GBPJPY Last Week

NordMarkets Morning FX - October 14

MORNING FX
BRIEFING
The dollar remained under pressure into Asian trade Weds with late earnings results from Intel and CSX boosting equities, in turn favouring risk on trades to the main benefit of commodity currencies. Kiwi gained an added boost from release of strong house sales data, following on from comments from the RBNZ that it will start removing some liquidity measures. Interest rate differentials remain in focus, the forecasts for the removal of liquidity measures the main driver with tonight's FOMC Minutes to draw attention as markets seek clarity on the Fed's current position on exit strategies. Euro-dollar seen reluctant to take advantage of this further dollar weakness, but reports of overnight 0200GMT fix demand said to have provided the added upside push, the rate extending recent gains to $1.4891. Cable remained firm, extending gains to $1.5982 following BOE Bean comments and euro-sterling fix sales Tuesday. Yen firm on Mid East demand and comments from a Dep FinMin suggesting no intervention. UK jobs data at 0830GMT, EMU IP at 0900GMT and US retail sales at 1230GMT the main data focus.

EURO
Euro-dollar opened Asia around $1.4850 with rate holding a basic early range of $1.4840/50 ($1.4839 session low) before nudging higher as strong sales of dollar-yen led the pressure on the dollar. Talk also suggested that a decent sized RHS euro-dollar fix order was to be done at the 0200GMT fix and provided added upside impetus, taking the rate through Tuesday highs at $1.4876 to $1.4885. Pullbacks found support ahead of $1.4870 ahead of the European open with rate able to extend session highs to $1.4891, early Europe taking it on to $1.4895. Traders note that $1.4900 holds strike interest, with stops above said to have been building and have become an early focus. A break above $1.4900 expected to initially meet profit take selling ahead of $1.4910, to counter some of the stops buys, but a clear to open move on toward $1.4950/60 ahead of $1.4980. Traders note that $1.5000 and $1.5100 one month strikes have been popular with spec and discretionary names. Support remains in place between $1.4875/70, a break to allow for a deeper move toward $1.4840.

RES 4: $1.5163 76.4% of $1.6039 to $1.2329
RES 3: $1.5020 2.0% moving average envelope
RES 2: $1.4968 Major high Nov 2007
RES 1: $1.4908 High Aug 22 2008

CURRENT LEVEL: $1.4885

SUP 1: $1.4800 5-day moving average
SUP 2: $1.4700 21-day moving average
SUP 3: $1.4530 Base of Bollinger band
SUP 4: $1.4480 Low 2 Oct


YEN
The BoJ left its overnight call rate target unchanged as expected, making no reference to corporate funding measures in its statement, despite speculation in the press that some support could have been withdrawn. The Bank upgraded its view on the Japanese economy, saying it is recovering and financial conditions are showing signs of improvement. Currency direction was driven by ongoing dollar weakness in the Asian session as the dollar-index hit fresh year-to-date lows. Early highs were hit at Y89.89 before Tokyo names sold the pair down, Mid-east names then adding weight as the rate triggered stops through Y89.50/40 down to initial lows at Y89.25. A comment from the Japanese deputy finmin about not intervening in the fx market just because of the yen's rise sparked fresh selling as dollar-yen tested bids into Y89.00. Slippage extended to Y88.83 late in the session, euro-yen following a similar path, shedding 125-points down to Y132.25, with both pairs remaining heavy into early Europe. Light bids seen at Y88.60/50, with a break set to expose last week's lows at Y88.01 ahead of barriers at Y88.00 and Y87.00.

RES 4: Y92.53 Failure high 21 Sept
RES 3: Y91.75 38.2% retracement of Aug/Oct decline
RES 2: Y90.44/50 High 12 Oct, Kijun line of the Ichimoku cloud
RES 1: Y90.10 21-day moving average

CURRENT LEVEL: Y89.13

SUP 1: Y89.10/20 5-DMA & Tenkan line of Ichimoku cloud
SUP 2: Y88.01 Low 7 Oct
SUP 3: Y87.43/51 Channel base from May 22, Trend line from Apr 1995
SUP 4: Y87.12 Major lows Dec/Jan


STERLING
Opened Asia around $1.5935 with early trade contained within a range of $1.5915/35 as it consolidated Tuesday's gains from intraday lows of $1.5708 (aided by BOE Bean's comments and the well reported large euro-sterling fix sell order). Rate extended lows to $1.5902 before rallying back, the move up seen as the dollar came under pressure with strong dollar-yen sales leading the move. Rate pushed through Tuesday's NY high at $1.5930 to $1.5945 before meeting resistance ahead of $1.5950. Rate dipped back to $1.5925/20 before picking up fresh demand which allowed rate to edge on to session highs at $1.5966, early Europe taking it on to $1.5995. Rate currently trades around $1.5990 with the $1.6000 level remaining in view. Traders note that a large buy of overnight $1.6000 strikes was seen in late trade Tuesday. Offers seen ahead of this level, extending to $1.6010, a break to open a move toward $1.6050/60 ahead of stronger interest at $1.6080. Support seen at $1.5950/40, stronger between $1.5925/20 ahead of $1.5900.

RES 4: $1.6330/45 Low 23 Sept, 100-day moving average
RES 3: $1.6224 50% retracement of $1.6740/$1.5708
RES 2: $1.6117/34 High 8 Oct, Low 1 Sept, Spike high 30 Sep, Low 21 Sept
RES 1: $1.6055 21-day moving average

CURRENT LEVEL: $1.5982

SUP 1: $1.5920 5-day moving average
SUP 2: $1.5708/21 Low 13 Oct, High Dec 2008 & 50.0% of $1.44 advance
SUP 3: $1.5660/88 Daily Bollinger band base, 38.2% of $1.3500 to $1.7041
SUP 4: $1.5519 Low 21 May



OPTIONS AND MORE
Option expiries for today's 1400GMT cut,

* Euro-dollar; $1.4900, $1.4860, $1.4850, $1.4800, $1.4985
* Dollar-yen; Y89.00, Y89.55, Y90.00, Y90.50
* Euro-yen; Y130.00
* Euro-sterling; stg0.9400
* Dollar-Canada; C$1.0250

Elsewhere, JJapan's benchmark stock indices ended Wednesday's session lower, pressured by the stronger yen, although off the session lows seen in the wake of the Bank of Japan's policy decision. The Bank of Japan's policy board, as widely expected, voted unanimously Wednesday to leave rates unchanged at 0.1%. The BOJ didn't mention whether it will let outright purchases of commercial paper and corporate bonds from banks expire on Dec. 31 as scheduled. The Nikkei 225 was lower by 16.35 points, or 0.16%, to stand at 10060.21. The broader-based TOPIX was 7.06 points lower at 894.34, as the financials weighed. Volume for the Nikkei constituents totalled a preliminary 1.431 bln shares, with 72 issues trading higher, 141 lower and 12 unchanged.

DAILY CALENDAR
Still to come from Japan, Bank of Japan Governor Masaaki Shirakawa holds a news conference at 0630GMT.

European data also starts at 0630GMT with the Bank of France Sep retail trade survey.

The UK releases labour market data at 0830GMT with the claimant count expected to come in at 25K.

Given that unemployment is a lagging indicator, the apparent recent slowing in the rate of increase appears to be coming far quicker than in previous economic cycles. Indeed, it is worth bearing in mind that the claimant count increased for thirty one successive months in the aftermath of the 1990's recession and the rate of increase did not slow to current levels until after two years. This would then suggest the unprecedented cut in interest rates as well as government intervention may have helped ameliorate the cull in jobs. Nonetheless, the substantial contraction in GDP growth in recent quarters looks set to leave unemployment not peaking until mid-2010, the latest time when the next general election can take place.

Core-European data sees EMU industrial output at 0900GMT, which is expected to come in at 1.2% m/m, -15.5% y/y.

Such an uptick in industrial output across the region for August would follow the rise in production over the month already reported for Germany (+1.7%), France (+1.8%) and Italy (+7.0%).

US data starts at 1100GMT with the weekly MBA Mortgage Application Index, while at 1230GMT retail sales and the export, import price index is due.

Retail sales are expected to fell 2.1% in September. Industry light vehicle sales plunged in the month after the August surge. In addition, gasoline prices fell slightly and should offset gains in other categories. Sales excluding motor vehicles and parts are expected to rise 0.3%.

At 1315GMT, ECB Executive Board member Lorenzo Bini Smaghi delivers a speech on "Monetary Policy and Asset Prices," in Freiburg, Germany.

US data continues at 1400GMT, when business inventories are expected to fall 0.9% in August. Factory inventories were already reported fell 0.8%, while wholesale inventories fell 1.3% in the month.

Later, at 1800GMT, the U.S. 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.

Finally, at 1830GMT, Fed Governor Daniel Tarullo and FDIC Chair Sheila Bair testify before the Senate Banking Committee on the state of the banking industry.



Best Regards,

NordMarkets.com

NordMarkets Morning FX - September 25

MORNING FX
BRIEFING
Risk positions continued to be pared back into early Asian trade Friday, the overnight jump in the VIX, along with disappointing US housing data, reported to have kept the pressure on. Negative close on Wall street rolled over into Asian equity markets providing the dollar and yen an added boost in early trade. Sterling remained under pressure, triggered stops through $1.6000, Y146.00 and above stg0.9160 provided the impetus to take cable to lows of $1.5917 after further stops were triggered below $1.5985. Japanese margin houses were noted strong sellers of sterling-yen through the move. Euro-dollar was supported early on by the demand for euro-sterling, but as the cross stalled so pressure dropped the rate down to lows of $1.4614 before meeting reported French demand between $1.4620/00, prompting suggestions of sovereign interest. Dollar-yen pushed down to early lows of Y90.56 but strong gamma related demand between Y90.50/00 continues to cushion. Equities back in positive territory ease risk pressure into early Europe, aided by G20 comments on stimulus withdrawal.

EURO
Strong demand for euro-sterling in early Asian trade tempered dollar demand pressure on euro-dollar with the rate managing to hold around $1.4660 in early trade before the cross rise faltered. Model and hedge fund sales then took over to take rate to an initial low of $1.4622, a brief recovery to $1.4664 soon met renewed sell interest that took rate to session lows of $1.4614. French demand interest cushioned the move, with bid interest said to extend to $1.4600, with recovery off this low strengthened after stops were triggered above $1.4670, the rate edging to $1.4700 ahead of the European open. Rate settled into a $1.4675/95 range into the early Europe, currently around $1.4682. Offers remain in place at $1.4700, more toward $1.4720 with stops placed above. Bids remain between $1.4620/00 with stops below (suggestion area holds sovereign interest and draws front running demand with stops placed under the figure). A break to open potential for a move down to $1.4515 with area between $1.4560/45 to provide interim support.

YEN
Dollar-yen moved back up to a Y91.59 high in the NY session Thursday, closing back around opening Asian levels at Y91.35, while euro-yen ended at Y133.85. Yen pairs made brief highs into the overnight session before sterling-yen weakness triggered a move lower as stops were hit on the break of Y146.00. Models were euro-yen sellers as CTA stops were taken out, this pair slipping from Y133.86 and making a show under the Ichimoku Cloud base at Y132.86 as dollar-yen dropped back under Y90.80. Subsequent bounces were shallow, euro-yen topping at Y133.20 as dollar-yen stalled back around Y91.00, fresh lows then notched at Y90.56 and Y132.52 later in the session. Euro-yen did manage to bounce back to Y133.40 from here, while dollar-yen has struggled to get back above Y90.80. Traders say dollar-yen continues to be pulled between Japanese corporate repatriation into fiscal half-year end, exporter offers, barrier options and importer bids. Japanese bids noted under Y90.50, ahead of reported large barrier interest at Y90.00 with stops below the latter level.

EURUSD - TECHNICALS
The euro is still looking corrective having almost reached its 100% projection of the Q4 2008 rally and Sept 2008 peak at $1.4851/62. Risk is seen to $1.4533/40, which is the 21-day moving average and the former resistance from June 3. Initial resistance is at $1.4712/27, where the latter is the 50.0% of fall from 1.4844 to $1.4616.

USDYEN - TECHNICALS
Dollar-yen downside risks persist and break below Y90.12/21 seen extending weakness weakness to a projected 6-month channel base, which is now valued at Y89.48. Key topside level remains at Y91.75 level, which was the major low seen in July and failure to close above here is seen leaving bears in control.

GBPUSD - TECHNICALS
Sterling bears remain firmly in control following recent break below channel base from June 8 and confirmation of "Gravestone doji" candlestick pattern yesterday with long black body. Risk is now seen to $1.5721 -- the Dec 2008 high and 50% of April to August rally.

DAILY CALENDAR
Friday sees the second day of the Pittsburgh G20 summit, with leaders laying out their communique, the details of which are already seeping into the public domain.

The European calendar kicks off at 0600GMT, with the release of the July construction orders data. At 0610GMT, the October GfK consumer sentiment index is out.

French data is expected at 0645GMT, when September consumer sentiment hits screens, followed at 0650GMT with the released of the detailed Q2 GDP data. This is followed at 0700GMT with the release of Spanish August PPI data.

The calendar continues at 0715GMT, when ECB Governing Council member Yves Mersch is slated to speak at the Capital Market Forum, in Luxembourg. Norges Bank Governor Svein Gjedrem gives speech, in Oslo, although no time is slated.

At 0800GMT, ECB Aug M3 data is released, along with Italian July retail sales data

UK August car production data is expected around 0800GMT.

The only other item on the UK calendar is Q2 Total Business Investment, due out at 0830GMT.

SNB Board member Thomas Jordan to speak at the Capital Market Forum, in Luxembourg AT 0900GMT.

The US calendar starts at 1230GMT, with the release o Aug durable goods orders. Durables new orders are expected to rise only 1.0% in August after the revised 5.1% surge in July. Boeing reported 32 aircraft orders in August, down from 44 in July.

The Reuters/University of Michigan Consumer Sentiment Index is due at 1355GMT and is expected to be unrevised at a reading of 70.2 in late-September

At 1430GMT, US August New Home Sales data is released. New home sales are expected to rise to a 445,000 annual rate in August after the 9.6% jump in July. As with existing home sales, new home sales have shown indications of improvement in recent months, although the latest existing home sales were a surprise on the downside.



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.



Best Regards,

NordMarkets.com