Focus Remains on Greece Developments

Briefing
The dollar was mixed in Asia, marking modest gains against the yen on firmer yen crosses but remained almost flat on the euro.

Euro-dollar lost ground at the start of the morning's session with a German name selling from $1.3381 to a $1.3317 low, before bids from Japanese accounts then appeared, from $1.3320, and sparked a modest short-covering bounce to a $1.3398 high. Euro-dollar eased as offers at $1.3400 capped its rebound, and traded between $1.3365 and $1.3380 ahead of the European open, currently around $1.3372.

Dollar-yen ran into some early profit-taking interest at Y94.00 at the start of the day, although the retreat was limited to Y93.93. The pair marked a Y94.37 morning high, but was then limited by sell orders from corporate accounts spotted just ahead, from Y94.50 to Y94.80.

Sterling retained its recent buoyant tone through Asia, extending its recovery off Friday lows of $1.5295 to $1.5468, and holding just off highs into Europe.

It is a very light data calendar today with attention remaining on Greek developments. FOMC on Wednesday is the next major point of interest ahead of US GDP Friday.

Euro
Euro-dollar closed NY Friday at $1.3372, having traded to a recovery high late in that session of $1.3400 on optimism over the proposed Greek loan provision. Rate came under early downside pressure into Asian trade, a major German name linked to heavy sales that took the rate down to a session low of $1.3317 before running into suggested option related demand. One trader notes decent sized option maturities for today with strikes at $1.3325, $1.3300 and $1.3280, possibly linked to the demand interest. Spec shorts covered back, with the same German name a noted buyer as the rate edged back above $1.3340, gaining pace ahead of the Tokyo fix and topping out at $1.3398 before easing back to $1.3360.

The euro managed a quick recovery to $1.3380 ahead of the European open, but fresh sell interest quickly emerged to knock rate back to $1.3350 into the session. The euro currently trades around $1.3358. Offers are seen placed towards $1.3400, with talk of stops on a break of $1.3410. Mix of offers and stops noted at $1.3440, the sell interest said to extend to $1.3450. Support noted from around $1.3320 (Asia low $1.3317), through to $1.3280, with one trader noting stronger interest begins from below $1.3295. Stops noted on a break of $1.3280.



RES 4: $1.3819 High 17 Mar
RES 3: $1.3710 Current top of Bollinger band
RES 2: $1.3692 High 12 Apr
RES 1: $1.3475 21-day moving average

CURRENT LEVEL: $1.3367

SUP 1: $1.3201 Lows 22, 23 Apr
SUP 2: $1.3111/28 Minor support line from mid-Feb, 50% projection
SUP 3: $1.3054/57 Supp line from Feb 2002, 38.2% of $0.8232 to $1.6039
SUP 4: $1.3022 Projection calculation from Dec, Jan downmoves

Yen
It was a moderate session for yen overnight with dollar-yen opening initially off of Friday's high levels and trading down to Y93.85. The dip was bought into and dollar-yen traded up to Y94.37 on cross-yen demand. Traders are wary of the weekly Ichimoku cloudline at Y94.28 level and note that Friday was the first time the pair had traded above the weekly cloud since August 2007. Offers are said to be stacking up ahead of Y94.50 through to Y95.00 whilst bids are building around Y93.80 area.

Cross-yen tested higher once again overnight after initially trading down to Y125.30 as traders looked at the Greek rescue package with a slight negative view. Traders note a lack of detail on the deal and questioning whether or not this will resolve Greece's problems long-term adding to the euro's woes. The weakness was short lived and a spike above Friday's high to Y126.30 ensued, offers capped and the cross moved back sub Y126.00 to open Europe around Y125.89 level.



RES 4: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 3: Y95.04 Minor resistance line from Jan high
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y94.35 Hourly high

CURRENT LEVEL: Y94.22

SUP 1: Y93.30/60 21, 5-day moving average
SUP 2: Y92.95 Tenkan line of the Ichimoku cloud
SUP 3: Y92.15 Minor support line 4 Mar
SUP 4: Y91.60/67 Low 19 Apr, 61.8% of 18 Mar to 2 Apr rally

Cable
Opened Asian trade around $1.5380 and was initially pressed back to lows of $1.5365 as rate tracked euro-dollar's early fall. However, sterling retained its recent underlying buoyant tone which allowed rate to rebound, the move back up aided by sterling-yen demand. Rate met resistance around $1.5440 before edging on to $1.5468 ahead of the European open. Rate has been pressured back to $1.5425 into early Europe, traders noting macro supply hitting the early market.

Traders make note that ongoing dividend linked demand from a UK oil company expected again today, with talk also that a UK clearer has similar interest for its dividend needs. Cable currently trades around $1.5445. Offers seen placed from around the overnight high at $1.5468 through to $1.5476 (April 22 high), with stops above $1.5480. A break here to open a move toward $1.5500/10 ahead of $1.5525. Support $1.5325/15.



RES 4: $1.5650 100-day moving average
RES 3: $1.5620 50% of 2010 decline
RES 2: $1.5580/93 High 23 Feb, 38.2% of Nov/Mar move
RES 1: $1.5522 High 15 Apr, Bollinger band

CURRENT LEVEL: $1.5432

SUP 1: $1.5310 21-day moving average
SUP 2: $1.5163 50% retracement
SUP 3: $1.5130 Low 6 Apr
SUP 4: $1.5078 61.8% retracement of April recovery

Euro Remains Under Pressure

Briefing
The euro remained under pressure through the Asian session Thursday, the single European currency still pressured by concerns over Greek debt but the downside still cushioned by reported Asian sovereign demand. Some suggest this demand is linked to a $1.33/1.36 option range play.

Euro-dollar squeezed to an extended low of $1.3314 (NY low $1.3326), then trading around $1.3326 into early Europe.

The Yen sees pressure on both sides, with Geithner's reported detour to China next week further sparking speculation of yuan appreciation, with the yen seeing proxy demand.

The Aussie was boosted overnight on the release of jobs data, coming in at the expected level but enough to prompt further demand.

UK Halifax housing data at 0800GMT, UK IP at 0830GMT followed by eurozone retail sales at 0900GMT provide the morning's highlights ahead of the BOE and ECB rate announcements at 1100/1145GMT. No change widely expected in both with 1230GMT comments from Trichet being the main interest.

Euro
Euro-dollar opened Asia at $1.3345 and managed to edge to $1.3348 to post session highs at $1.3348 before reversing lower on fresh euro-yen sales. Rate pushed through Wednesday's lows at $1.3326 to extend recent pullback to $1.3314, but move lower again was seen meeting decent Asian demand that cushioned the rate ahead of $1.3300. Continued talk suggesting that a $1.33/1.36 dnt option structure is in play and held by a major Asian sovereign.

However, with ongoing concern toward Greek debt, and yen demand seen as a proxy for speculated yuan appreciation via euro-yen, seen providing the main weight with a break of $1.3300 expected to allow for a quick dip down to $1.3270/65. Some reports suggest demand in place from the overnight low at $1.3314 through to $1.3250 with main stops below. Resistance noted at $1.3350, more from around $1.3370 through to $1.3420 with stops placed on a break of $1.3425, larger ones above $1.3450. Rate currently trades around $1.3330 into early Europe.

RES 4: $1.3800/19 Current top of Bollinger band, High 17 Mar
RES 3: $1.3650 55-day moving average
RES 2: $1.3591 High 1 Apr
RES 1: $1.3520/29 21-day moving average, Channel top 3 Dec

CURRENT LEVEL: $1.3328

SUP 1: $1.3270 Low 25 Mar
SUP 2: $1.3246/50 Low 6 May, 50% projection level
SUP 3: $1.3210 Current base of the daily Bollinger band
SUP 4: $1.3122 61.8% projection level

Yen
Euro-yen sales again provided the early lead into Asian trading, the move down from early posted session highs of Y124.59 taking the rate through the NY base at Y124.49 and on to lows of Y124.19. The euro still seen reeling on the back of Greek debt woes, with sales of euro-yen seen as yen demand seen as a proxy bet for speculated yuan appreciation. Dollar-yen was pulled down to an early low of Y93.17 (NY low Y93.15), the rate again seen meeting decent demand placed ahead of Y93.00 which cushioned.

Yen pairs were provided with a reprieve as Aussie-yen demand was prompted by the release of Aussie jobs data, confirming strong forecasts. A Japanese security house was a noted strong buyer of dollar-yen in the recovery, cited for taking the rate up to highs of Y93.45. Euro-yen has struggled to recover, with offers toward Y124.50 seen providing resistance, with stops below Y124.00 possibly seen as an enticing target. Downside stops in dollar-yen noted on a break of Y92.90 but importers likely to have further demand interest toward Y93.00 ahead with Y93.04 seen as their average rate for year end.

RES 4: Y97.52/79 76.4% retracement, High 7 August
RES 3: Y95.05/09 High 24 Aug 2009, 61.8% retracement of 2009 decline
RES 2: Y94.72/78 76.4% retracement of Aug/Nov decline, High 2 April
RES 1: Y93.50 Tenkan line of the Ichimoku cloud

CURRENT LEVEL: Y93.22

SUP 1: Y92.86 38.2% retracement of 18 Mar advance
SUP 2: Y92.23/27 38.2% of 4 March and 50% of 18 March rallies
SUP 3: Y92.00 21-day moving average
SUP 4: Y91.40/67 200-day moving average, Support line 4 Mar

Cable
Close NY at $1.5248 and was on a downward track into early Asian trade Thursday. Sterling sales gathered pace as early market reacted to a Telegraph piece noting the BIS warning over UK debt. Rate pushed down to a session low of $1.5212 before meeting profit take demand into the dip. Further sales into early Europe has taken rate through $1.5200, extending the corrective pullback to $1.5176, currently trading around $1.5185.

Bid interest noted from around $1.5165, with interest extending to $1.5150, a break to allow for a deeper move toward $1.5130. Hearing in early Europe that stops are seen building in the area between $1.5130/25. Resistance $1.5220, more toward $1.5235. BOE rate decision today though no change expected. Ahead of this event we will see the release of Halifax house price data at 0800GMT and UK IP data at 0830GMT.

RES 4: $1.5420/22 61.8% of Feb/Mar decline, 38.2% of 2010 decline
RES 3: $1.5410 Current top of the daily Bollinger band
RES 2: $1.5382 High 17 Mar
RES 1: $1.5320 High 5 April

CURRENT LEVEL: $1.5225

SUP 1: $1.5125 21-day moving average
SUP 2: $1.4840 Current base of the daily Bollinger band
SUP 3: $1.4783/98 Recovery low 1 March, Low 25 Mar
SUP 4: $1.4619/59 Low 29 Apr, High 23 Feb

MORNING FX
BRIEFING
The dollar was again mixed in Asian trade Weds, lower against the euro and little changed against the yen, although off early highs. Euro-dollar fell to a $1.4680 low in NY last night and extended that to $1.4665 in Asia. Euro-dollar bounced back above $1.4700 as short positions were covered. The pair eventually touched a $1.4735 in late morning trade. Dollar-yen rose to a Y88.70 high after the Cabinet Office released its revised GDP estimates for Q3, backing off soon after it hit the high as yen crosses slid on higher risk aversion, eventually hitting a Y88.29 session low, before bouncing modestly.

Cable was under pressure from the start of Asian trade, gapping down 60 pips to $1.6228 and had noticeable trouble tracking euro-dollar's recovery. Fresh selling into Europe has allowed rate to make a brief show under $1.6200. Sterling in focus ahead of today's Pre Budget Report (1230GMT). Ahead of this we have Germany CPI and trade at 0700GMT, France trade at 0745GMT as well as UK trade at 0930GMT. Light calendar again for the US. Risk aversion plays in thin conditions expected to make for volatile conditions.

EURO
Euro-dollar opened Asia around $1.4705 with the early pre Tokyo market taking advantage of thin markets to target stops below the NY low at $1.4680 taking it to an early low of $1.4665. Asian sovereign demand (book balancing mentioned) provided the main recovery drive, the rate recovering to an initial high of $1.4734. Rate consolidated the recovery by holding above $1.4725/20, eventually extending the topside to $1.4736.

Downside pressure returned just ahead of the European open with strong sell pressure taking the rate through $1.4720, pulling back to $1.4692 (61.8% $1.4665/1.4736). Rate currently trades around $1.4695. A break lower and decent support seen in place again toward $1.4680 ($1.4682 76.45) ahead of the overnight low at $1.4665. Further support/demand seen at $1.4650 ahead of stronger area between $1.4625/20 ($1.4626 Nov 3 lows). Resistance seen toward $1.4720 ahead of the overnight high at $1.4736. Above here and the stronger area between $1.4750/60 moves into view.

RES 4: $1.5163 76.4% of decline from July 2008 high
RES 3: $1.5144 High 25 Nov
RES 2: $1.4945 21-day moving average
RES 1: $1.4850/60 5, 55-day moving average

CURRENT LEVEL: $1.4732

SUP 1: $1.4673 Low 8 Dec
SUP 2: $1.4612/25 23.6% of Apr/Dec & 38.2% Jun/Dec advance, 100-DMA
SUP 3: $1.4595 50% retracement of the advance from August 2009
SUP 4: $1.4510 23.6% of March/Dec 2009 rally

YEN
Dollar-yen closed the US session mid-range in the Y88.40 area, with euro-yen ending around Y130.00. The final Q3 GDP growth estimate Wednesday was heavily revised down to +0.3% q/q from the initial estimate of +0.7% q/q. The large revision was caused by the earlier over-estimation of capital spending by corporates. Traders said there was little reaction to the data release, with the early rally coming at the open and led by a Japanese trust bank.

Highs were notched at Y88.70 before a Japanese car company came in to sell euro-yen ahead of Y130.50, knocking the cross back towards Y130.00 and dollar-yen down to Y88.29. Balance of the Asian session was a muted affair, as dollar-yen held a tight range under Y88.50 and euro-yen faltered ahead of Y130.35. Risk sentiment still seen precariously balanced into the European open after a down day for Asian stocks, with euro-yen extending the lows down to Y129.18 at writing. Dollar-yen also on the backfoot as widespread cross-yen sales drive the rate down to Y87.80 at writing.

RES 4: Y92.32 High 27 Oct
RES 3: Y91.55 Top of Ichimoku cloud, 100-day moving average
RES 2: Y91.31 High 4 Nov, 50% retracement of Aug to Nov decline
RES 1: Y90.50/75 Base of Ichimoku cloud, High 4 Dec

CURRENT LEVEL: Y88.34

SUP 1: Y88.05 Kijun line
SUP 2: Y87.79 50% retracement of 26 Nov rally, Tenkan line
SUP 3: Y87.09 61.8% retracement of 26 Nov rally
SUP 4: Y85.89 Minor low 30 Nov

CABLE
Opened Asia around $1.6284 and came under strong sell pressure in the period between the NY close and the Tokyo open, the market taking advantage of the thin conditions to target and trigger stops through $1.6250. Rate dropped to session lows of $1.6224 before picking up demand interest into the dip. Rate recovered, aided by reported Asian sovereign demand, but failed to make a show back above $1.6280.

Rate consolidated for most of the session between $1.6540/75 before fresh selling into early Europe saw rate trade to an initial low of $1.6199. Rate recovered to $1.6220 but move was short lived as a UK clearer executed a sterling-yen sell order which provided the weight to take rate back below the figure and on to lows of $1.6167. Rate has since recovered back above $1.6200 but underlying tone remains negative with focus turning toward UK trade data at 0930GMT, ahead of more important Pre Budget Report (PBR) at 1230GMT. Support from that traded low at $1.6167 with stronger interest close behind at $1.6155/50. Below here and next support between $1.6130/20. Resistance $1.6220 ahead of $1.6250

RES 4: $1.6878/85 High 16 Nov, Top of the Bollinger band
RES 3: $1.6722/47 High 3 Dec, 25 Nov
RES 2: $1.6575 21-day moving average
RES 1: $1.6405 5-day moving average

CURRENT LEVEL: $1.6263

SUP 1: $1.6227/55 Low 8 Dec, Current base of the daily Bollinger band
SUP 2: $1.6155 61.8% retracement of $1.5708 to $1.6878
SUP 3: $1.5905 200-day moving average
SUP 4: $1.5682/07 38.2% of the 2009 range, Low 13 October
s

MORNING FX
BRIEFING
Return of the Tokyo market (following Monday's holiday) prompted strong selling of yen crosses, at the open and through the Tokyo fix, which in turn added to the corrective pullbacks in euro-dollar, cable and the Aussie. Gold initially eased $7 to $1158, bouncing back to $1166, currently around $1164 and remaining buoyed. Repatriation, profit taking seen as the main driver, with concern toward Greece still bubbling away in the background, as well as reports in the FAZ that WestLB requires further cash injections, seen providing a counter to recent risk on tone, and also adding negative weight on the euro.

FOMC Minutes after the European close to be the day's highlight, though most expect no major surprises from the recent line. Germany GDP and Ifo data, BOE MPC at the TSC, EZ Industrial Orders the morning's highlights, with US GDP the early afternoon focus. Sterling outpaced the euro-dollar pullback in Asia with traders suggesting that the MPC could affirm the need for a weak pound for economic rebalancing which could again weigh back on the pound.

EURO
Euro-dollar opened Asia around $1.4960 with initial demand lifting the rate up to session highs of $1.4972 ahead of the Tokyo open. The return of Tokyo markets, following Monday's holiday, saw the centre active sellers of yen crosses into the open and through the Tokyo fix. The weight of selling took the rate through the NY base at $1.4957, with triggered stops on the break of $1.4950 providing the weight to take it on to an initial low of $1.4937. Recovery attempts were capped by sell interest between $1.4955/60 before rate pushed down to mark extended session lows at $1.4928.

Further sell interest into early Europe takes rate down to $1.4911 at writing. Support seen placed toward $1.4900, a break here to allow for a deeper move toward $1,4875/70 ahead of $1.4850/40. Resistance now seen toward $1.4930/35, a break here to open a move back toward $1.4965/75 ahead of $1.5000.

YEN
After edging up to highs at Y89.20 in the NY session, dollar-yen eased back to close around Y89.00, as euro-yen slipped back to Y133.10, failing to break through the Cloud top at Y133.88. Return of the Tokyo market Tuesday following yesterday's holiday found yen crosses under pressure from the open, further selling coming through at the fix, taking euro-yen back under Y132.80 and dollar-yen to Y88.80. Both pairs consolidated into the afternoon session, before another round of selling as the Nikkei ended at a fresh four-month low. Euro-yen dropped to Y132.45 as dollar-yen moved to Y88.73, with early European dealing seeing lows extended further.

Models and real-money accounts said to be the yen buyers, while semi-official demand is rumoured to come in around Y88.60/50 this morning, importers and investors also looking to buy the dip. Stops noted under Y88.50 and Y88.10, ahead of barrier interest at Y88.00. 200-day moving average back under pressure at Y132.29, a close below still eyed for the first time since May 2009. Trendline support from the October lows also seen cushioning at Y131.93.


CABLE
Opened in Asia around $1.6610 and initially edged up to mark session highs at $1.6620, as early market moved into risk after the positive close on Wall Street. A returning Tokyo market were strong sellers of yen crosses, the weight of which weighed back on cable to take the rate down to an initial low of $1.6560. Rate recovered to $1.6587 before turning lower again, extending the overnight base to $1.6550. Recovery to $1.6575 proved short lived as early Europe added weight. Rate broke below $1.6550, extending lows to $1.6519, with rate currently trading around $1.6524. Support seen placed toward $1.6500 ($1.6505 76.4% $1.6460/1.6649), a break here to open a deeper move toward $1.6460/50. BOE King at the TSC today with some expectation that he will again refer to a weak pound supporting UK growth. Resistance seen at $1.6550, more at $1.6570/80.

OPTIONS AND MORE
FX Option expiries for today's 1500GMT cut

* Euro-dollar; $1.4900, $1.4980, $1.5000, $1.5050
* Dollar-yen; Y88.00, Y88.50(lge), Y89.50, Y90.00
* Cable; $1.6790
* Euro-Swiss; Chf1.5150
* Aussie; $0.9300
* Dollar-Canada; C$1.0750

EUROPEAN STOCKS: European equity bourses are seen opening lower Tuesday, with spreadbetters calling the FTSE-100 down 33pts, CAC-40 down 32pts and Xetra-DAX down 45pts. The banking sector is in focus this morning after news Lloyds Banking Group (LLOY) will be undergoing a Stg13.5bln rights issue as part of its Stg22.5bln capital raising efforts, with new shares offered at 36p. The firm also managed to raise Stg8.5bln in new debt yesterday, most of which can be converted to equity if the banks finances come under pressure. On the macro front, German IFO at 0900GMT, EMU Industrial Orders at 1000GMT, US GDP data at 1330GMT and the Case-Shiller data at 1400GMT, will all be watched for direction today.

DAILY CALENDAR
The European day starts a full calendar session at 0700GMT, with the release of German detailed Q3 data, followed by French housing starts/permits and French November manufacturing sentiment at 0745GMT.

French data continues at 0750GMT, with the release of French October consumer spending. At 0800GMT, Spain Oct PPI data is released.

At 0900GMT, Germany Nov IFO business sentiment is released, the main focus for European players in the morning session

In the UK, at 0930GMT, Q3 preliminary business investment data is released, along with the October BBA Loans For House Purchase data.

At 0945GMT, Bank of England Gov. Mervyn King is at the House of Commons Treasury Committee, giving evidence on the November inflation reports. BOE MPC Members Paul Tucker, Paul Fisher, Adam Posen and Andrew Sentance also to attend.

Additionally, BOE Gov. King and MPC Member Andrew Sentance issue their Annual Report.

At the same time, German Chancellor Angela Merkel gives a speech at the BDA conference, in Berlin. AT 1000GMT, EMU Sep industrial new orders data is released, followed at 1230GMT by German Economics Minister Rainer Bruederle speaking in Berlin

A full US calendar gets underway at 1245GMT, when the 21-Nov week ICSC-Goldman Store Sales data is released.

At 1330GMT, US third quarter revised GDP, Chain Price Index data are released. Third quarter GDP is expected to be revised down to a 2.8% pace in the second estimate. The key factors are expected to be a wider trade gap and more inventory drawdown, as well as slower PCE growth than previously expected. The chain-price index is expected to be unrevised at +0.8%.

Back in Europe, at 1400GMT, the BNB Nov business sentiment is released.

Further evidence of the state of the US housing market is released at 1400GMT, when the Sept 09 S&P/Case-Shiller Home Price Index and at 1500GMT, when the Sept FHFA Home Price Index is out.

Further data is released at 1500GMT, with the November Consumer Confidence data and the Richmond Fed Manufacturing Index. Consumer confidence is expected to fall to a reading of 47.0 in November after backing up to a 47.7 reading in October.

Also at 1500GMT, FDIC Chair Sheila Bair holds a press briefing on the Q3 bank and thrift earnings in Washington.

Back in the UK, at 1535GMT, BOE Gov. King gives further testimony to Parliament, this time to the House Of Lords Economic Affairs

At 1730GMT, SNB President Jean-Pierre Roth holds speech at the International Center for Monetary and Banking Studies, in Geneva

Big release for the bond markets at 1900GMT in the US, when the latest FOMC Meeting Minutes are released. Last releases data is at 2200GMT, when the 22 Nov week ABC News Survey of confidence is released.

NordMarkets Morning FX - October 5

MORNING FX
BRIEFING
The G7 failed to mention dollar weakness in its statement following the weekend meeting in Istanbul. Traders said dollar-yen and the crosses initially traded lower in Asia after Japanese Finmin Fujii comments, (if currencies show some excessive moves in a biased direction, we will take action). Dollar-yen was off 60-points to Y89.23 as euro-yen dropped back to Y130.50 before a strong bounce back as Tokyo names bought most pairs over the Tokyo fix. The market was caught short with liquidity reduced thanks to China and Australia holidays, with euro-yen putting on 100-points to Y131.65 as dollar-yen climbed back to Y89.90, while sterling-yen rallied 150-points to Y144.00. Yen moves dictated euro-dollar and cable direction, as these pairs climbed off $1.4582 and $1.5921 lows, euro moving back to $1.4648 as cable regained the $1.60 handle. Aussie was well bid after more hawkish domestic press articles ahead of tomorrow's RBA decision, moving up 100-points to $0.8740, with traders noting there is now a 50% chance of a 25bps hike priced in.

EURO
A volatile NY session Friday saw euro-dollar initially drop to $1.4480 in a knee-jerk reaction to the disappointing US employment data, before a strong bounce allowed the pair to close back on a $1.46 handle. Ireland's resounding "Yes" vote for the Lisbon Treaty over the weekend was seen as mildly euro supportive, though main flows into Asia were driven by moves in the crosses, as euro-yen initially came lower. Euro-dollar eased to early session lows at $1.4582 before a strong bounce in the cross pulled the pair back on to the $1.46 handle, momentum strong enough to move the rate back to $1.4648. Gains were capped ahead of Friday's $1.4650 NY high with the rate then consolidating above $1.4625 over the balance of the Asian day. Reserve interests are said to have been cushioning euro-dollar dips over recent sessions, while offers are seen into $1.4650, more around $1.4670 with stops above.

Turning to the technical picture, the euro is attempting to break out of a falling range from the 23 Sep highs with resistance strengthened by the 21-DMA at $1.4630 and 50% level at $1.4663. The daily stochastic study is still pointing lower and still well above oversold, while the 5 & 21-DMAs have now made a bear-cross. Initial support is the 5-DMA at $1.4595.

RES 4: $1.4845/62 Sep high, 100% proj of Q4 2008 rally, High 22 Sep 2008
RES 3: $1.4802 High 24 Sept
RES 2: $1.4663 50% retracement of the decline from $1.4845
RES 1: $1.4630 21-day moving average

CURRENT LEVEL: $1.4630

SUP 1: $1.4595 5-day moving average
SUP 2: $1.4445/47 50.0% of $1.4046 to $1.4845, High 5 Aug
SUP 3: $1.4380/97 55-DMA/ High 27 Aug
SUP 4: $1.4351 61.8% retracement of $1.4046 to $1.4845

YEN
Dollar-yen recovered initially NY losses Friday to close back around Y89.70, with euro-yen also bouncing to end the week around Y131.00. Finmin Fujii comments were again the focus into the Asian session following the G7 meeting, as he said "if currencies show some excessive moves in a biased direction, we will take action". Traders said dollar-yen and the crosses initially traded lower to Y89.23 and Y130.50 before the market seemingly took the Fujii comments as a veiled intervention threat, Tokyo names said to have been big buyers over the fix. Dollar-yen recovered back to trade just shy of Y90.00 as euro-yen traded up 100-points to Y131.65 and sterling-yen moved back to Y144.00. Dollar-yen easing back to trade around Y89.75 into the European session, traders now reporting stops on a break of Y90.00, more in the Y90.20/30 area. Note however exporter offers layered on a Y90 handle, ahead of larger stops on a break above Y91.00.

Dollar-yen's recovery remains below the Tenkan line of the Ichimoku cloud and 5-DMA at Y89.85 and Y90.20 with daily studies not at all convincing of a stronger recovery. Key topside level is at Y91.75, which was the major low seen in July and Fibonacci levels are Y91.94, Y93.05. Meanwhile, the cross remains below the Ichimoku cloud base as daily studies remain weak and bears look for a test of the 200-day moving average at Y129.60.

RES 4: Y92.53 Failure high 21 Sept
RES 3: Y91.75/94 Major low July, 38.2% retracement of Aug/Sep decline
RES 2: Y90.90/20 21-DMA, Kijun line of Ichimoku cloud
RES 1: Y90.20 Tenkan line of Ichimoku cloud

CURRENT LEVEL: Y89.79

SUP 1: Y88.23 Low 25 Sep
SUP 2: Y87.12 Major lows Dec/Jan
SUP 3: Y86.05 Monthly high June 1995
SUP 4: Y84.50 Monthly low July 1995

CABLE
Cable recovered from the $1.5805 NY low to close back above $1.5900 Friday, while, euro-sterling ended around stg0.9140. Flows into the Asian session were largely driven by sterling-yen as the cross initially sold off before a strong bounce back towards Y144.00. Cable bounced off the $1.5921 low to regain the $1.60 handle, moving to $1.6007 in Asia, while euro-sterling traded between stg0.9146/71. Cable initially moved above $1.6020 into the European session before slipping back to trade around $1.5975 at writing, with euro-sterling sitting towards the top-end of the day's range. Cable offers reported around the $1.6125 area with some stops above, while expiry interest is highlighted at $1.6135 for the NY cut. Key resistance area seen as last week's highs in the $1.6130 zone.

Cable sees the daily stochastic remain soft, although both it and momentum are attempting to turn off lows. While $1.5770 remains the low, the main Fibonacci retracements are $1.6141, $1.6255, $1.6369 and $1.6406 with more minor Fibonacci levels at $1.6119, $1.6201 and $1.6303. In euro-sterling, daily studies are now pointing back lower raising bear's hopes of a pullback towards further Fibonacci retracements of the Aug/Sep advance from stg0.8980. stg0.9191/98 offers initial resistance, being 50% of the stg0.9304 decline and Friday's high.

RES 4: $1.6467 High 23 Sep
RES 3: $1.6330/40 Low 23 Sept, 100-day moving average
RES 2: $1.6260 21-day moving average
RES 1: $1.6127/34 Spike high 30 Sep, Low 21 Sept

CURRENT LEVEL: $1.5997

SUP 1: $1.5803 Low 8 June, 1 Oct
SUP 2: $1.5770 Low 28 Sept
SUP 3: $1.5721 High Dec 2008 & 50.0% of $1.44 advance
SUP 4: $1.5688 38.2% of $1.3500 to $1.7041

INDICATORS
FX: Option expiries for today's 1400GMT cut
* Euro-dollar; $1.4650
* Dollar-yen; Y88.95, Y90.00, Y91.00
* Dollar-Canada; C$1.0700, C$1.0900
* Aussie; $0.8750
* Cable; $1.6135

European government bond supply drops dramatically this week and is due from Austria, Germany and Slovakia, totalling E4.3bln vs E30.255bln last week. Slovakia is due on Monday for no more than E127mln. Austria taps E2.2bln on Tuesday and Germany up to E2.0bln on Wednesday. Supply is countered by reinvestment flows from Germany, with redemption for E18bln and coupon payments for E1.7bln -- to turn net cash flows positive to the tune of E15.4bln vs -E14.05bln last week.

Elsewhere, seculative accounts increased their net euro long positions and modestly pared back their net yen long positions as implied by the September 29 data released Friday by the U.S. CFTC. The net position in non-commercial futures (ex-options) showed that speculators increased their net euro long to +39,766 contracts from last week's net long of +38,000 contracts. In the yen, speculative accounts had a net yen long of +44,856 contracts versus last week's net yen long of +45,615 contracts, which was the largest since February 3.

DAILY CALENDAR
Monday morning in Europe sees the final releases of services PMIs from France (0743GMT), Germany (0753GMT), leading up to the EMU release at 0758GMT.

UK data at 0830GMT also sees the CIPS Services PMI data as well as Official Reserves.

Further European data sees EMU August retail trade at 0900GMT, which is expected to come in at -0.4% m/m, -2.2% y/y.

At 0945GMT, ECB Executive Board member Lorenzo Bini Smaghi participates in a Euro50 Group seminar in Istanbul, while at 1100GMT, Bundesbank Board member Thilo Sarrazin delivers a speech on the results of the German election.

US data starts at 1330GMT with the weekly MNI Capital Goods Index, which is followed at 1400GMT by the Employment Trends Index and the non-manufacturing ISM Index as well as at 1430GMT by the weekly MNI Retail Trade Index.

The ISM's non-manufacturing index is expected to rise to a reading of 50.0 in September after rising to 48.4 in August.

Meanwhile, back in Europe at 1415GMT, ECB Executive Board member Gertrude Tumpel-Gugerell is due to give a keynote speech at Bad Ischler Dialog organised by sterreichische Sozialpartner, in Bad Ischl, Austria.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - September 30

MORNING FX
BRIEFING
The Aussie was the big mover in Asian trade as stronger-than-expected Australian retail sales data cemented expectations of an RBA rate hike before year-end. Traders said there was already a natural bid tone as month-end real-money hedging went through, with the data release then giving the rate another 60-point kick higher to a fresh 2009 high at $0.8805. Elsewhere, talk of sizeable half-year-end fixing demand of foreign currencies proved to be inaccurate as dollar-yen was sold heavily into the fix after hitting early highs at Y90.42. Euro-yen had traded up to Y132.04 before giving back over 100-points to trade on a Y130 handle into early Europe, as dollar-yen comes back to Y89.55. Euro-dollar meanwhile regained a foothold above $1.4600 on the back of the Aussie move, rallying to $1.4633 in Asia, with early Europe taking the rate to $1.4640. Sterling continued its recovery in the wake of Tuesday's strong UK CBI retail sales data and talk that the BoE would not be lowering the reserve rate any time soon. Cable moved to $1.6035 in Asia and has extended the bounce to $1.6049 in recent trade.

EURO
Euro-dollar closed the US session around $1.4585, Asian trade then seeing a bid tone emerge as Aussie rallied strongly on better retail sales data. Traders reported stops being hit on the break back above $1.4600, with little in the way of supply to counter the move. Gains extended to $1.4633, with euro-dollar remaining buoyed on a $1.46 handle through the balance of the Asian day. Early European dealing then provided the added push for a move to $1.4644, the rate currently trading back around $1.4625. Techs are noting the rate failed to close below the 21-day moving average last night, today seen as pivotal at $1.4580. Bids said to be forming on the downside at $1.4530, said to be semi-official in nature. Topside orderboards said to be pretty mixed with no clear bias. Attention today now centred around the ECB one-year liquidity tender, due to close at 0900GMT.

YEN
Dollar-yen closed a quiet US afternoon session around Y90.10, while euro-yen ended firm around Y131.43. Talk of strong demand for foreign currencies versus the yen at the half year-end fix circulated into the Asian session, pushing dollar-yen up to Y90.42 before offers began to stack up from exporters. Euro-yen followed a similar path, trading up to Y132.04 before fixing sales knocked the yen pairs back. Traders noted a Japanese agricultural bank as a decent seller, local real-money accounts also active as dollar-yen slipped back below Y90.00. Heavier tone prevailed into the Tokyo afternoon as dollar-yen retreated to Y89.63, early Europe then knocking the pair lower still to Y89.55 as euro-yen gave back over 100-points from the overnight highs to lows under Y131.00. Bids noted into Y89.50 with some stop interest below. On the topside, talk now of large stops from CTA and model accounts on a break of Y90.50/55. Euro-yen demand comes in around Y130.70, key support still seen as the 200-day moving average at Y129.60.

EURUSD - TECHNICALS
Turning to the technical picture, the euro is still looking corrective with a weak daily stochastic study and a negative break for momentum. Near-term the 21-day moving average is lending support at $1.4580 with initial resistance at the 5-DMA at $1.4645. Outside of there, support/resistance is $1.4526/$1.4802.

RES 4: $1.4908 High Aug 22 2008, Daily Bollinger band top
RES 3: $1.4851/62 100% projection of the Q4 2008 rally, High 22 Sep 2008
RES 2: $1.4802 High 24 Sept
RES 1: $1.4645 5-day moving average

CURRENT LEVEL: $1.4633

SUP 1: $1.4580 21-DMA, Low 28 Sept
SUP 2: $1.4526 Low 29 Sep
SUP 3: $1.4447 High 5 Aug
SUP 4: $1.4330 Low 8 Sept

GBPUSD - TECHNICALS
Cable has recovered into the Bollinger band and also overtaken the 5-DMA, which turn support at $1.5940 and $1.5820. The daily stochastic remains soft, although both it and momentum are attempting to turn off lows. There is a congestion level at $1.6085 ahead of former Sep lows at$1.6115/34. While $1.5770 remains the low, the main Fibonacci retracements are $1.6141/1.6255, $1.6369 and $1.6406 with more minor Fibonacci levels at $1.6119, $1.6201 and $1.6303.

RES 4: $1.6467 High 23 Sep
RES 3: $1.6320/30 21, 100-day moving average, Low 23 Sept
RES 2: $1.6115/34 Lows 1, 21 Sept
RES 1: $1.6085 Hourly congestion level

CURRENT LEVEL: $1.6048

SUP 1: $1.5940 5-day moving average
SUP 2: $1.5803/20 Low 8 June, Base of the daily Bollinger band
SUP 3: $1.5721/70 High Dec 2008 & 50.0% of $1.44 advance, Low 28 Sept
SUP 4: $1.5688 38.2% of $1.3500 to $1.7041

USDJPY - TECHNICALS
Dollar-yen recovery is still only testing the Tenkan line of the Ichimoku cloud at the moment with daily studies not at all convincing of a stronger recovery. Initial support is the daily Bollinger band base at Y89.00 but this level is not as strong for the yen crosses as elsewhere. Key topside level is at Y91.75 level, which was the major low seen in July and Fibonacci levels are Y91.94, Y93.05.

RES 4: Y92.53 Failure high 21 Sept
RES 3: Y91.75/94 Major low July, 38.2% retracement of Aug/Sep decline
RES 2: Y91.30/50 21-DMA, Kijun line of Ichimoku cloud,
RES 1: Y90.45 Tenkan line of Ichimoku cloud

CURRENT LEVEL: Y89.80

SUP 1: Y88.23 Low 25 Sep
SUP 2: Y87.12 Major lows Dec/Jan
SUP 3: Y86.05 Monthly high June 1995
SUP 4: Y84.50 Monthly low July 1995

DAILY CALENDAR
A busy calendar starts at 0600GMT with he release of the IMF Global Financial Stability Report and also the German August ILO employment change.

The first of many speakers comes at 0645GMT, when ECB Vice-President Lucas Papademos, ECB Governing Council member Axel Weber and Riksbank Gov. Stefan Ingves participate in a discussion on implementation of de Larosiere regulation and supervision package at The Eurofi Financial Forum, in Goteborg.

European data continues with France PPI at 0645GMT, shortly followed at 0650GMT by the release of Q2 Maastricht debt data.

The main German September unemployment rate is expected to edge up to 8.4% at 0755GMT with Germany also seeing VDMA machine-tool orders at 0800GMT.

At 0830GMT, ECB Governing Council member Christian Noyer participates in a discussion on prudential and governance rules to ensure effective financial stability? at The Eurofi Financial Forum, in Goteborg The BOE's Miles speaks in Belfast at 0900GMT, at the same time as the SNB publishes the latest Quarterly Bulletin.

EMU Sep flash HICP data is due at 0900GMT and is expected to come in at -0.2% y/y.

US data starts at 1100GMT with the weekly MBA Mortgage Application Index.

At 1200GMT, Riksbank Deputy Gov. Lars Nyberg participates in a discussion on "Crisis management of cross-border institutions: how to leverage best practices?" at the event in Goteborg, while also in Scandinavia today, although the time is uncertain, Norges Bank Governor Svein Gjedrem is due to deliver a speech at a seminar by the Center for Monetary Economics in Oslo.

US data continues with the 1215GMT release of the ADP National Employment Report, which is followed at 1230GMT by the third release of Q2 GDP and the Chain Price Index.

Second quarter GDP is expected to be revised to -1.2% in third reading for the quarter. The chain price index is expected to be revised to remain flat.

NY NAPM data is due at 1300GMT, while at 1345GMT, the Chicago PMI is expected to increase to a reading of 52.0 in September. Other regional data already released have suggested continued expansion, though still at a slow pace.

Further data sees the weekly EIA Crude Oil Stocks at 1430GMT. Central bank speakers then continue through the afternoon and evening.

At 1430GMT, Atlanta Fed President Dennis Lockhart delivers a speech on the US economic outlook on the University of South Alabama in Mobile.

At 1630GMT, ECB President Jean-Claude Trichet gives the keynote address during the event in Gotegorg.

At 1635GMT, Fed Vice Chairman Donald Kohn appears on a panel at the Cato Institute's Shadow Open Market Committee meeting on central bank exit policies.

Finally, at 1830GMT, Fed Governor Daniel Tarullo testifies to the Senate Banking Subcommittee on Security and International Trade and Commerce on international regulatory cooperation.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - September 24

MORNING FX

BRIEFING
The FOMC left rates unchanged, as widely expected, keeping policy accommodative with a mild upgrade to its economic assessment. One bank notes that the FOMC made a slight change by saying they will purchase "a total" of $1.25tln agency-MBS. In previous statements officials said they would buy "up to" $1.25tln in agency-MBS. Reversal off post FOMC high of $1.4845 saw rate ease to lows of $1.4728 into the close with early Asia continuing the demand for dollars, as system and macro accounts stopped themselves out. Euro-dollar eased to $1.4685, as dollar-yen pushed up to highs of Y91.63, with cable, Aussie and Kiwi tracking the early euro-dollar move. Move was short lived as Asian sovereign dollar supply emerged to take euro-dollar up to $1.4754. Rally met model supply that countered, then reversed the move as euro-yen came under pressure from Japanese investment house sales, with model supply also noted as market moved to risk aversion as Asian regional equity markets turned negative. Nikkei was positive but seen catching up after the three day gap. Ifo and G20 today's focus.

EURO
Euro-dollar rallied to $1.4845 post FOMC only to meet strong Asian sovereign supply, with the reversal back to $1.4728 seen as US stock markets turned from positive to negative. System and macro supply continued into early, pre-Tokyo, trade with sales taking rate on to extended lows of $1.4685. Rate reversed off lows, with Asian sovereign demand providing a lift to $1.4740 ahead of a short squeeze on to $1.4754 before model funds began to provide stronger supply, the rate easing to $1.4710 before edging back to $1.4730 into early European dealing. Offers seen placed between $1.4737/43 (61.8%/76.4% $1.4754/1.4710) a break above to allow for a move back to $1.4754. Offers noted to $1.4760 with stops above, which if triggered to take rate on to $1.4780/85 ahead of $1.4800/10. Demand noted back at $1.4710/00 (61.8%/76.4% $1.4685/1.4754). Asian traders report that an Asian sovereign was a noted buyer of euro-dollar, Aussie and sterling off lows, book balancing with Bank a noted buyer of dollars Wednesday. Other Asian sovereigns also noted showing demand interest into Europe.

YEN
Dollar-yen closed the US session mid-range around Y91.32 after notching highs at Y91.55 in the wake of the FOMC announcement, while euro-yen ended around Y134.55. Early Asian dealing saw the highs extended to Y91.63 in dollar-yen before an about-turn as a Japanese investment house stepped in to sell at and after the Tokyo fix. Euro-yen had also hit early highs at Y134.69 before a major US name sold the cross down, stops triggered through Y134.00 over the Tokyo lunch break, with the rate slipping to session lows at Y133.58 and struggling to bounce through the Asian afternoon. Dollar-yen meanwhile found a base at Y90.77 and remains heavy into European dealing. Japanese demand still said to reside around Y90.50, with significant barrier protection still rumoured into Y90.00. Exporter offers are back around Y91.80. Euro-yen trading back within the Ichimoku Cloud, the base of which is seen as key support now at Y132.86.

EURUSD - TECHNICALS
The euro has almost reached its 100% projection of the Q4 2008 rally and Sept 2008 peak at $1.4851/62, and now favours correction back to $1.4613/38, which is the 21-day moving average and the former resistance from June 3. The daily studies are already beginning to turn lower, with stochastics now bearishly crossed.

RES 4: $1.4982 2.0% moving average envelope
RES 3: $1.4968 Major high Nov 2007
RES 2: $1.4906/08 Daily Bollinger band top, High Aug 22 2008
RES 1: $1.4851/62 100% projection of the Q4 2008 rally, High 22 Sep

SUP 1: $1.4747 5-day moving average
SUP 2: $1.4611 Low 21 Sep
SUP 3: $1.4517/33 Low 14 Sept, Former resistance line from 3 June
SUP 4: $1.4500 21-day moving average

USDYEN - TECHNICALS
Dollar-yen is still unable to close above the Y91.75 level, which was the major low seen in July and failure to close above here is seen leaving focus on the downside to a projected 6-month channel base, which is now valued at Y89.52. Initial support is at Y90.12/21.

RES 4: Y94.74 200-day moving average
RES 3: Y93.96 50% retracement of Aug/Sep decline
RES 2: Y93.06 38.2% retracement of Aug/Sep decline
RES 1: Y92.27/55 21-day moving average, 76.4% of Y93.29-Y90.15

SUP 1: Y90.71 76.4% of Y90.15 to Y92.53
SUP 2: Y90.12/21 Lows Sept 11, 14, 16
SUP 3: Y89.60/67 Proj channel base, 50% proj of the Aug/Dec downmove
SUP 4: Y87.12 Major lows Dec/Jan


GBPUSD - TECHNICALS
Cable is holding above the 5-day moving average at $1.6310 and whilst this underpins, the risk remains on short-covering as the hourly studies continue to point higher from oversold territory. Whilst the "gravestone" doji yesterday candlestick yesterday is a worry, the hammer reversal candlestick Mon and strong white candlestick Tues is bullish.

RES 4: $1.6740 High 11 Sep
RES 3: $1.6665 Resistance line from July 2008 high
RES 2: $1.6437/54 50.0% of $1.6740 to $1.6134, High 18 Sept
RES 1: $1.6387 21-day moving average

SUP 1: $1.6264 High 21 Sept
SUP 2: $1.6100/15 Base of the dly Bollinger band, Dbl-low from early Sep
SUP 3: $1.6033 Low 13 July
SUP 4: $1.5986 Low 8 July

DAILY CALENDAR
It is a light data day in Europe Thursday, although there are speakers slated on the Continent and in the UK.

At 0700GMT, Bundesbank Vice-President Franz-Christoph Zeitler speaks on how banking regulation should change, in Frankfurt

The only data of note is the 0800GMT release of the Germany September IFO business sentiment index.

At 0830GMT, German Chancellor Angela Merkel and Finance Minister Peer Steinbrueck hold press conference ahead of the G20 summit, in Berlin. The summit starts in Pittsburgh USA later today.

The US has a full calendar of data and speakers to sit alongside the opening of the G20 summit.

At 1230GMT, the Jobless Claims data for the Sep 19 week is due. Claims are expected to rise 5,000 to 550,000 in the September 19 week.

At 1330GMT, US Treasury Assistant Secretary for Financial Stability Herbert Allison testifies before Senate Banking Committee on the Emergency Economic Stabilization Act in Washington.

At 1400GMT, Existing home sales data is released. Sales are expected to rise to a 5.35 million annual rate in August after jumping 7.2% in July. Homes sales remain very weak relative to a year ago, but a clear upward trend appears to be emerging.

Back to data at 1430GMT, with the release of EIA Natural Gas Stocks. Also at 1430GMT, Chicago Federal Reserve Bank President Charles Evans speaks on asset price exuberance and macroprudential regulation at the opening of the bank's International Banking Conference in Chicago.

At 1500GMT, Kansas City Fed Production data for September is released.

Back in Europe, at 1600GMT, France August newly registered jobseekers data is out.

Back to the speakers, and at 1700GMT, Christina Romer, chair of the White House Council of Economic Advisers, delivers keynote the address to the Chicago Fed's International Banking Conference in Chicago.

Also at 1700GMT, Bundesbank President Axel Weber is slated to speak on "The Future of Banking Regulation" in Frankfurt, while ECB Executive Board member Juergen Stark gives a speech on "The Language of Money", in Berlin

The day closes out at 2030GMT, when US 14-Sep Money Supply (M2) is released. However, there is likely to be a drip-feed of unscheduled comments from G20 delegates throughout the day.



Best Regards,

NordMarkets.com

NordMarkets Morning FX

MORNING FX

BRIEFING
A quiet Asian session to start the week with Japan closed Monday through Wednesday and several other centres closed for religious holidays. The only action of note was in sterling where the pound came under further pressure in early trade, stops below $1.6220 triggered to take it to $1.6212 before able to make a recovery to $1.6265 on reaction to stronger than expected Rightmove housing data. Release of BOE Quarterly Bulletin reversed the recovery attempt with rate falling under $1.6200 to $1.6185. Euro was buoyed by demand for euro-sterling, euro-dollar trade contained within a range of $1.4665/1.4713 though under pressure into early Europe on generally firmer dollar. Yen traded with a slight softer tone as equity markets eased, dollar-yen triggering stops above Y91.60 to take rate on to Y92.01. Very light data calendar for today, with main focus for the week on the FOMC statement Tuesday and G20 FinMin meeting Thursday/Friday. BOE Minutes from the Sep meeting are published Wednesday. Speeches from SNB Hildebrand and Jordan are set for Friday.

EURO
Euro-dollar opened Asia around $1.4685 and edged to session highs of $1.4713 in relatively subdued trade due to the holiday in Japan (closed through to Wednesday). Pressure on sterling provided the euro with some buoyancy, via demand for euro-sterling, but general dollar buys eventually weighed against further gains and saw rate pullback to $1.4680. Demand for euro-yen provided a lift back to $1.4706 but again rate met decent headwind selling above $1.4700 that saw rate drift lower through the balance of the session to $1.4665 into early Europe. Further sales have taken the rate to extended lows of $1.4655, but seen meeting decent demand interest in the area ahead of $1.4650, with talk emerging of stops below. Decent technical support noted down to $1.4640 expected to provide a cushion below, a break here to allow for a deeper move toward $1.4625/20 ahead of $1.4600. Offers seen placed between $1.4680/85 ahead of $1.4695/05, stronger toward $1.4720.

Elsewhere, speculative accounts increased their net euro long positions and pared their net yen long positions as per September 15, according to CFTC data released Friday. The net position in non-commercial futures (ex-options) showed that speculators increased their net euro long to +37,772 contracts from last week's net long of +18,033 contracts, the CFTC said. In the yen, as per Sept 15, speculative accounts had a net yen long of +37,107 contracts versus last week's net yen long of +40,799 contracts, which was the largest net long since February. Y Spec accounts have had a net euro long position since May 5 and maintained a net yen long since July 7. The euro closed at $1.4659 Sept 15, versus the levels seen late Friday near $1.4700. Dollar-yen closed at Y91.03 Sept 15 vs. Friday's closing levels near Y91.45.

YEN
Dollar-yen closed the week in NY around Y91.28, with euro-yen ending back around opening Asian levels at Y134.25. Traders reported a quiet Asian session Monday with Tokyo out until Wednesday, dollar-yen moving up from the Y91.30 area, while the cross found a base at Y134.20. Subsequent bounce was sufficient to push dollar-yen through Friday's Y91.55 high, though gains were initially capped ahead of Y91.60 as euro-yen topped out in the Y134.60 area. Majority of the Asian session was then subdued within the early ranges before a late spike in both pairs saw dollar-yen making a show above Y92.00 after stops were hit through Y91.65/80, as the cross moved towards Y135.00, so far stalling at Y134.97. Traders noting reports of stops now from various names on a break of Y135.10, system accounts in particular said to have left orders in that area. Techs meanwhile note the move back above the Ichimoku Cloud at Y134.84, a close above there today required for fresh upside momentum. Offers in dollar-yen are noted in the Y92.20/25 area, ahead of tech resistance at Y92.44 (21-day moving average).

EURUSD - TECHNICALS
Turning to the technical picture, initial resistance is still seen at $1.4768 as euro-dollar trades within the $1.4830 Bollinger band. Daily studies remain firm but are now well in overbought territory, highlighting the risks of a pullback.

RES 4: $1.4908 High Aug 22 2008
RES 3: $1.4851/62 100% projection of the Q4 2008 rally, High 22 Sep
RES 2: $1.4830 Current top of the daily Bollinger band
RES 1: $1.4768 High 17 Sep

CURRENT LEVEL: $1.4687

SUP 1: $1.4648 Low 18 Sep
SUP 2: $1.4517/30 Low 14 Sept, Former resistance line from 3 June
SUP 3: $1.4447 August high
SUP 4: $1.4440 21-day moving average


USDYEN - TECHNICALS
Dollar-yen is trying to break back above the major low seen in July at Y91.75, helped by an upturn in momentum and the daily Stochastic study. Initial support is the 5-DMA at Y91.30. Euro-yen is focused on breaking above Ichimoku cloud top at Y135. Daily studies are mixed with the stochastic clearly bullish but momentum struggling to make ground.

RES 4: Y93.96 50% retracement of Aug/Sep decline
RES 3: Y93.06 38.2% retracement of Aug/Sep decline
RES 2: Y92.40/80 21-day moving average, Kijun line
RES 1: Y91.75 Major low July

CURRENT LEVEL: Y91.72

SUP 1: Y91.30/50 5-DMA & Tenkan line
SUP 2: Y90.12/21 Lows Sept 11, 14, 16
SUP 3: Y89.62/67 Proj channel base, 50% proj of the Aug/Dec downmove
SUP 4: Y87.12 Major lows Dec/Jan


GBPUSD - TECHNICALS
Cable's recent head-&-shoulders break target has been filled, although studies remain weak keeping bears focused on channel base at $1.6182 and the $1.6115 double-low. Initial resistance is the 5-day moving average at $1.6380.

RES 4: $1.6822 76.4% of August pullback
RES 3: $1.6740 High 11 Sep
RES 2: $1.6672 Resistance line from July 2008 high
RES 1: $1.6380 5-day moving average

CURRENT LEVEL: $1.6222

SUP 1: $1.6210 Hourly low
SUP 2: $1.6182 Channel base from June 8
SUP 3: $1.6115 Double-low from early Sep
SUP 4: $1.6080 Base of the daily Bollinger band


DAILY CALENDAR
European events for Monday start at 0700GMT, when ECB Executive Board member Gertrude Tumpel-Gugerell is due to give the opening address at a conference on "Business Models in Banking: Is There A Best Practice?", in Milan.

0800GMT sees the Bundesbank publish it's latest Monthly Bulletin, while at 0900GMT, the ECB releases a survey on "Access to finance of small- and medium sized enterprises"

There is no major UK data remaining for Monday, but at 1005GMT, the Bank of England's Sentance speaks in London.

At 1100GMT, German Finance Minister Peer Steinbrueck, Chancellor Angela Merkel and former ECB chief economist Ottmar Issing are due to hold a press conference on financial market regulation proposals, in Berlin.

At 1215GMT, Riksbank Deputy Governor Lars Svensson is due to give a speech "Flexible inflation targeting and the crisis", at an event in Amsterdam.

US data starts at 1330GMT with the MNI Capital Goods Index, followed at 1400GMT by the leading indicators index, which is expected to rise 0.7% in August on positive contributions from slower vendor performance, rising stock prices, in increase in building permits, and rising consumer expectations. These were offset by negative contributions from the falling money supply and rising jobless claims.

At 1430GMT, the IMF releases analytic chapters of the annual Global Financial Stability Report, at the same time as the release of the weekly MNI Retail Trade Index.

At 1630GMT, ECB Governing Council member Ewald Nowotny participates in a panel discussion of "One Year After The Crisis", in Salzburg.



Best Regards,

NordMarkets.com

NordMarkets Morning FX

BRIEFING
European open: Euro opens the European session firm, euro-dollar placing reported resistance between $1.4685/1.4700 under early pressure, challenging freshly posted 2009 highs at $1.4686 (NY). Asian traders had noted Asian sovereign names linked to supply in this area, with a US money bank noted sitting ahead of a much publicized barrier at $1.4700. Euro-sterling provided a focus in Asia trade, the rate extending its recent recovery through a reported barrier at stg0.8900, to take it on to stg0.8918, with added buys into Europe extending the move to stg0.89305. This move reflecting the ongoing pressure on sterling, with cable struggling to take advantage of dollar pressure with market focusing on the downside while rate holds below $1.6510/15, a break and clear of $1.6400 suggested to target $1.6285. Aussie found decent demand interest on dips with focus set on resistance at $0.8700, Kiwi resistance at $0.7100. Dollar-yen was locked in a tight range around Y91.00. UK jobs data (0830GMT) and eurozone inflation (0900GMT) this morning's focus, US CPI at 1230GMT, IP and Cap.Ut. at 1315GMT later.

EURO
Euro-dollar pened Asia around $1.4665, off late NY recovery highs (fresh 2009 highs) at $1.4686 after rate had seen post retail sales lows of $1.4561. Rate marked lows at $1.4656 in early trade before model account buys from below $1.4670 took rate up to $1.4680. Move met decent Asian sovereign sales (several names noted) that eased rate back to $1.4662 but dip attracted willing buyers to take it back, marking session highs at $1.4684. Further sales from same names eased rate to $1.4667 only to meet renewed dip demand that was lifting the rate back into Europe, with added buys allowing rate to retest Tuesday's high at $1.4686. Pressure continues, currently seen chipping way at the reported resistance, said to extend toward an option barrier at $1.4700, a US money bank said to have offers placed ahead. Stops noted above the figure, which if triggered expected to open a move toward $1.4720. One Swiss name has suggested fading rallies into the area between $1.4720/50. Bids seen between $1.4660/50.

YEN
Dollar-yen breaks below overnight lows at Y90.78 as market reacts to new FinMin Fujii comments that he is opposed to FX intervention if forex moves are gradual, the rate extending its base through support at Y90.80/70 (overnight low Y90.78) to Y90.49. Rate had traded with an underlying soggy tone through the Asian session, the rate pivoting around Y91.00 in a relatively tight range of Y90.78/91.17. The recently reported barrier at Y90.00 seen in focus again though expect decent demand to emerge around Y90.50, stronger between Y90.20/00 (Y90.18 recent low). Euro-yen trade in Asia was contained within Y133.26/72, with moves dictated mainly by euro-dollar action. Rate has broken down to Y132.96 in early Europe following those reported Fujii comments, but continued euro-dollar demand seen tempering this react move. Euro-yen bids seen to Y132.80, a break to open a deeper move toward Y132.55/45. Offers Y133.70/80.

USDYEN - TECHNICALS
Dollar-yen downside risks persist following inability to break above the Tenkan line of the Ichiomoku cloud at Y91.75, which also coincides with major low seen in July. Whilst this caps the risk is on a revisit of the double-day low at Y90.18/21. The daily studies whilst o/sold, are still above previous reversal levels - Risk seen to Y89.79.

RES 4: Y95.31/33 Base of the Ichimoku cloud, 100-day moving average
RES 3: Y94.74 200-day moving average
RES 2: Y93.00 21-day moving average
RES 1: Y91.26/75 5-day moving average, Tenkan line of Ichimoku cloud

SUP 1: Y90.76 61.8% of Y90.23 to Y91.63
SUP 2: Y90.18/21 Double-day low Sept 11, 14
SUP 3: Y89.67/79 50% proj of the Aug/Dec downmove, Proj channel base
SUP 4: Y87.12 Major lows Dec/Jan

EURUSD - TECHNICALS
Euro-dollar bulls are seen sharpening horns for fresh assault on new yearly highs as the daily studies continue to point higher and 2.00% moving average envelope widens further and now valued at $1.4793. Initial resistance is seen at the daily Bollinger band top at $1.4699.

RES 4: $1.4851/62 100% projection of the Q4 2008 rally, High 22 Sep
RES 3: $1.4793 2.00% moving average envelope
RES 2: $1.4721 High 18 Dec
RES 1: $1.4699 Daily Bollinger band top

SUP 1: $1.4623 5-day moving average
SUP 2: $1.4517/20 Low 14 Sept, Former resistance line from 3 June
SUP 3: $1.4447 August high
SUP 4: $1.4388 21-day moving average

GBPUSD - TECHNICALS
Cable's sell-off triggered a break of neckline of head-&-shoulders pattern on hourly charts at $1.6545 -- targets measured move to $1.6303. In addition, price action has priced below the 21 & 55-day moving average's and next support seen at $1.6324/54. M/t risk is seen to $1.6168/95 -- channel base from June 8 and the 100-day moving average.

RES 4: $1.7044/52 High 5 August, November 2005 low
RES 3: $1.6822 76.4% of August pullback
RES 2: $1.6716 Resistance line from July 2008 high
RES 1: $1.6657 Hourly high

SUP 1: $1.6324/54 Low 4 Sept, 61.8% of $1.6116 to $1.6740
SUP 2: $1.6239 Minor low 3 Sep
SUP 3: $1.6168/95 Channel base from June 8, 100-day moving average
SUP 4: $1.6033 Low 13 July

DAILY CALENDAR
European data kicks off at 0700GMT, when Spain's Jul service sector data is released.

At 0730GMT, the Riksbank is scheduled to publish the minutes of Sept 2 monetary policy meeting, whilst EC Economic & Monetary Affairs Commissioner Joaquin Almunia speaks at the Annual Eurostat conference, in Brussels

Back to Italy at 0800GMT, with the release of August's final CPI/HICP data.

At 0820GMT, ECB Executive Board member Jose Manuel Gonzlez-Pramo is slated to give a speech on "Reading the Present to Prepare the Future" at Eurostat Conference, in Brussels

In the UK, the monthly employment report is due at 0830GMT. August claimant count, Juky average earnings and the July ILO unemployment rate are all out. Analysts are looking for a further pick-up in August's claimant count by 25,000, leaving the claimant count rate at 5.0%, versus 4.9% in July. They are also looking for a further pick-up in the more closely watched ILO unemployment rate to 8.0% in July from 7.8% in June

Back in Europe, ast 0900GMT, the EMU August final CPI/HICP data is released. At the sa,e time, the German Retail Association (HDE) releases new retail sales forecasts, in Duesseldorf

US data kicks off at 1100GMT, the US MBA mortgage application index for the Sept 11 week is set for release.

The main release is at 1230GMT, when the August Consumer Price Index is released. Analysts expect August CPI to rise 0.4% as gasoline pump prices rebounded slightly. Core CPI is expected to rise 0.1%.

Also due at 1230GMT is the second quarter US current account data and Canada's July 2009 manufacturing survey.

This is followed at 1300GMT with the release of the July International Capital System data from teh Treasury. At 1315GMT, the Aug Industrial production, capacity utilization data are released.

Industrial production is expected to rise 0.7% in August after posting a 0.5% increase in July. The manufacturing sector may get another boost this month due to brisk auto sales. Factory payrolls fell 63,000 in the month, with auto production jobs down 15,000. The factory workweek held steady at 39.8 hours. The ISM production index rose to 61.9. Capacity utilization is forecast to rise to 69.0%.

Oil markets will be anticipating the usual inventories stocks at 1430GMT, when the Sept 11EIA Crude Oil Stocks is released.

Lastly, at 1700GMT, the Sept Housing Market Index (NAHB) is released.



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NordMarkets.com