Interbank open

eurusd opens at 1.2847, audusd at 1.0373, gbpusd 1.6150

Barclays- Risk reward for eur longs unfavourbale

They say that even if the Spanish news from Budget and bank stress test was positive, there is still a lot of uncertainities sorrounding the euro
They also believe, Scepticism remains on too many fronts. Are the new fiscal deficit targets feasible given the optimistic growth assumptions? Will the elections in Galicia and the Basque Country on 21 October and tension in Catalunya delay the request?

However they add that when Spain formally requests for bailout, eurusd might resume rally towards 1.35000. They expect Spain to request for bailout after October 18th, but in the short the risk reward is unfavorable.

eurusd

Eurusd bounced off support from 200MA on the daily chart. break below targets a move lower. below 1.2751 it shifts back into the channel and downtrend might resume. Break above 1.2910 targets high at resistance 1.2970 and further psychological level at 1.3000. currently friday price action was bearish and we had offers coming in above 1.29000 there the safer play ceteris paribus is shorting rallies. Good luck in the week ahead.

EURUSD

It closed at 1.2857 on Friday. There were reports of heavy selling from an asian name above 1.2900(suspected to be related to chinese), there were also reports of swiss banks and real money on the offer(reported here) at around 1.2940 area. Heavy offers from European corps at 1.2990/00 level went untouched. Pair closed bearish under 1.2915 level. Next level of important support is at 1.2826 and a slip below the level is likely to target lower, rise above 1.2910 risks targeting the offers up at 1.2990/00 level. Specs are still piling into shorts..

CREDIT SUISSE ON GOLD

"The market has already come up 12 percent since mid-August, It's natural to expect some consolidation before it pushes up through $1,800," said Credit Suisse's Kendall. "But the pull is definitely to the upside now."

HEDGEFUNDS AND SPECULATORS PULL OUT MORE THAN 5BILLION $ FROM COMMODITY MARKET

Here is the story--> link

CABLE

GBPUSD finally broke through major support but bids from sovereigns at 1.6100/10 area slowing down the move lower.

audusd update

decent sized offers being filled above 1.0460. hearing there is a mix of US names selling in decent size. more offers ahead at 1.0480/00 area

Interbank traders favoring shorts intra-day, but well, that's just their view given that its a friday

eurusd update

EUROPEAN corps sell orders(decent sized) in eurusd at 1.2990/00. real money in the mix of sellers around recent highs

macrofunds bids at 1.2900

Info update

Swiss banks selling eurusd near highs. more offers 1.2980/00

update

ACB buying usdjpy near 77.50. very large stops seen in cable above 1.6320

large offers in audusd filled at 1.0460, more at 1.0490/00 area

CITI BANK

Citi's fair value model prices eurusd at 1.2550.

ORDERFLOW

USDJPY: corporate bids seen at 77.50. Tokyo accounts quiet ahead of the risk event and year end flows. Offers at 78.00 and 78.20(CTAs)

EURJPY:  bids are at 99.90-00, 99.70, offers are at 100.60-70, 101.00 and 101.20-30

EURUSD: currently at 1.2912. Barcaps had offers at 1.2910/20. More are ahead at 1.2940 and 1.2980/00 level.

AUDUSD: reports had sizeable offers at 1.0460 level and 1.0440(filled)

GBPUSD: china sold yesterday at 1.6260s. US names were sellers today in the morning at 1.6200 behind the dip to 1.6140s. Now resistance is at 1.6260/70 level. Real money were notable dip buyers on the move lower today.

USDJPY

solid bids seen in usdjpy at 77.10. offers up at 78.00 and more from CTAs at 78.20

EURUSD

EURUSD at 1.2890 having earlier hit major support at 1.2825. Barclays have sell order at 1.2910/20. light bids nearby at 1.2870. Real money were dip buyers in the move down but sellers still re-emerging above 1.29000

more sell orders at 1.2980/00 area

FX-CONCEPT

Fx concept  founder and CEO of the world’s largest currency hedge fund John Taylor on eurusd- "I will always be bearish about the eur".

 3 weeks ago they had institutional positioning as bearish between 1.28000/1.30000 and were advising on bearish entries for a run down before the market went through 1.3000 on QE announcement. This remains largely their opinion, we will wait and see.

UPDATE ON BANK OPINION

citi see eurusd testing 1.2826 especially if usdchf trades above 0.9400. barcap says support at 1.2825/35 will not hold because of the large stops building below if the area is tested

Real money remain steady dip buyers

info

Macrofunds selling eurusd. M/E also seen selling euraud. sizeable offers in audusd up at 1.0430

Rumour

Rumour is there that china will announce an additional round of 8 trln stimulus, goes on to day that they will hold a conference at 0700GMT. heavy sell orders were reportedly at 1.2900 area, cable 1.6200. audusd 1.0420s

EURUSD update

Very Large stops in eurusd below 1.2845 more below 1.2790

European semi-officials seen offering into 2885/75 region. ACBS seen trying to fade rally at 2860s. French name was earlier buyer below 2850

eurusd

BIS sold eurusd again at 1.2876

RUMOUR

Rumour is there that there is a large portfolio shift from equities into bonds  30-100 bln. Shift originated from the fx market which is in line with the risk off sentiment. Bids seen into 1.2950 area

AUDUSD

Very heavy macro-funds stoploss sell orders in audusd below 1.0330

Info updates

GBPUSD: US names offers at 1.62000 area. sovereign bids at 1.61000 area

info update

French and US banks said to have sold in the recent move down. Large stops below 1.2850. Bids in usdjpy seen at 0.7750

Update: Hedgefunds buying 1-week out of the money calls. Toyota also said to have announced plans to stop exporting to China

Trades

someone asked me in an email the best play right now. In my humble opinion, i think the market is a bit bearish and would favor shorts into 1.2960s with stop above 1.3010 because 1.3000 is a physiological level. However, that is my opinion and should not be taken as an affirmative trade recommendation. 4 prime brokers were saying they were favoring audusd shorts but one reported that most of they big accounts are reluctant to take shorts fearing the QE effects, sell orders from funds and RBA have already been filled and bids now at 1.0380/00 area . All the best trading. bids still now scattered at 1.2930 area and more at 1.2900. technical resistance at 1.2972 area

Info update

BIS shorts eurusd in 1.2960s. the pair tripped large stoplosses at 1.2950... offers now in the 1.2980/00 region. Cable still running into offers from ACBS at 1.6240/60 area

GBPUSD update

leveraged names still selling into 1.6260 area

info update

China selling cable and sizeable sells from asian names seen in eurusd above 1.29000

Info update

Good asian sells above 1.2900 seen going through. more offers at 1.2940

BIS said to be bidding eu. So i guess some range trading before break... 

Flows

large stops seen below 1.2850 and above 1.2970. Earlier move lower was triggered by big real money names. Asian names as well said to have been selling eurjpy alongside corporates. Major support now at 100.20. Bids in audusd seen into 1.0380 level.

Update: corps/ME bids at 1.29000 level slow the move lower. They were earlier filled

YEN

market talk that Boj is checking the order sheets doing the rounds. But still unlikely to aggressively intervene near-term. support comes in at 77.65 with sizeable stops below

AUDUSD

Bunch of sell orders mix from RBA commercial, hedgefund and models circa 1.0445/55

Azumi out on reshuffle

Rumour that  Maehara will take over from Azumi as the finance minister doing the rounds at the moment. He is likely to be more aggressive in weakening the yen

EURUSD info update

Russian names shorting into the rally at 1.2925/30 level

reported at 1.2919, now at 1.2888, Morgan stanley's stop is at 1.2880 :-). if only we can run it over. major support at that level

GOLDMAN SACHS- main focus on French/Spanish budget

"The main market movers for the week are likely to be the 2013 budget announcements on Friday in both Spain and France" - Goldman Sachs.
It is because both countries continue to hold the larget budget deficits in the eurozone.
Significance revolves mainly around the Spanish budget announcement which may contain a simultaneously published reform program.
That could subsequently become the basis of a future Memorandum of Understanding (MOU), in case the Spanish government asks for support under the EFSF/ESM umbrella.

from

JP Morgan commodity currencies fair values according to quants

JPM Short-Term Model For USD/CAD- fair value at 0.99-1.5% above the current spot level.
Model's variables include: 2Y yield spread (vol adjusted), WTI crude, and the CRB commodity index. (Makes sense why the longterm hedgefunds from UK and US were buying
JPM Long-Term Model For USD/CAD: fair value at 1.00- 2.5% above the current spot rate.
Model's variables include: the TSX equity index, global manufacturing PMI, and the Bank of Canada commodity price index.
JPM Short-Term Model For AUD/USD: fair value at 0.97- 7% below today’s level.
Model's variables include: 2Y yield spread (vol adjusted) and the CRB metal price index.
JPM Long-Term Model For AUD/USD: fair value at 0.90- 14% below today’s level.
Model's variables include: 10yr spread, Chinese manufacturing PMI, global manufacturing PMI, and the RBA commodity index.
JPM Short-Term Model For NZD/USD: fair value at 0.83, which is close to the current spot level.
Model's variables include: 2Y yield spread (vol adjusted), CRB food index, and milk futures prices.
JPM Long-Term Model For NZD/USD: fair value at 0.72-13% below the current level.
Model's variables include: the global manufacturing PMI, China manufacturing PMI, and ANZ world commodity price index.

more 

their year end forcasts on the other pairs are EURUSD- 1.30 GBPUSD- 1.62 USDJPY- 78

MORGAN STANLEY maintaining is bullish bias

The bank says that it is still recommending buying eurusd dips for target at 1.3400. They had earlier las week bought at 1.2990 with stop at 1.2880

GBP-incase you are wondering

Incase you are wondering where the caable strength is coming from, there is talk on the wires from traders that there is a HBSC dividend payout and 3billion farming subsidy linked to a UK clearer and also British EU budget rebate-related demand

USDCAD

the pair is back above 0.9800. Last week i reported that there were UK/US hedgefunds buying usdcad and as well longterm hedgefunds buying below 0.9700. Resistance now comes in ahead of previous high of 0.9815. spot at 0.9812

Info Update, EURUSD, GOLD

Model buyers in eurusd seen earlier today before push lowers but imho, market needs to push back above 1.2919 to maintain any bullish bias. Barcap thinks that eurusd below 1.2920 is targeting 1.2830 and needs to close above 1.30000 for a push 1.3350 medium-term. Gold specs on the other hand are said to have increased heavily creating bias for push lower to trigger stops at 1752 level and below 1748 level

currently according to citi 52% are short on eurusd which makes the sell side slightly over stretched

CITI on Eurusd

They see further downside risk for three reasons
1. Because of the spanish budget on thursday, they think eurusd might push lower in advance
2. They dont think Spain will ask for bailout ahead of the 21st October elections (which is pretty much in line with what a Spanish government insider was saying) :-)
3.Spanish bank stress test due on Thursday

Info update

stops hit through on the move below 1.2915(reported here earlier). sovereign bids continue to hold audusd above 1.04000 with offers from hedgefunds still in the 1.0450/60 region. General positioning in eurusd has 52% as sellers which makes it vulnerable to a correction but hold below 1.2919 will be bearish for the pair. bids from semi-official and japanese names in usdjpy seen at 78.00 level.

AUDUSD

Mix of buy orders from SNB and sovereigns at 1.0400/1.0410 area. hedgefunds and RBA commercial sell orders at 1.0450/60 region ahead of more offers into the 1.0480/00 region

EURUSD

Stops building up below 1.2915 level

Interbank quotes

EURUSD: 1.2970, AUDUSD: 1.0446 GBPUSD: 1.6232 USDCHF:0.9336

UPDATE: currently at 1.2969, important area of support to note imho  1.2963

MORGAN STANLEY-Staying long on eurgbp from 0.7850

morgan stanley is staying long eurgbp with target at 0.8200 and stop at 0.7750

Credit Agricole- EURUSD may hit 1.3170 on positive spanish news

The investment bank says that if the news expected from Spain next week will be positive, it might trigger an upmove to 1.3170.

GOLD

Billionaire investors George Soros and John Paulson increased their stakes in the SPDR Gold Trust, the biggest gold- backed exchange-traded product, during the second quarter, filings showed, while central banks from Russia to South Korea are also adding bullion to reserves. Central banks may purchase close to 500 tons this year after becoming net buyers in 2009, according to the World Gold Council.

Bank of America thinks gold may reach 2400$ by 2014 on fed easing with deutche bank predicting 2000$ within first half of next year. More here

USD shorts highest since august 18th

 According to CFTC data released on Friday, USD shorts increased.
    The value of the dollar's net short position rose to $10.05 billion in the
week ended Sept. 18, from $6.18 billion the previous week. Which is the largest
since Aug. 30 and the second straight weekly net short U.S. dollar position.
  
    Investors have sold U.S. dollars in the wake of the Federal Reserve's
commitment to inject further stimulus to a sluggish U.S. economy. The dollar
index has fallen 2.3 percent so far this month extending its August losses.
    Meanwhile, net euro shorts continue to dwindle to 73,482 contracts this
week, as investors were encouraged by European Central Bank action to lower
borrowing costs in Spain and Italy through bond purchases. The euro so far has
gained 3.2 percent this month.

more here--

Agricole- Spain to be on focus next week

Investors’ focus will likely remain on Spain next week, for a couple of reasons.

1. the full detailed results of the independent bank stress tests are expected to be unveiled, with recent press reports suggesting that actual capital needs by banks could end up well below the total EUR100bn official credit line available, potentially below EUR70-80bn.

2. Moody's is due to conclude its ratings review by the end of the month. The threat of a rating cut into junk territory may have abated with ECB’s OMT available under conditions and lower borrowing costs as a result, but clearly those are not the only factors the agency takes into account while recent re-widening of peripheral spreads still reflects the market’s nervousness.

S&P representative recently declared that it was "unlikely that the Spanish rating would go down to non-investment grade in the near future". The Spanish government will present its 2013 budget on Thursday (27 September) which aims to cut the country's deficit down to 4.5% of GDP next year. Among possible measures, the wealth tax which was reinstated last year is expected to be toughened by lowering the minimum threshold to EUR108k. The budget is a good occasion to pave the way for a rescue plan with the EU authorities, hence a particular attention should be paid on structural reforms, as requested by the EU, rather than new taxes and spending cuts.

more here

EURUSD

Week summary or orderflow. There was a large hedgefund seller at 1.3010 earlier this week alongside a US investment bank who was seen selling sizeable amounts at 1.3000, reported here during early European session. Earlier today we had a run up  on stale longs trying to exit their long positions according to traders which was further boosted by talk of middle east usual buying. 1.300 is a critical level. Goldman sachs took profit after earlier moving stop to 1.2880 probably because of the spain talk which will likely be the market focus in the near future. I talked to a friend who trades for a goldman sachs and is very bearish on the pair as sees continued weakness of the pair. They earlier posted a 3month forcast target of 1.2500. Morgan stanley went long at 1.2990 with stop at 1.2890 with target at 1.3400. Next week focus is on the physichological pivot area of 1.3000 where market needs to stay above to maintain any bullish momentum, fast money reportedly flipped short on the break below 1.2963.

Overall there is a general feel of bearish institutional positioning and will be only negated if market trades above 1.3080 again. Sell orders still sizable between 1.3050/3100 area encase we get that far up. Goodluck in the week ahead and will keep you posted on instituitional intra-day orders.

info update

offers lined up at 1.3100/3050 with large stops above 1.3050

SNB

SNB said to main euraud seller on the move lower as part of reserve diversification

Orderflow

Stops in audusd above 1.0500 that were very heavy have been ran over(reported here earlier). Russian central bank and ME players said to have bought a chunk in recent move up(behind recent move up). A US investment bank was in the mix of sellers around 1.3000 on the earlier move lower from 1.3000. offers in the 1.3050 area. Sells from the US investment bank were said to be decent sized. offers still seen in the 30/50 region props using 1.2963 as pivot area now

info update

RBA still overall sellers of audusd, very large stops are seen above 1.0510. yesterday there were reports of japanese houses selling yen crosses across the board. offers in eurusd from ACBs related to reserve diversification were said to be lined up at 1.2975/00. Their involvement in this market has been largely seen to be USD recycling, from exports as well as  intervention mainly to protect their currency and are known to hold a sizable amounts of USD in their reserves, so to see them on the right hand side of the market confirms that they are enjoying their overwhelming size and exposure in the market at the current time and SNB offers as well above 1.30000. the russians were dip buyers yesterday with macrofunds being mainly the sellers behind the push lower

currently instituitional positons in play, russian central bank buy below 1.2950, real money funds at 1.0460

BIS selling eurusd as well

japanese investment houses main sellers of jpy crosses

morgan stanley buys eu with stop at 1.2890 looking for 1.3400. russian buyers emerge as well but short term specs still piling into shorts on rallies

uk/us hedgefunds behind the push above 0.9800 in usdcad

eurusd

fastmoney now pilin g into shorts on break of 1.2963 level. last night real money funds were decent buyers of audusd at 1.0460 but short term specs still piling into shorts

eurusd now at 1.3000 level, the european investment bank reported that bids on their order book as still spread out in this region with most coming in at 1.2970 from probably real money or sovereign accounts.

eurusd

for bulls out there, one European investment bank bought 1.3billion euros of eurusd at 1.3080 says they think eurusd is targeting 1.3600, they were buying on behalf of a mix of investors, sovereigns totalling to around that figure... further bids from same names at 1.2970, russians were also buying the dip with model funds and cleares being the main sellers.their order book has buyers still dominating

USDCAD

longterm hedgefunds were reportedly buying usdcad between 0.9600/0.9700

FB

longterm A-rated hedgefund seen buying FB

eurusd back to the region where the Large Uk clearer was selling today morning which might provide some resistance. It earlier got a boost from russian and sovereign buyers reported earlier. Resistance is at 1.3080 with offers coming in at 1.3100 area.
 UPDATE
 commerzebank order book bearish all the way to 1.2880 with sellers exceeding buyers. its not a trade recommendation but just know its out there.. important area of resistance is 1.3080, pivot at 1.3100 and support at 1.2980/90

sell orders reportedly clustered above  1.0500 in audusd, probably good enough for 10+pips scalp shorts unless they shift.. macrofunds still keen on buying into dips

UPDATE: real money reportedly making decent sized buys on the recent dip

JP morgan

"EUR/JPY latest break above key-resistance between 100.67 and 101.65 -0. 38.2 %/-last major top in  provides a strong reversal signal . Confirming this reversal is the daily lagging line which displayed two consecutive higher close above the cloud currently at 101.63.
Such a break, according to JPM, gives room to challenge the last major resistance barrier on big scale at 107.36/108.60.
On the downside, breaks below 100.67 & 99.50-minor 38.2 %would on the other hand reverse the positive bias again"

Goldman: EURGBP to hit 0.8700

they sighted the following reason
1.Euro area tensions have eased following the ECB’s announcement of its new sovereign bond buying programme, and EUR/GBP has risen in recent weeks.
2. While implementation risk remains in Europe, 'safe haven' correlations for GBP have now largely disappeared.
3. The MPC continues to undertake monetary easing and we expect a new round of quantitative easing in November.
4. the GBP is no longer significantly undervalued against *GSDEER 'fair value' estimate, eroding some of its external competitiveness and providing additional motivation for monetary stimulus.

US names on monday leaked information that they are still holding longs taken circa 0.7963 with targets at 0.8290. Lets wait and see how it turns out

talk of a major US banks said to be closing its long position, am guessing must be Goldman, merely guessing, they had a long from 1.2153 so its reasonable for them to to do that, nice 847pips run

UPDATE: it actually is goldman according to bloomberg

talk is that eur weakness was mainly attributed to SNB  reserve diversification. they were notable sellers from today's high

gbpusd

sovereign buying interest seen circa 1.6220 area. normally if they are large enough, the area might see some rejections forming on smaller timeframes. further bids circa 1.6200/05 area might slow things a bit or turn the pair around

Rumours

Rumours in Spanish government offices:

1. They would ask for a bailout after October 21 (Galicia elections) or November 3 (US Elections).

 2. If they don’t ask for the bailout after these dates, they will not ask for it and they will return to Peseta currency breaking the EUSSR. The whole banking system in Spain have got integrated in their baking systems/platforms the ESP code and the FNMT has started a new program to print banknotes and make new coins.

 -President, Vicepresident and some ministers are totally oposed to the rescue.

 3. national surveys have released that the 79%-84%-69% wants the return to the national currency Peseta.

 The street feeling in Spain is that Greece was robbed by German bureaucrats and Germany is makeing a 4th reich. People are starting to be tired with this situation and last week the army send a letter to the media to say that they will protect them and they are very angry with this situation.

probably this is what goldman will be looking for for their 1.2500 3month target forcast ;-)

picked from forexlive.com

UK real money fund countering eurusd buyers

update: posted when it was at 1.3069 now at 1.3029 in the area where it was earlier reported sovereign and russian bids were. sell stops below 1.3 more bids at 1.2990/80 are. among sellers were macrofunds as well. Prop traders now using physichological 1.3 area as pivot area 

morgan stanley

  Morgan stanley says usdjpy is heading for 84.00 and their first upside target is  82.00. They expect eurjpy to lead the move higher

Karen Jones says usdjpy has now broken the 6 month resistance and early september high and that we are now targeting 0.7966 and 0.8063 with support at 0.7800(where suspected japanese offcial bids are at)  and 0.7765

orders

offers from uk clearers and funds at 1.6280/00 area in #gbpusd with bids at 1.6230 area,  SNB offers in #eurusd between 1.3100/20(usual reserve diversification). Sovereign bids still seen below 1.3030 area. mix of stoplosses and stoploss sell orders below 1.3 ahead of further bids at 1.2980/90

short-term players mainly shorting into audusd rallies but macrofunds dip buyers

eurusd, eurgbp

Middle east seen buying eurusd below 1.3030 alongside russian names. bids were decent sized. european names seen bidding eurgbp with corporates being the main sellers on the push down

info update: reserve managers seen trying to absorb sell orders in audusd at 1.0400 area. eurusd: fast money was seen piling into eurusd on break below 1.3080, but props still bullish

hedgefunds seen buying eurusd 1.3050 level with russian names as well buying below 1.3050 in latest dip

talk that there are sovereign buy orders in the 1.3060 region with bids clustered between 3080/60

usdjpy technical perspective

talk that japanese banks have been buying usdjpy for the japanese central bank doing the rounds and that corporates quickly cancelled their sell orders(including the japanese names) which triggered the sharp move up

in the fibo resistance area

Latest explanation on oil drop is that oil stalled below $100 and once 100 or so lots were sold off, it started a spill and a total of 1300 lots were taken off

goldman booked 8.5% profit on their eurusd long and moved stop to 1.2885. they also think eurusd may correct to 1.2500 in 3 months time

US names holding onto eurgbp longs for 0.8290 area target

bids at 1.3070/80 area said to be pretty decent sized

78.00 option expiry in usdjpy said to be sizeable and will be expiring in newyork

momentum funds seen selling into audusd rally towards the bids at 1.0515 area with real money bids said to be lying around 1.0470/60 area

morgan stanley out recommending buying into eurusd dips for 1.34 and sees dips being limited to 1.3020. they also went long audusd at 1.0530 and say may be tempted to change into short position considering the fundamentals sorroundingchina

decent bids seen into 1.3080/90 area with sell stops below. commerze bank orderbook showing more sell orders that buy orders at 1.3120 area with the ratio being the same until 1.2900 where they kind of balance out

japanese names offers in usdjpy at 78.50 with large expiry at 78.00

reserve managers seen selling into audusd rally

SNB seen selling eurusd at 1.2927 as part of rebalancing move. Sovereign bids in audusd said to be at 1.0450 area with stops below 1.0435. Offers from corporates in usdjpy seen at 78.20 level with a big german name and sovereign said to have been selling around the same level yesterday

instituitional sell orders lined up in eurusd all the way to 1.3000