NordMarkets Morning FX - October 29

MORNING FX
BRIEFING
The negative close on Wall Street passed over to Asian equity markets with the recent paring back of risk trades continuing through the overnight session. Yen and dollar were the main beneficiaries, strong sales of yen crosses, Aussie-yen and sterling-yen highlighted, helped to punch dollar-yen to session lows of Y90.23, with euro-yen making an appearance below Y133.00, trading to a low of Y132.81. Euro-dollar remained under pressure, having been sold off after Wednesday's London fix, extending the NY low of $1.4693 to $1.4683 in early trade before rate was able to recover back above the figure. This correction allowed euro-yen to edge back above Y133 later in the session, though the euro seen under renewed pressure in early Europe. RBNZ left interest rates unchanged, as widely expected, the accompanying statement disappointing as it provided no indication for any near term rate hikes. Kiwi came under pressure, Aussie-kiwi was able to lift despite the reported sales of Aussie-yen. US GDP data today's highlight, with German unemployment, UK money data and EMU confidence also noted.

EURO
Euro-dollar opened the Asian session around $1.4720, off late NY lows of $1.4690, with the recovery extending to around $1.4730 in early trade before meeting strong headwinds from cross yen sales. Rate dropped back, moving through the NY low to $1.4683, the move meeting decent demand interest in the area between $1.4685/80 before recovering. Talk late Wednesday suggested that the $1.4680 level holds the strike of a large expiring option for today's 1400GMT cut and expected to provide some attractive influence. Upside correction continued through the balance of the Asian session, the rate edging up to highs of $1.4736. Rate dropped back toward $1.4700 ($1.4703 61.8% $1.4683/1.4736) as early Europe sold into the recovery, but dip attracted further demand, lifting it back to current level around $1.4720. Weak talk in Asia suggested Asian sovereign demand seen off the earlier lows and expected a similar scenario to Wednesday with ACB's buying into dips. Bids remain in place toward $1.4700, stronger between $1.4685/80. Offers $1.4736 through to $1.4750. Further offers $1.4770/80. US GDP the main focus.

Elsewhere, euro-sterling is under pressure again into early European trade Thursday, with traders noting further long positions getting squeezed out, with continued talk that M&A related sales have provided the main downside lead. Rate saw a low in NY of stg0.8951, consolidated the break under stg0.9000 in Asia between stg0.8976/95, with the reported early sales taking the rate to early session lows at stg0.8955. Bids remain in place to stg0.8950, a break below to open a deeper move toward stg0.8910, with demand noted from here and extending to stg0.8898. Some suggest stg0.8840 as a near term target. Resistance remains toward stg0.9000.

The euro sees the bear-cross in the daily Stochastic, 10-day momentum and now in the 5 & 21-DMAs, keeping bear's on further Fibonacci retracements at $1.4628 and $1.4561. Bulls now need a break above $1.4825/35 to get back in control.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5080/10 Top of the daily Bollinger band
RES 2: $1.5060/64 Potential double-day high 23, 26 Oct, 1% MAE
RES 1: $1.4825/35 5, 21-day moving average

CURRENT LEVEL: $1.4728

SUP 1: $1.4628 50% retracement of Sep-Oct rally
SUP 2: $1.4561/90 38.2% of the Jun-Oct advance 2% MAE, Bollinger band
SUP 3: $1.4480/88 Low 2 Oct, 23.6% of Mar-Oct advance
SUP 4: $1.4407/47 50% retracement of June-October advance, High 5 Aug

YEN
Yen crosses were under heavy pressure in the NY session as euro-yen gave back close to 200-points, closing just off the Y133.28 low, while dollar-yen slipped back to Y90.55, ending around Y90.75 amidst a backdrop of negative equity markets. Early Asian dealing then saw Japanese margin stops being triggered in the crosses as Aussie-yen and sterling-yen were sold heavily. Euro-yen followed suit, slipping from early highs at Y133.73 to fresh lows for the recent run at Y132.81. Dollar-yen had notched early highs at Y90.81 before a move down to Y90.40, while Japanese data again came in better than forecast as Industrial Production rose 1.4% m/m versus expectations of +1%. Tokyo names gunned for stops through Y90.30 as dollar-yen slipped to Y90.23, consolidating under Y90.40 into the Asian afternoon. Euro-yen was able to bounce back to Y133.30, subsequently remaining contained in a relatively tight range ahead of the European open. Early Europe now seeing bounces extended as dollar-yen makes a show above Y90.50 and euro-yen moves to Y133.40.

Dollar-yen sees bids in the Y90.20/15 area this morning, with stops coming in below Y90.00. Techs see the 50% retrace of this month's rally under pressure at Y90.17, ahead of the 61.8% retrace at Y89.66. Traders are also noting Toushin issuance today for a maximum value of Y400bn, said to be split primarily between S. Africa, Brazil and Australia, though Tokyo names were not expecting a good take-up. Better results are expected Friday with Y1trn of issuance due (Y100bn each for S.Africa, Brazil, China and Australia).

The daily stochastic is now making a bear-cross in dollar-yen as the market pulls back below the 8 Oct support line and tests the Kijun line and 21-DMA at Y90.10/25. Initial resistance is at Y91.25/40 from the Tankan line and 5-day moving average. Euro-yen has pulled back further and now moved below a series of resistance from Y133.50 to Y134.00, which includes the parameters of the Ichimoku cloud and also the 21 & 100-DMAs. This all comes after the daily stochastic sees a bear-cross. Next Fibonacci level is nearby, at Y132.68.

RES 4: Y92.81/90 Projected channel top, 50% of Aug/Oct decline
RES 3: Y92.53 Failure high 21 Sep
RES 2: Y92.00 Base of the Ichimoku cloud
RES 1: Y91.25 Tenkan line of the Ichimoku cloud

CURRENT LEVEL: Y90.37

SUP 1: Y90.25 21-day moving average
SUP 2: Y90.09/17 Low 20 Oct,Kijun line, 50% of October rally
SUP 3: Y89.66 61.8% retracement of October rally
SUP 4: Y88.80 Lows 14 Oct

CABLE
Opened Asia around $1.6390 and initially edged to mark session highs at $1.6409 before meeting strong headwind sales as Japanese accounts sold yen crosses, sterling-yen and aussie-yen coming under the main pressure. Cable was pressured to lows of $1.6335 (almost mirroring Wednesday's early Asian move). Cable recovered off lows, as continued sales of euro-sterling provided a counter to sterling-yen supply, the rate edging back to $1.6400 ahead of the European open, dipping back to $1.6360 before stronger selling in euro-sterling provided the added upside momentum to spike cable to $1.6446. Rate currently trades around $1.6440. Offers seen placed between $1.6465/70 with recent reports noting stops in place on a break above. Tech resistance noted around $1.6480 may restrict further upside move, one trader suggests. However, through here and rate can edge toward $1.6500 ahead of $1.6530/35. Support seen at $1.6420 (23.6% $1.6335/1.6446), a break here to allow for a deeper move toward $1.6405/00.

In Cable, the bearish engulfing pattern and the bear-cross in the stochastic now risks being joined by a bear-cross in the 10-day momentum, keeping bear's attention on Fibonacci retracements of the $1.5708 to $1.6694 rally from $1.6201 and the $1.6115/70 support area, which starts with the 21-DMA. While $1.6251 remains the low, upside retracements are $1.6474, $1.6526.

RES 4: $1.6726/40 76.4% retracement of $1.7041-$1.5708, High 11 Sep
RES 3: $1.6695 Current top of the daily Bollinger band, High 23 Oct
RES 2: $1.6526 61.8% retracement
RES 1: $1.6474 50% retracement of 23 Oct decline

CURRENT LEVEL: $1.6390

SUP 1: $1.6240 Low 19 Oct
SUP 2: $1.6201 50% retracement of the October recovery
SUP 3: $1.6170 21-day moving average
SUP 4: $1.6115/34 High 8 Oct, Low 1 Sep, Spike 30 Sep, Low 21 Sep


DAILY CALENDAR
European data for Thursday started at 0700GMT when German seasonally adjusted employment fell by 33,000 persons between August and September to 40.101 million, according to the Federal Statistical Office. In non-seasonally adjusted terms, employment rose by 269,000 to 40.355 million as measured by the International Labour Organization.

From 0730GMT, there is an ECB conference on key developments in monetary economics. Speeches will be delivered by ECB President Jean-Claude Trichet and Vice-President Lucas Papdemos. The event takes place in Frankfurt and continues through to Friday.

At 0800GMT, German Chancellor Angela Merkel is due to deliver a speech in parliament on the agenda of her new government.

The main German unemployment data for October is due at 0855GMT and is expected to see the unemployment rate edge up to 8.3%. This is followed shortly by German VDMA machine-tool orders data at 0900GMT.

UK data at 0830GMT Thursday sees Final M4 Lending, Lending Secured On Dwellings, Consumer Credit and also Final M4 Money Supply. Final EMU data at 1000GMT sees the EMU October economic sentiment index and the business climate indicator, where the economic sentiment index is expected to rise to 84.5 from 82.8 last month.

At 1000GMT, ECB Governing Council member Mario Draghi speaks at the "2009 World savings day", in Rome , while at 1110GMT, ECB Governing Council member Axel Weber is due to participate in a discussion on the financial crisis, at an event in Berlin.

US data starts at 1230GMT with the weekly Jobless Claims, while Q2 GDP and the Chain Price Index are due at the same time.

Jobless claims are expected to fall 6,000 to 525,000 in the October 24 week, while third quarter advance GDP is expected to rise 3.0% after the 0.7% decline in the previous quarter.

The key factors are expected to be a strong gain in PCE due to car sales, smaller fixed investment and inventory declines, and increased government spending. Net exports appear to be a very modest drag in this quarter's release and after adding to growth in previous quarters. The chain price index is forecast to rise 1.4% after the flat reading in the second quarter.

At 1330GMT, Treasury Secretary Tim Geithner testifies to the House Financial Services Committee on "Systemic Regulation, Prudential Matters, Resolution Authority and Securitization."

US data then continues at 1400GMT with Housing Vacancies data, which is followed at 1430GMT by the weekly Natural Gas Stocks data and at 1500GMT by Kansas City Fed Production.

Later on, at 1615GMT, White House National Economic Council head Lawrence Summers speaks to the Economic Club of New York.

Late in Europe, at 1730GMT, Bundesbank board member Thilo Sarrazin takes part in a panel discussion, in Berlin.

Late US data sees the 2030GMT release of M2 Money Supply. Overnight, at 0040GMT Friday, Treasury Secretary Tim Geithner speaks to the Economic Club of Chicago.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 28

MORNING FX
BRIEFING
The Aussie provided the early focus in Asia with release of CPI (broadly in line with expectations) taking Aussie-dollar up from $0.9180 to $0.9208 before reversing, the move down influenced by strong sales of Aussie-yen. Trade to lows of $0.9072 attracted strong ACB demand that lifted the rate back above $0.9100 into early Europe. These sales weighed on dollar-yen to take this rate through Y91.50 ((NY low Y91.71) to Y91.07, with cross yen sales providing a heavy tone. Asian currencies lost ground to a recovering dollar with central banks seen on top to contain volatility. Euro-dollar again saw decent Asian sovereign demand, providing the main impetus to edge back above $1.4800, from lows of $1.4789, extending the recovery from NY lows at $1.4769. Cable retained a buoyant tone, holding well above Tuesday's pullback lows at $1.6311. Norges Bank in focus, with most expecting a hike of 25bps, the accompanying comments to be of more interest. German CPI state data to begin today. US durable goods and new home sales to provide afternoon interest.

EURO
Euro-dollar closed the NY session around $1.4800/05, having recovered off session lows of $1.4769 ($1.4772 50% $1.4480/1.5064) to $1.4821 ahead of the close. Rate initially squeezed down to $1.4789 before meeting ACB demand interest. This buying, along with dollar sales emanating from downside pressure on dollar-yen, acted to take rate up to session highs of $1.4828. Offers placed ahead of $1.4830 kept the rate capped into Europe, the break above into the session allowing it to edge on to $1.4840. Rate currently trades around $1.4830. Offers seen placed between $1.4840/50, a break above to open a move toward $1.4865/70 ahead of $1.4900, though one Asian trader has noted that funds have been more than willing to sell into the ACB inspired recovery. Support now seen back toward $1.4800, with stronger interest noted between $1.4770/60. A break here to $1.4740 with stops placed on a break below. Further demand $1.4725 with talk of short entry sell orders placed on a break below. One trader has suggested that the break of $1.4760 exposes $1.4680.

The euro sees a bear-cross in the daily Stochastic study and another potential cross on 10-day momentum as the pair attempts to sustain a break of the 21-DMA at $1.4825 to turns bear's focus to Fibonacci retracements at $1.4772 and $1.4703. Bulls now need a break above $1.5060/64 to get back in control, although initial resistance is $1.4905/30.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5080/10 Top of the daily Bollinger band, 1% MAE
RES 2: $1.5060/64 Potential double-day high 23, 26 Oct
RES 1: $1.4905 5-day moving average

CURRENT LEVEL: $1.4812

SUP 1: $1.4769 Low 27 Oct, 1% moving average envelope
SUP 2: $1.4772 50% retracement of the October advance
SUP 3: $1.4703 61.8% retracement of the October advance
SUP 4: $1.4625 2% moving average envelope


YEN
Dollar-yen closed a muted US session Tuesday around the Y91.80 level, with euro-yen again under sell pressure, slipping to Y135.66 and closing just off the lows. Early Asian demand for yen crosses proved to be temporary as exporters sold Aussie-yen in particular, taking dollar-yen back from Y91.81 to trigger stops through Y91.50. Model funds were euro-yen sellers as stops were hit in this pair through Y135.45 down to initial lows near Y135.20. Subsequent bounces were short-lived, dollar-yen extending the lows down to Y91.07 into the Asian afternoon as euro-yen dropped down to Y134.84. Traders noted strong Japanese data adding fuel for yen bulls as retail trade came in at +0.9% m/m, with the y/y rate at -1.4% versus -1.8% previous. European dealing opens with dollar-yen climbing back towards Y91.40, traders now seeing decent-sized stops building on a break below Y91.00, while techs note the failure to hold within the Ichimoku Cloud yesterday. Bids seen coming in around the Y90.80 area, while light offers are at Y91.50, more at Y91.80 and Y92.30/50.

The daily stochastic is poised for a bear-cross in dollar-yen as the market pulls back. However, the market remains above the base of October's rising channel at Y90.51. Initial support is the Tenkan line of the Ichimoku cloud at Y90.80, while initial resistance is at the 5-day moving average at Y91.75 and the Y92.32 high. Euro-yen has pulled back after testing the bull-flag target and the daily stochastic is now seeing a bear-cross. Main Fibonacci levels are Y134.90, which is coming under pressure, and Y133.80, which matches Ichimoku levels and moving average level. Initial resistance is the Tenkan line of the Ichimoku cloud, at Y136.00 and 5-DMA at Y136.80.

RES 4: Y94.00/05 Ichimoku Cloud top, 61.8% retracement of Aug/Oct decl
RES 3: Y93.30 High 7 Sep, 100-day moving average
RES 2: Y92.90 50% retracement of Aug/Oct decline
RES 1: Y92.53/64 Failure high 21 Sept, Projected channel top from 8 Oct

CURRENT LEVEL: Y91.16

SUP 1: Y90.51/68 Support line 8 Oct, 38.2% of October rally
SUP 2: Y90.15/25 Kijun & 21-day moving average
SUP 3: Y90.09/17 Low 20 Oct, 50% of October rally
SUP 4: Y89.66 61.8% retracement of October rally


CABLE
Opened Asia around $1.6378 with rate influenced by the early CPI react rally in Aussie, edging to an early high of $1.6406.Rate reversed off highs, the move down seen in line with Aussie as both Aussie-yen and sterling-yen came under pressure out of Tokyo, cable pressed to lows of $1.6338, though traders reported that sterling continues to enjoy an underlying buoyant tone, though just off recent pullback lows of $1.6251, seen after last Friday's release of poor UK GDP. Cable bounced between $1.6330/35 and $1.6380/85 through the balance of the session, currently trading around $1.6370 in early European dealing. Offers remain in place between $1.6380/85,a break above to open a move back toward $1.6400/05. Support $1.6335/30, a break to allow for a retest of Tuesday's pullback area between $1.6315/10 ahead of $1.6295/85 area. Stops noted below $1.6280, which if tripped to expose recent pullback lows of $1.6251, with bids seen to $1.6250.

The bearish engulfing pattern in cable as well as the bear-cross in the stochastic turned bear's attention to Fibonacci retracements of the $1.5708 to $1.6694 rally from $1.6201 and the $1.6115/60 support area, which starts with the 21-DMA. While $1.6251 remains the low, upside retracements are $1.6474, $1.6526. Euro-sterling is pulling back further from the 21-DMA but signals from daily studies are not convincing, with the stochastic and momentum studies bouncing along the lows.

RES 4: $1.6726/40 76.4% retracement of $1.7041-$1.5708, High 11 Sep
RES 3: $1.6680/95 Current top of the daily Bollinger band, High 23 Oct
RES 2: $1.6526 61.8% retracement
RES 1: $1.6440/73 Hourly high, 50% of 23 Oct decline

CURRENT LEVEL: $1.6361

SUP 1: $1.6240 Low 19 Oct
SUP 2: $1.6201 50% retracement of the October recovery
SUP 3: $1.6160 21-day moving average
SUP 4: $1.6115/34 High 8 Oct, Low 1 Sep, Spike 30 Sep, Low 21 Sep



MORE
Dec Bunds opened down 2 ticks Wednesday at 121.50, but reversed direction after strong gains towards the Chicago close after stellar 2-year Note auction and stronger than expected Australia CPI data. Focus is on supply from Germany, which includes re-opening of the 2.5% Oct 2014 Bobl 155 and 1.75% Apr 2020 BUNDei issue for combined size of E7.0bln. US sells $41.0bln 5-year Note auction. Also eyed is German state CPI data and Norges Bank is set to become the first European central bank to pull the rate hike trigger by 25bps to 1.50%.

DAILY CALENDAR
European data for Wednesday started at 0700GMT with German import prices, which fell 0.9% on the month in September, bringing the annual change to -11.0%. Energy costs fell back 5.7% on the month and plummeted 38.1% year-over-year. Export prices declined 0.1%, leaving the annual fall at 3.2%.

This is followed at 0830GMT by the Italian ISAE business survey. At 0900GMT, the ECB is due to publish the Euro area bank lending survey. Also in Europe today, the flash German HICP data for October is due after all the states have reported, with forecasts of unchanged m/m, -0.2% y/y.

In the UK, September Land Registry House Prices are due, at 1100GMT. US data starts at 1100GMT with the weekly MBA Mortgage Application Index, which is followed by Durable Goods Orders at 1230GMT, which are expected to rise 1.5% in September after the revised 2.6% drop in August. Boeing reported 20 orders in September, down from the 32 reported in August.

In Norway, the Norges Bank announces its monetary policy decision at 1300GMT, which is followed by a press conference. Overall, the market is looking for a 25bps hike to 1.50%, although there is a chance of a 50bps rate hike. One leading reason deterring a 50bps move is the recent Nok strength. The focus is also on the Monetary Policy Report and, in particular, the new projected path of policy rates to gauge how much more rate hikes will be likely into 2010. All in all, the Norges Bank is seen as likely to be the first European central bank to pull the rate hike trigger.

US data continues at 1400GMT, when new home sales are expected to rise further to a 440,000 annual rate in September after rising modestly in August to the strongest pace in nearly a year.

This is followed at 1430GMT by the weekly Crude Oil Stocks data.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 20

MORNING FX

BRIEFING
The dollar remained under pressure into early Asian trade with risk trades boosted by After the Bell releases from Apple and Texas Instruments, the strong earnings data providing a lift for US index futures and Asian equities. Last night's meeting of Eurogroup finance ministers in Luxembourg seemed to show an absence of concern about the euro's strength, at least publicly, which was seen adding to euro demand into early Asia. Euro-dollar was the main focus in a will it, won't it break $1.5000, the move up posting highs at $1.4994 before meeting strong offers stacked toward the figure which prevented further upside progress. RBA Minutes reflected RBA Stevens' hawkish tone from last week and provided a lift above $0.9300 for the Aussie, only to meet strong supply that restricted upmove at $0.9310. A major Japanese name cited for taking dollar-yen down from Y90.75 to Y90.35, with further sales taking it on to Y90.08. Asian central banks were active overnight buying dollar-Asia with expectation of balancing to be seen into Europe. Dollar remains soft into Europe with focus remaining on $1.5000.

EURO
Euro-dollar opened Asia around $1.4958, the release of strong earnings reports from Apple and Texas Instruments After the Bell, as well as no major concern voiced over the strength of the euro out of last night's meeting of EU-16 FinMins, prompted strong demand for euro-dollar, the buying able to push rate through the NY high at $1.4967, breaking into fresh 14 month highs above $1.4968, with stops triggered on the break of $1.4975 to take it on to an initial high of $1.4980. A UK clearer sold it back to $1.4960/55 before rate picked up fresh demand into the afternoon session, the buying extending the rally to $1.4994 before meeting strong offers, reportedly stacked toward the much reported barrier level at $1.5000. Traders did note that a major Japanese name was a stand out seller ahead of the figure. Rate then settled back into a $1.4965/85 range ahead of the European open, currently trading around $1.4970. Offers remain in place to $1.5000, with talk of a mix of offers and stops placed between $1.5005/10. Support seen at $1.4965 through to $1.4950, stronger at $1.4920 and $1.4880/70.

The euro is edging above the recent double top to score new highs, although the daily studies are reaching very stretched levels and momentum is fading. Overall trend is clearly firm, however, and the pair remains within the Bollinger band and 1% MAE, which are both rising targets at $1.5010/20, as well as within the rising October channel of $1.4862/1.5079.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5155 2.0% moving average envelope
RES 2: $1.5079 Top of October channel
RES 1: $1.5010/20 Top of the daily Bollinger band, 1% MAE

CURRENT LEVEL: $1.4977

SUP 1: $1.4862 Support line, High 23 Sep
SUP 2: $1.4750 21-day moving average
SUP 3: $1.4700 1% moving average envelope
SUP 4: $1.4480 Low 2 Oct, Base of Bollinger band


YEN
Dollar-yen closed the US session Monday towards the bottom-end of the range around Y90.55, while euro-yen ended around earlier Asian opening levels at Y135.50. Early highs were notched into the Asian session at Y90.80 and Y135.84 before both pairs came lower, largely on the back of dollar-yen supply coming from a major Japanese name which knocked the pair down to initial lows at Y90.35. Euro-yen meanwhile fell back to Y135.20, subsequent bounces relatively limited in both pairs before fresh lows were hit into the Asian afternoon at Y90.08 and Y134.87. Toushin interest is on the radar for Wednesday, as a Japanese investment house is scheduled to issue approximately Y1.2trn of fresh funds, said to primarily be made up of Brazil, South Africa and Australia. Dollar-yen trading around Y90.20 into the European session, traders now seeing bids into Y90.00 where large expiry interest is again noted for the NY cut today. Techs see the 21-day moving average as key at Y89.93. Offers are back at Y90.40/60 in small, stronger at and above Y91.00. Euro-yen supply still seen into Y136.00/10 with stops above.

Dollar-yen put in a short-term base following bounce ahead of key support levels at Y87.12, while recovery above the 21-DMA at Y89.90 also encouraged bulls to target the Y91.75 Fibonacci level. However, daily studies are fading and while Y91.33 remains the near-term High, Fibonacci levels are at Y90.06, Y89.67 and Y89.27. The daily studies remain bullish in euro-yen, although are starting to look stretched as the cross holds over resistance at The move now risks stalling at the 24 Aug high of Y136.08.

RES 4: Y92.90 50% retracement of Aug/Oct decline
RES 3: Y92.53 Failure high 21 Sept
RES 2: Y91.75 38.2% retracement of Aug/Oct decline
RES 1: Y91.33 High 16 Oct

CURRENT LEVEL: Y90.16

SUP 1: Y89.90 21-day moving average
SUP 2: Y89.50/60 Minor support line, Tenkan line of Ichimoku cloud
SUP 3: Y88.83 Low 14 Oct
SUP 4: Y88.01 Low 7 Oct


STERLING
Cable opened Asia around $1.6395 and pushed to retest NY highs at $1.6425 as the dollar came under early pressure into the session. Rate failed to break above on this initial attempt, dropping back below the figure only to meet strong demand at $1.6375 that provided the overnight base. Rate edged back, pivoting the figure for the balance of the overnight session before early Europe provided renewed demand interest to take it above the overnight high. Triggered stops added to the upside momentum to take it on to $1.6447, with reported offers ahead of $1.6450 above to counter. Rate currently seen resting on the broken resistance at $1.6425, with bid interest seen placed to $1.6420. A break here to allow for a deeper pullback toward $1.6505/395 with stronger interest remaining in place at $1.6375. Above $1.6450 to open a move toward $1.6470/80 ahead of $1.6500.

Cable continues to extend ground above the 21-DMA and holds above initial support of $1.6300/1,6240. Daily studies remain firm for now with the stochastic pushing into overbought territory but below historic highs. The move is now testing the top of the Bollinger band as well as a resistance line from 6 Aug, which coincide at $1.6438. Euro-sterling backed away from the top of the daily Bollinger band and subsequently crashed through the 21-DMA, which turns initial resistance with the 5-DMA at stg0.9165/90. Studies are negative and now gaining momentum, encouraging bears to target Fibonacci levels at stg0.9047/58.

RES 4: $1.6740 High 11 Sep
RES 3: $1.6532 61.8% retracement of $1.7041-$1.5708
RES 2: $1.6467 High 23 Sep
RES 1: $1.6438 Resistance line from Aug 6, Top of daily Bollinger band

CURRENT LEVEL: $1.6405

SUP 1: $1.6300 5-day moving average
SUP 2: $1.6240 Low 19 Oct
SUP 3: $1.6117/34 High 8 Oct, Low 1 Sept, Spike high 30 Sep, Low 21 Sep
SUP 4: $1.6050 21-day moving average



OPTIONS AND MORE
FX Option expiries for today's 1400GMT cut,
* Euro-dollar; $1.5000, $1.5300. Exotic; $1.5000 KO
* Dollar-yen; Y90.00(lge), Y89.75, Y90.60
* Aussie; $0.9300
* Dollar-Canada; C$1.0300, C$1.0250, C$1.0450

Elsewhere, Japan's benchmark stock indices ended Tuesday's session higher, boosted by overnight gains in the US. The Nikkei 225 was higher by 100.33 points, or 0.98%, to stand at 10336.84, while the broader-based TOPIX was 7.65 points higher at 913.45. Volume for the Nikkei constituents totalled a preliminary 1.229 bln shares, with 150 issues trading higher, 52 lower and 23 unchanged.

DAILY CALENDAR
European data for Tuesday started at 0600GMT, showing German producer prices fell 0.5% between August and September, leaving the annual change at -7.6%. Excluding energy prices, which fell 1.7% on the month and 16.4% on the year, PPI was unchanged month-over-month and down 3.3% in the year to September.

There is a slew of UK data at 0830GMT, including Provisional M4 Money Supply, the September public finances report , BoE capital issuance data and also CML Gross Mortgage Lending, also for September.

US data starts at 1145GMT with the weekly ICSC-Goldman Store Sales data, which is followed at 1230GMT by Housing Starts, Building Permits and the Sep Producer Price Index.

Producer prices are expected to fall 0.3% in September. Analysts expect a decline in energy prices following the sharp movements in recent months. Gasoline pump prices were reported down slightly. Core PPI is expected to rise 0.1%.

Housing starts are expected to rise to a 615,000 annual rate in September, as builders have now found inventory levels more tolerable.

US data continues at 1255GMT with the weekly Redbook Average. The Bank of Canada Interest Rate Announcement is then due at 1300GMT.

Later on, at 1915GMT, the Bank of England's King speaks in Edinburgh.

Late US data sees the 2100GMT release of the weekly ABC News Survey, while at midnightGMT Tuesday night, Philadelphia Fed President Charles Plosser delivers a speech on monetary policy in a tough environment to the Standford Institute for Economic Policy Research in Palo Alto, California.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 19

MORNING FX

BRIEFING
Weekend press reports provided the main trading influence into early Asian trade Monday, ITEM Club report suggesting sterling would remain close to parity with the euro for up to 4 years weighed on the pound, article in the AFR that recent comments from RBA Stevens had been misinterpreted and next rate decision in Australia still data dependent knocked Aussie lower. WSJ report 'Euro strength is worrisome' noting that today's Luxembourg meeting of EU-16 FinMins is likely to talk about recent euro strength (ECB Trichet also due to travel to China before year end) helped weigh on the euro. Euro-dollar dropped to initial lows of $1.4829 before demand emerged ahead of stops at $1.4825 to correct it back to $1.4890, cable dropped to $1.6281 but release of positive Rightmove housing data allowed it to recover to $1.6371, filling the gap from NY's close before BOE Posen comments on support for QE extension knocked it lower again. Dollar-yen was basically sidelined, pivoting Y91.00. Main forex driver remains interest rates/time table of exit strategies for liquidity provisions.

EURO
Euro-dollar opened Asia around $1.4893 and initially edged to session highs of $1.4920 before reversing, the move down gaining momentum as a black-box fund provided added weight to take it through $1.4880, with triggered stops below $1.4850 and $1.4835 taking it to lows of $1.4829. Euro managed to recover, the recovery aided by euro-yen demand, taking the rate to $1.4890 ahead of the European open. The late rally saw early Europe sell back into the move, with a WSJ report further highlighting today's Luxembourg meeting of EU-16 FinMin's that currency strength will likely be discussed, the rate easing back to $1.4870, currently around $1.4880. Bids remain in place at $1.4870 (38.2% $1.4829/93), a break to allow for a deeper move toward $1.4855/45 ahead of $1.4829. Bids seen placed between $1.4830/25 with overnight talk mentioning stops placed on a break of $1.4825. A break here exposes next support at $1.4800, with more stops noted below $1.4795. Offers $1.4890/00, $1.4920-30/35 with stronger interest placed between $1.4960/70.

Potential double-day high at $1.4968, sets up risk of a reversal lower, especially as this level represented the near-term upside bull-flag objective and also the capped topside in November 2007. The dailt stochastic remains firm, but while $1.4968 defines the high, near-term Fibonacci levels are $1.4781, $1.4724 and $1.4666.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5130 2.0% moving average envelope
RES 2: $1.5059 Top of October channel
RES 1: $1.4968/72 Double-top, Major high Nov 2007, Bull flag

CURRENT LEVEL: $1.4899

SUP 1: $1.4844 Support line, High 23 Sep
SUP 2: $1.4735 21-day moving average
SUP 3: $1.4500 Base of Bollinger band
SUP 4: $1.4480 Low 2 Oct


YEN
After extending October highs to Y91.33 in the NY session Friday, dollar-yen eased back to close around Y90.93, while euro-yen ended with decent gains on the week around Y135.50. Data released in Japan Monday showed the August Tertiary Index rising 0.3% versus 0.6% in July, slightly better than market expectations, while the minutes of the latest BoJ decision were released with no surprises. Dollar-yen hit early highs at Y91.15 in Asia as euro-yen topped out at Y135.91, both pairs then coming lower into the fix, dollar-yen easing back below Y90.80 as the cross dropped to Y134.76. Balance of the session was fairly subdued as dollar-yen struggled to regain the Y91 handle, slipping back to post late lows at Y90.73, while euro-yen held between Y135.00/20. Bids reported below Y90.60 from US accounts, while exporter supply is now placed at and above Y91.00 with stops said to come in on a break of Y91.25. Euro-yen still holding above the Ichimoku Cloud following last week's topside break, offers seen at Y136.00/10, ahead of resistance at Y136.44 (76.4% August-October sell-off).

Dollar-yen has put in a short-term base following bounce ahead of key support levels at Y87.12 -- the Dec/Jan low and Y87.44/51, where former is channel base from May 22 and latter a trend line from April 1995. In addition, the break above the 21-DMA at Y90.05 was also encouraging and close above will encourage bulls to target Y91.75 Fibonacci level.

RES 4: Y92.90 50% retracement of Aug/Oct decline
RES 3: Y92.53 Failure high 21 Sept
RES 2: Y91.75 38.2% retracement of Aug/Oct decline
RES 1: Y91.33 High 16 Oct

CURRENT LEVEL: Y90.62

SUP 1: Y90.44 High 12 Oct
SUP 2: Y90.05/25 5, 21-day moving average & Kijun line
SUP 3: Y89.60 Tenkan line of Ichimoku cloud
SUP 4: Y88.01 Low 7 Oct


STERLING
Gapped from the NY closing level around $1.6355 to an opening low at $1.6281 as early Wellington traders marked the rate lower on the back of the weekend ITEM Club report suggesting sterling would hold close to parity with the euro for up to 4 years. Rate reversed off of the early lows into Tokyo trade with demand for sterling-yen lifting the rate to a high of $1.6371, the move filling the gap. Cable drifted lower again, the move down gaining momentum as market then reacted to reported comments from BOE Posen that he would support further QE extension. Cable dropped back to retest earlier lows before again picking up demand interest on the dip, the rate edging back to $1.6340/45. Fresh sales emerged into early Europe to correct it back to $1.6285, snapping back to $1.6320/25 before settling above the figure. Sterling's underlying positive recovery tone said to remain in place, with Barclays suggesting that the pound is vulnerable more to upside data surprises. Support seen at $1.6285/80, stops noted $1.6280/75. A break exposes $1.6255/50. Offers $1.6320/25, $1.6340/50, $1.6370/80.

Cable broke and closed over the 21-DMA for the first time since Sep 17 with the move supported by bullish daily studies and a bull-cross of the 5 & 21-DMAs. The move is now testing the top of the Bollinger band and is stalling around the 100-DMA of $1.6350, which may encourage further profit-taking. Initial support is the 5-DMA at $1.6180

RES 4: $1.6740 High 11 Sep
RES 3: $1.6532 61.8% retracement of $1.7041-$1.5708
RES 2: $1.6449/67 Resistance line from Aug 6, High 23 Sep
RES 1: $1.6415 Top of the daily Bollinger band

CURRENT LEVEL: $1.6308

SUP 1: $1.6117/34 High 8 Oct, Low 1 Sept, Spike high 30 Sep, Low 21 Sep
SUP 2: $1.6040 21-day moving average
SUP 3: $1.5708/21 Low 13 Oct, High Dec 2008 & 50.0% of $1.44 advance
SUP 4: $1.5660/88 Daily Bollinger band base, 38.2% of $1.3500 to $1.7041



OPTIONS AND MORE
FX Option expiries for today's 1400GMT cut,
* Euro-dollar; $1.4900, $1.4980, $1.5000
* Dollar-yen; Y90.20, Y90.00
* Euro-yen; Y131.45, Y131.30
* Cable; $1.6000
* Sterling-yen; Y140.50
* Aussie; $0.9100

In terms of European government bond issuance this week, it decreases dramatically compared to last week and is due from Ireland and Slovakia -- total E1.15bln vs E29.5bln last week. Slovakia is due auction the 4.50% May 2026 SLOVGB series 206 bond on Monday for E100-200mln. The Ireland National Treasury Management Agency (NTMA) is due sell between E750mln to E1.0 billion of the the 3.90% Mar 2012 IGB and 4.60% Apr 2016 IGB issues on Tuesday. However, supply is outweighed by reinvestment flows, with no redemption and coupon payments from Greece E1.0bln, Austria E0.5bln, Ireland E0.3bln -- to turn net cash flows positive to the tune of E0.7bln vs -E25.7bln last week.

Elsewhere, Japan's benchmark stock indices ended Monday's session mixed, rallying off the session lows in the afternoon session. The Nikkei 225 was lower by 21.05 points, or 0.21%, to stand at 10236.51 However, the broader-based TOPIX was 4.85 points higher at 905.80. Volume for the Nikkei constituents totalled a preliminary 1.274 bln shares, with 110 issues trading higher, 101 lower and 14 unchanged.

DAILY CALENDAR
The Eurozone finance ministers meet in Luxembourg today, although data is limited in Europe with just the 0900GMT release of EMU construction production.

Also at 0900GMT, Ifo head Hans-Werner Sinn talks to the press in Berlin, while at 0930GMT, ECB Governing Council member Ewald Nowotny is due to hold the opening address at a conference on Austria and Central Europe, in Vienna

At 1000GMT, the Bundesbank issues it's monthly report, while later on, at 1215GMT, Ifo head Hans-Werner Sinn is back on the wires, delivering a speech on "European strategies in answer to the economic crisis," in Berlin.

US data starts at 1330GMT with the weekly MNI Capital Goods Index, which is followed at 1430GMT by the weekly MNI Retail Trade Index.

At 1500GMT, Fed Chairman Ben Bernanke delivers a speech on Asia and the global crisis at the San Francisco Fed's Asia Economic Policy Conference in Santa Barbara. An audience Q&A session is expected to follow.

At 1620GMT, Kansas City Fed President Thomas Hoenig moderates a panel on economic growth and the institutional framework, along with ECB's Christian Noyer, and Argentina Central Bank Gov. Martin Redrado at a Bank of Mexico International conference in Mexico City.

US data continues at 1700GMT with the Oct Housing Market Index (NAHB). Later on, at 2030GMT, Fed Vice Chair Donald Kohn delivers brief remarks on competition and productivity and also moderates a panel at the Bank of Mexico International conference, while at 2150GMT at the same event, Bank of Spain Gov. Miguel Fernandez Ordonez appears on a panel on price stability.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - October 16

MORNING FX

BRIEFING
The dollar remained under pressure into Asian trade Thursday, though early rally in dollar-yen (due to Gotobi Day demand into the Tokyo fix being larger than normal) provided an early anomaly. Wednesday strong earnings report from JPM, followed by better than expected US retail sales helped to boost risk on trades/dollar sales in this session, with the later release of FOMC Minutes had little new info but showed that doves still outweigh hawks which will boost market perception that the Fed remains an expected laggard for rate hikes. Release of strong NZ CPI data provided the Kiwi with another boost, the move inturn prompting further movement into risk trades to the detriment of the dollar. Euro-dollar progressed higher, moving above $1.4950 to $1.4961 with rate retaining a firm feel into early Europe. Focus on $1.5000. Dollar-yen posted highs at Y89.66 into the fix before French name sales reversed the move to take it back to Y89.27. Cable extended to $1.6070 in Asia (Europe high now $1.6075). GS and Citi Q3 earnings today's highlight along with EZ and US inflation.

EURO
Euro-dollar opened in Asia around $1.4930 with risk on trades boosted by Wednesday's release of stronger than expected JPM Q3 earnings, US retail sales data, with FOMC Minutes continuing to suggest that the US will lag other major economies in hiking rates as doves appear to still outweigh hawks. Euro-dollar initially eased to mark session lows at $1.4920, as dollar-yen saw strong Gotobi Day demand into the Tokyo fix, but quick reversal after prompted renewed pressure on the dollar. Strong NZ CPI data, along with hawkish comments from RBA Stevens further boosted risk on trades, with commodity currencies again the main beneficiaries as they led the move against the dollar. Euro-dollar found the impetus to move above Wednesday highs at $1.4948 to take out suggested barriers at $1.4950, the move peaking in Asia at $1.4961. Further demand into early Europe has extended move to $1.4967. Offers are reported in place from around $1.4970, with further interest seen positioned ahead of option barriers at $1.5000. Support at $1.4920. GS and Citi Q3 earnings in focus, along with EZ and US inflation data.

Euro-dollar bulls remain focused on the recent bull-flag target, which nearly matches the $1.4968 level that capped topside of the pair in Nov 2007. The daily studies are still pointing higher and below historic levels of reversal, although trade is now pushing outside of the Bollinger band, which sends a warning against expecting rapid gains.



YEN
Dollar-yen closed the US session around Y89.45, with euro-yen holding gains within the Ichimoku Cloud at Y133.50. Traders noted model names buying the cross prior to the Tokyo open, lifting the rate through stops at Y133.75/85 en-route to the day's highs at Y133.91. Dollar-yen found larger than usual fixing demand thanks in part to Gotobi day, taking the pair up to Y89.67. A French name was the noted seller here, sending the rate back down to the day's lows at Y89.27 in quick time. Balance of the session was well contained as dollar-yen struggled to get back above Y89.50 and the cross held under earlier highs, pullbacks so far contained around the Y133.50 area. Stops said to be building above Y134.00 from system accounts, while techs note the top of the Ichimoku Cloud comes in at Y133.96 today, together with the 50% retrace of the August-October sell-off at Y133.90. Dollar-yen bids come in on approach to Y89.00, while offers are found at Y89.90/00 with stops at Y90.05.

Dollar-yen is attempting to break out of the first of it's broad falling ranges and tested the 21-DMA and Kijun lines to Y90.44. However, daily studies are failing to provide significant support to the recovery, keeping the overall downtrend in play. Meanwhile, the daily studies remain bullish in euro-yen as the cross tests major resistance levels at Y133.90/00, including the 100-DMA, top of the Ichimoku cloud and a 50% retracement of the post-August decline.



STERLING
Opened Asia around $1.6270, touched an early low of $1.6261 before recovering back, the upside gaining momentum on strong demand for sterling-yen from system funds, general yen sales seen into the Tokyo fix and triggered stops through stg0.9140/35 adding further weight. Cable moved above $1.6300, hitting a technical target level at $1.6350 (mentioned in bullets Thursday), with triggered stops through $1.6355 taking it on to $1.6401. Rate eased off highs, meeting renewed support at $1.6325 before recovering back to $1.6360/65. Early Europe took advantage of the late Asia recovery to take profit, easing the rate through earlier pullback lows to $1.6285. Rate currently trades around $1.6300. Support seen placed between $1.6285/80, stronger between $1.6260/50 ahead of $1.6210/00. Resistance seen at $1.6330, more toward $1.6350.

Cable was capped by the 21-DMA on Weds but this level is being broken at $1.6035 as daily studies point higher and momentum recovers the zero line. Close above 21-DMA would encourage bulls and be the first such close since Sep 17. Tuesday's high in euro-sterling matched that of March 27th and briefly popped over the Bollinger band top, which is currently at stg0.9395. The 21-DMA provides the main support, back at stg0.9180, although the previous highs should provide support ahead of there. Studies are neutral.




OPTIONS
Option expiries for today's 1400GMT cut,
* Euro-dollar; $1.4950, $1.4850, $1.4815
* Dollar-yen; Y91.00, Y90.70, Y91.30
* Cable; $1.6000
* Dollar-Canada; C$1.0400, C$1.0275

DAILY CALENDAR
The main European events for Friday start at 0800GMT when ECB Executive Board member Lorenzo Bini Smaghi delivers a speech, in Siena. This is followed by the EMU August trade balance at 0900GMT.

US data starts at 1300GMT with the Treasury International Capital System data, which is followed at 1315GMT by Industrial Production and Capacity Use data.

Industrial production is expected to rise 0.2% in September after posting stronger gains in the previous two months. Manufacturing production may decline this month due to a decline in auto sales.

Factory payrolls fell 51,000 in the month, with auto production jobs were down 4,000. The factory workweek slipped to 39.8 hours, while the ISM production index fell to 55.7. Capacity utilization is forecast to stay at 69.6%.

US data continues at 1355GMT, when The Reuters/University of Michigan Consumer Sentiment Index is expected to rise to a reading of 74.0 in early-October.

At 1400GMT, ECB Executive Board member Lorenzo Bini Smaghi delivers another speech, this time in Florence.

At 1415GMT, Dallas Fed President Richard Fisher delivers the keynote address at a conference co-sponsored by SMU's Cox School of Business in Dallas.

At 1530GMT, ECB Governing Council member Axel Weber delivers a speech, in Konstanz (Germany).

Late US data sees the 1800GMT Treasury Statement where the Treasury is expected to post a $31.0 billion deficit in September compared with the $45.7 billion surplus in September 2008. The full fiscal year deficit is much deeper than the previous year's level due to the fiscal stimulus packages and a dip in tax receipts.



Best Regards,

NordMarkets.com