pull away from support at 123.03/02, low prints between Sep 29 and Oct 15. The extension through 124.00 opens 125.09, Oct 9 high and the bull trigger. A break of 125.09 would expose 125.28 and 125.97, both retracement levels. On the downside, a 123.03/02 breach would trigger bearish pressure and open 122.38.

AUD/USD: Remains Below Trendline Resistance

• RES 4: 0.7243 High Oct 10 and the intraday bull trigger
• RES 3: 0.7182 Trendline resistance drawn off the Sep 1 high
• RES 2: 0.7170 High Oct 15
• RES 1: 0.7137 High Oct 21
• PRICE: 0.7099 @ 06:26 BST Oct 22
• SUP 1: 0.7021 Low Oct 20
• 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 despite yesterday's decent recovery. The Aussie continues to trade below trendline resistance drawn off the Sep 1 high. The line intersects at 0.7182 and the recent failure at the trendline continues to weigh on the pair. Attention is on the primary support and bear trigger at 0.7006, Sep 25 low. A trendline resistance break is needed to alter the picture and signal a stronger reversal.

USD/CAD: Bearish Conditions Intact

• RES 4: 1.3421 High Sep 30 and primary resistance
• RES 3: 1.3341 High Oct 7
• RES 2: 1.3251/59 50-day EMA / High Oct 15 and the bull trigger
• RES 1: 1. 3207 20-day EMA
• PRICE: 1.3158 @ 06:29 BST Oct 22
• SUP 1: 1.3081 Intraday low
• SUP 2: 1.3047 Low Sep 7
• SUP 3: 1.3038 Low Sep 2
• SUP 4: 1.2994 Low Sep 1 and the major support

USDCAD bearish conditions remain intact despite the most recent bounce. The pair has weakened through key support at 1.3099, Oct 13 low. The move lower confirms a resumption of current downtrend that started off the 1.3421 high on Sep 30. Moving average studies are bearish too, reinforcing the current climate. Scope is for a move towards the major support at 1.2994, Sep 1 low. Key resistance has been defined at 1.3259, Oct 15 high.

MNI KEY LEVELS

EUR/USD: MNI Key Levels

• $1.1966 Aug18 high
• $1.1929 Upper Boll Band (3%), Sep02 high
• $1.1917/19 Sep10 high, 76.4% 1.2011-1.1612/1.618% swing 1.1831-1.1689
• $1.1900/03 Sep15 high/Upper 1.0% 10-dma env
• $1.1881/82 Oct21 high/Sep16 high
• $1.1865/71 Intraday high/Upper Boll Band (2%)
• $1.1848/57 Cloud top/100-mma
• $1.1842 ***CURRENT MARKET PRICE 05:25BST THURSDAY***
• $1.1838 Intraday low
• $1.1822 Oct21 low
• $1.1798/96/87 50-dma/55-dma/100-hma
• $1.1773/60/52 200-hma/Oct20 low/21-dma
• $1.1703/94/89 Oct19 low/Oct16 low/Oct15 low
• $1.1685 Sep30 low, Sep25 high
• $1.1667/61 Lower 1.0% 10-dma env/Sep29 low

GBP/USD: MNI Key Levels

• $1.3319 Sep04 high
• $1.3280 Sep07 high
• $1.3265 Upper 2.0% 10-dma envelope
• $1.3219/34 1.618% swing 1.3083-1.2863/Upper Bollinger Band (3%)
• $1.3177 Oct21 high
• $1.3153 Intraday high
• $1.3135/38 Upper 1.0% 10-dma env/Upper Boll Band (2%)
• $1.3128 ***CURRENT MARKET PRICE 05:36BST THURSDAY***
• $1.3124 Intraday low
• $1.3083/82 Oct12 high/Cloud top
• $1.3064 Oct14 high
• $1.3030/25 Oct15 high/Oct19 high
• $1.3019/16 55-dma/50-dma
• $1.2987/86/79 200-hma/100-hma/Oct20 high
• $1.2973 Cloud base

EUR/GBP: MNI Key Levels

• Gbp0.9153/57/62 Upper 1.0% 10-dma env/Sep30 high/Oct07 high
• Gbp0.9137/49 Oct21 high/Upper Boll Band (2%), Oct20 high
• Gbp0.9084/87 21-dma/Cloud top
• Gbp0.9077/79/80 100-hma/Cloud base/Oct20 low
• Gbp0.9061/63/65 55-dma/10-dma/200-hma, 50-dma
• Gbp0.9044 100-dma
• Gbp0.9028 Intraday high
• Gbp0.9020 ***CURRENT MARKET PRICE 05:42BST THURSDAY***
• Gbp0.9015/12 Intraday low/Oct21 low
• Gbp0.9011/07 Lower Boll Band (2%)/Oct14 low
• Gbp0.8977/72 Lower Boll Band (3%)/Lower 1.0% 10-dma env
• Gbp0.8967 Sep08 low
• Gbp0.8925 Sep07 low
• Gbp0.8900/88 Sep04 low/200-dma
• Gbp0.8881/66 Lower 2.0% 10-dma env/Sep03 low

USD/JPY: MNI Key Levels

• Y105.45 21-dma
• Y105.31 200-hma
• Y105.25 100-hma
• Y105.10 Cloud Tenkan Sen
• Y105.06 Cloud Kijun Sen
• Y105.04 Oct14 low
• Y104.75/77 Intraday high/Lower Boll Band (2%)
• Y104.72 ***CURRENT MARKET PRICE 05:51BST THURSDAY***
• Y104.54/43 Intraday low/Lower Boll Band (3%)
• Y104.34 Oct21 low
• Y104.22 Lower 1.0% 10-dma envelope, 1.618% swing 104.00-106.11
• Y104.00 Sep21 low
• Y103.94 200-mma
• Y103.16 Lower 2.0% 10-dma envelope
• Y103.09 YTD low

EUR/JPY: MNI Key Levels

• Y125.00 Oct20 high
• Y124.93 Fibo 38.2% 149.78-109.57
• Y124.84 Oct21 high
• Y124.79 50-mma
• Y124.70 55-dma
• Y124.64 50-dma
• Y124.03/06/09 Cloud Tenkan Sen/100-hma/Intraday high
• Y124.02 ***CURRENT MARKET PRICE 05:57BST THURSDAY***
• Y123.98/93/90 200-hma/21-dma/Intraday low
• Y123.77 Oct15 high
• Y123.74 Cloud Kijun Sen
• Y123.71 Oct16 high
• Y123.68 Cloud base
• Y123.53 100-dma
• Y123.37 Oct19 low

AUD/USD: MNI Key Levels

• $0.7243/44/54 Oct09 high/200-wma/Sep17 low
• $0.7235/41 Sep22 high, Oct12 high/Upper Boll Band (2%)
• $0.7218 Oct13 high
• $0.7191/95/99 Oct14 high/55-dma/50-dma, Upper 1.0% 10-dma env
• $0.7168/70 Cloud base/Oct15 high
• $0.7126/37 21-dma/Oct21 high
• $0.7105/19 100-dma/Intraday high, 200-hma
• $0.7093 ***CURRENT MARKET PRICE 06:01BST THURSDAY***
• $0.7085/80 Intraday low/100-hma
• $0.7057/47 Lower 1.0% 10-dma env/Oct21 low
• $0.7021/19/06 Oct20 low/Lower Boll Band (2%)/Sep25 low
• $0.6985/73 Lower 2.0% 10-dma env/Jul20 low
• $0.6964/63 Lower Boll Band (3%)/Jul16 low
• $0.6921/14 Jul14 low/Lower 3.0% 10-dma env
• $0.6897 100-wma

USD/CAD: MNI Key Levels

• C$1.3341/45/52 Oct07 high/100-dma/Sep29 low
• C$1.3320 Cloud top
• C$1.3288 Upper 1.0% 10-dma envelope
• C$1.3259/73 Oct15 high/Oct08 high
• C$1.3238/39 Oct16 high/21-dma
• C$1.3202/04/11 50-dma/Oct20 high/55-dma
• C$1.3175/78 50-mma/Intraday high
• C$1.3168 ***CURRENT MARKET PRICE 06:05BST THURSDAY***
• C$1.3163/61/57 100-hma/Cloud base, 200-wma/200-hma
• C$1.3139 Intraday low
• C$1.3081 Oct21 low
• C$1.3049/38 Lower Boll Band (2%)/Sep02 low
• C$1.3025 Lower 1.0% 10-dma envelope
• C$1.2994 Sep01 low
• C$1.2976/75 Jan08 low/YTD Jan01 low

OPTIONS: Expiries for Oct22 NY cut 1000ET (Source DTCC)

• EUR/USD: $1.1600-10(E1.7bln), $1.1644-50(E2.0bln), $1.1665-85(E1.3bln), $1.1710-20(E593mln),
  $1.1795-00(E1.5bln), $1.1845-50($712mln), $1.1875-80(E551mln), $1.1900(E661mln), $1.2000(E550mln)
• USD/JPY: Y104.00-10($2.2bln), Y104.25-35($803mln), Y104.50-55($2.9bln), Y104.95-105.00($1.2bln),
  Y105.24-30($1.6bln), Y105.40-50($1.2bln), Y105.80-106.00($2.7bln)
• GBP/USD: $1.3300(Gbp433mln-GBP calls)
• AUD/USD: $0.6850(A$840mln), $0.6890-0.6900(A$686mln), $0.6950(A$853mln), $0.7000(A$509mln),
  $0.7075-80(A$504mln)
• AUD/JPY: Y76.44(A$2.1bln), Y77.95(A$898mln)
• EUR/AUD: A$1.6565(E816mln)
• USD/CNY: Cny6.80($810mln), Cny6.95($922mln)

Larger Option Pipeline

• EUR/USD: Oct23 $1.1800(E1.1bln), $1.1840-50(E1.4bln), $1.2000(E1.4bln); Oct26 $1.1500(E1.8bln),
  $1.1650-60(E1.6bln); Oct28 $1.1800-05(E1.4bln), $1.2000-05(E2.9bln); Oct30 $1.1800(E1.1bln), $1.1850-60(E1.4bln), $1.1950(E1.7bln-EUR calls), $1.2000(E1.1bln)
• USD/JPY: Oct23 Y103.00($1.3bln), Y105.40-60($1.2bln); Oct26 Y103.95-104.00($2.2bln-USD puts), Y105.30-40($1.7bln), Y105.60-75($1.2bln), Y106.95-107.00($1.6bln); Oct27 Y105.00($1.3bln), Y106.00-05($1.2bln);
  Oct28 Y104.90-105.00($2.4bln); Oct29 Y103.20-25($1.6bln), Y104.00($1.3bln), Y105.55-65($2.2bln), Y106.00($1.2bln); Oct30 Y104.50($1.9bln), Y104.80-85($1.1bln), Y106.00-05($2.2bln)
• EUR/JPY: Oct26 Y122.80(E1.2bln)
• GBP/USD: Oct23 $1.3090-1.3100(Gbp1.1bln-GBP calls)
• EUR/GBP: Oct26 Gbp0.8900(E880mln), Gbp0.9000(E1.8bln-EUR puts)
• AUD/USD: Oct27 $0.6680(A$1.1bln); Nov02 $0.7140-45(A$1.5bln)
• AUD/JPY: 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)