USDCAD (1.3086) • CAD is up 0.2% from Tuesday’s close, trading at the upper end of its October range ahead of the much-anticipated BoC policy decision, statement, and MPR forecast update at 10am ET followed by a press conference by Gov. Poloz and Sr. Dep. Gov. Wilkins at 11:15am ET. A policy hold (0.50%) is widely expected. We look to CAD weakness in response to the BoC events as we note the potential for a reiteration of the dovish language used in the September statement and look to a markdown in the growth forecast that will likely extend the closing of the output gap beyond the late 2017 time frame that had been anticipated in the July MPR. Markets are pricing in a neutral path for the BoC, leaving CAD vulnerable, and an intensified focus on financial vulnerabilities and the housing market will likely deliver additional CAD weakness via sentiment. We anticipate a widening in the U.S.-Canada 2Y yield spread and a reversal of the narrowing from early October. We remain bearish CAD with a year-end forecast of 0.75 (USDCAD 1.33).
USDCAD short-term technicals: bullish—USDCAD is under near-term pressure, softening toward Tuesday’s low in the mid-1.30s. We look to limited downside beyond the 50 day MA at 1.3070 (see middle chart) and would anticipate considerable support at 1.30. The broader, multi-month bullish trend remains intact, and we maintain a bias to medium-term gains toward the 1.33-1.35 area.
EURUSD (1.0979) • EURUSD retains a generally soft undertone. There was little data to focus on in the European session; Eurozone construction output fell -0.9% in August and growth slowed to just 0.9% (from 4.1%) in the year. EU Parliament President Schulz said the EU was facing a “real struggle” to remain together as Brexit weakened the union. We remain fundamentally bearish on the EUR and continue to near term risks as being geared towards a test of the 1.05 area. Movement may remain limited ahead of the ECB meeting Thursday.
EURUSD short-term technicals: negative—Loss of short-term support around 1.1005 yesterday prompted modest weakness in the EUR but not to the extent we expected. However, the EUR has struggled to recover through the 1.10 zone and intraday price signals look weak again at the outset of our session. We see strong resistance at the figure now and look for EUR losses to extend below 1.1075. Trend strength signals are aligning bearishly for the EUR across a range of timeframes, suggesting steady downside pressure on the EUR in the medium-term and limited scope for counter-trend corrections. Sell EUR rallies.
GBPUSD (1.2290) • UK labour market data was a little better than expected. Employment rose 106k in the last three months through August – reflecting a slowdown in the pace of hiring but suggests trends remain quite healthy considering Brexit worries. Weekly earnings rose modestly to 2.3% y/y in August, up from 2.2% (revised) in July. The GBP slipped on Bloomberg reporting that Germany would close down “back door” talks with the UK on Brexit, however, renewing concerns about “a hard Brexit” impact. Fundamentally, we think the GBP remains vulnerable and has yet to find a sustainable base.
GBPUSD short-term technicals: neutral/negative—Sterling is just about holding on to yesterday’s gains but is clearly struggling to extend this week’s rebound above 1.2325. The near-term trend in the GBP looks consolidative. The GBP sell-off has clearly lost momentum in the short-run but there is scant evidence of a stronger base of reversal developing. We still rather see current trends as a pause ahead of another push lower. Gains through 1.2325/50 might give speculators a chance to sell nearer 1.2450/1.25 but we are not hopeful that the GBP can really gain any more ground from here.
USDJPY (103.33) • JPY is outperforming along with gold, resolving its recent consolidation with an upside break on the back of a turn in the broader market tone. The outlook for relative central bank policy remains dominant in the absence of domestic data, and rumors are adding to JPY’s strengthening bias as market participants consider local media headlines hinting to the potential for a steady BoJ policy stance at the November 1 meeting. Measures of sentiment are stable, and options markets are pricing a modest premium for protection against JPY strength.
USDJPY short-term technicals: bearish—USDJPY has resolved its recent consolidation with a break below the 9 day MA (see bottom chart) and we look to further downside toward the 21 day MA in the mid-102s. Bullish momentum signals have softened to neutral, and DMI’s are confirming the shift in the balance of risk. Resistance is expected above 103.80.
EURUSD: Still heavy follow rejection from the 1.1026 high yesterday and see risk for retest of the 1.0964 low. Below this will expose the Jul/Jun lows at 1.0952 and 1.0913 to retest. Upside seen limited with resistance starting at the 1.1026 and 1.1058, lower highs.
USDCHF: Settling back from the .9915 high though upside stays in focus and clearance will shift focus to the .9950/56, Jul/May highs. However, divergence on intraday tools caution pullback with the .9856 support to watch as break will trigger a top pattern and see deeper pullback to .9829 and the 200-day MA at .9790.
USDJPY: Edged below the 104.00 level though the downside still limited with the narrowing suggesting scope for a breakout. Upside see resistance at the 104.32 and 104.64 highs and clearance will shift focus to the 105.00 level. Support is at 103.33/18 area then the 102.81 low of last week.
EURCHF: Pressure stays on the downside following rejection from 1.0895 high. Below the 1.0861 low and 1.0856 support will shift focus to the 1.0811 and 1.0790 lows. Upside seen limited and only lift over the 1.0910/00 resistance will fade downside pressure.
GBPUSD: Daily View little changed from this morning with intraday trade a touch firmer within broader consolidation and threatening 1.2325 resistance and break will expose 1.2376 ahead of 1.2472. On the downside, only break of lower support at 1.2090 to reverse focus towards the strong support at 1.1841.
EURGBP: Drop through the .9000 level and .8967 low of last week return focus to the downside and see the .8900 level now within reach. Below this will see deeper pullback to the .8850, prev high. Upside see resistance now at .8967 and the .9000 level ahead of the .9058/68 highs.
The following is paraphrased from Barclays:
ECB’s macroeconomic outlook is optimistic in our view: The ECB forecasts euro area growth of 1.6% over 2017-18 and inflation to average 1.6% in 2018. In December 2016, the ECB could release updated forecasts for 2017-19, including average 2019 inflation at 1.8%. We find these forecasts somewhat optimistic (more on this below). We also believe these forecasts are likely to factor in considerable monetary policy accommodation, including QE monthly purchases through 2018. In other words, the inflation dynamics are not yet self-sustaining without additional QE.
If the ECB’s macro scenario is correct, we would expect a time extension of QE with a reduction in the pace of monthly purchases: We expect the ECB in December to announce changes to the technical parameters and an extension of QE beyond March 2017, although we see a good chance that the new, reduced pace of monthly purchases is not announced until March 2017. We believe that in 2017, the ECB will choose to purchase less than EUR80bn per month, but it will need to manage communication carefully to explain that reducing the amount of monthly purchases while maintaining it for an undefined but long period is not tapering. Firmer QE forward guidance could help to address market perceptions of tapering.
How much will the ECB buy? To achieve the ECB’s baseline forecast of 2018 average growth and inflation both at 1.6%, our model-based simulation (using a BVAR framework) suggests that monthly purchases would need to average c. EUR45bn per month until end-2018. Importantly, and consistent with these estimates, the ECB could start with average monthly purchases of EUR70-60bn in 2017 and reduce purchases gradually towards c.EUR20bn per month. As a reference, our estimate for net EGBs issuance per month is c.EUR17bn in 2018. Meanwhile, the Eurosystem already signalled that it will re-invest principal of maturing bonds at least until 2020.
We expect QE technical parameters to be relaxed before year-end: To complete its EUR80bn of monthly purchases until March 2017, the ECB would need to relax some of its self-imposed QE constraints no later than December. Specifically, we think (from more to less likely): 1) the removal of the yield floor is very likely; 2) the issue share limit is likely to be relaxed for non-CAC bonds; 3) the issue and issuer share limit could be relaxed for AAA-rated countries; 4) purchases of bonds beyond a 30y duration is unlikely; and 5) the capital key is unlikely to be removed, even if it would allow temporary deviations from the rule.
What if growth and inflation worsen? Under our base-case forecast for GDP growth of 1.0% in 2017 and downside inflation risk, we think the ECB should keep EUR80bn asset purchases for another six months before possibly reducing purchases later in 2017. Instead, if growth and inflation expectations were to fall sharply, we think scaling up QE would not be enough (even if it would be a likely first step). In our view, the ECB could need to become more “inventive” and extend credit and quantitative easing to other asset classes, possibly including bank loans. More importantly, in such a scenario, fiscal policy would be required to work together with monetary policy. Elevated political risks and lack of euro area policy coordination are likely to remain a serious handicap to pro-growth non-monetary policies, in our view.
The following is paraphrased from Danske Bank:
EURUSD: Retains upside bias above the 1.1200 level following rebound from the 1.1138 low yesterday. However, the upside likely to remain limited with resistance at 1.1251 and 1.1279 and clearance here needed to see strength above the 1.1300 level. Ranging action seen for now with support at 1.1164 then 1.1123 low.
USDCHF: Failed to sustain break above the .9800 level with stab to .9829 high giving way to selling pressure. The downside see support now at .9755/50 area which must hold to sustain the upside focus. Clear break of the 200-day MA at the .9800 level will see scope for retest of the .9885 high.
USDJPY: Keeping just below the 103.00 level and lift over this will see scope to target 103.36 next. Clearance here will shift focus to the 104.32, Sep high though stretched intraday tools caution corrective pullback with support now at the 102.00 level then 101.84 high of last week.
EURCHF: Rally to clear the 1.0960 resistance clears the way for retest of the 1.0985 and the 1.1000 level. Beyond this will see strong resistance coming into play at 1.1014/24 area. The downside see support now at 1.0928 and 1.0900 level. Would take break of the latter to fade upside pressure.
GBPUSD: Bearish implication of broken 3-month triangle with negative stance seen on daily tools keeping intraday trade on a suppressed tone and eyes next support at 1.2690 then lower 1.2595, not forgetting the objective of this triangle, projected at 1.2290. Recovery from here to attract fresh sellers.
EURGBP: Rally above the .8800 level see strong resistance at the .8815, 2013 high. Clearance here see further extension to target .8831 and .8887 though stretched intraday tools caution pullback. The downside see support now at the .8725/00 area and .8672, gap area.
The following is paraphrased from ScotiaBank:
USDCAD (1.3215) • CAD is soft, trading at the lower end of its one week range and threatening a break through its 200 day MA. Near-term domestic risk is elevated as market participants await the release of international merchandise trade figures for August, with a tightened focus on non-resource exports following the impressive improvement seen in July. CAD’s drivers are moving in opposite directions, and the outlook for relative central bank policy appears to be dominating, despite the fresh highs in oil prices with WTI rallying toward $50/bbl (see bottom chart). The 2Y U.S.- Canada yield spread continues to widen (in a CAD-negative manner) to fresh highs above 25bpts at levels last seen in early June, climbing in response to the deterioration in expectations for the BoC amid signs of an increasingly confident Fed. Measures of sentiment hint to a continued rise in demand for protection against CAD weakness, with longer-term risk reversals moving beyond levels observed through the Brexit panic from late June. CAD appears vulnerable and may see considerable downside in the event of a turn in oil prices.
USDCAD short-term technicals: neutral-bullish—USDCAD is rising back toward Tuesday’s high at the upper end of its one week range, threatening a break through its 200 day MA (1.3217), a level of resistance that prevailed (on a closing basis) through the rally from late September. The broader trend is bullish with a series of higher lows and higher highs since May. We look to a sustained break of 1.32, 1.3250, and the late September high around 1.3280, toward the 1.33-1.35 range.
EURUSD (1.1216) • EUR is steady, consolidating around 1.12 following Tuesday’s impressive headline-driven knee-jerk response to rumors surrounding the outlook for ECB policy. Media reports have focused on policymakers’ discussions related to the ECB’s EUR80bn/month asset purchase program, with rumors of a shift towards a potential taper. Specifically, a 10bn pace of tapering has been floated, reducing the degree of accommodation at a rate similar to that observed at the Federal reserve. euro area sovereign bond markets have responded, sending yields higher across the curve for both core and peripheral countries. Spreads remain extended, in a EUR-negative manner with the 2Y Germany-U.S. spread holding steady around -150bpts. Lastly, we note that the most recent round of PMI’s has delivered a mixed picture for economic activity with a slight softening in the pace of expansion across the major economies.
EURUSD short-term technicals: neutral-bearish—Tuesday’s impressive EUR reversal lost momentum above 1.12 and its rally failed to deliver gains above Monday’s open. Momentum signals remain neutral and the ADX is trendless. We look to resistance above 1.1250 and anticipate a fresh attempt at a break below the longer term (50/100/200) MA’s clustered between 1.1165 and 1.1206.
GBPUSD (1.2718) • GBP is quiet, consolidating around Tuesday’s close following a drop to a fresh, marginal, multi-decade low under 1.27. Fundamentals and BoE commentary have delivered support, with an upside surprise to the services PMI (52.6 vs. 52.2 exp.) and confidence from BoE MPC member Broadbent in which he highlighted the stimulative influence of a weaker exchange rate and the U.K. economy’s resilience in the aftermath of the referendum. The 2Y U.K.-U.S. yield spread continues to widen, falling to fresh lows under -70bpts. Measures of sentiment are delivering added pressure as implied GBP volatility continues to climb across a range of time horizons, delivering a steady rise in the premium for protection against GBP weakness.
GBPUSD short-term technicals: bearish—momentum signals are bearish and the RSI is just above the oversold threshold at 30. DMI’s are providing confirmation and moving averages are bearishly aligned across a range of time horizons. The break of 1.27 has been short-lived, however we continue to look to weakness toward 1.25 and note the absence of major support ahead of 1.05.
USDJPY (103.13) • JPY is soft, down a modest 0.2% while underperforming most of the G10 currencies with a 7th consecutive session of decline vs. the USD. Domestic developments have been limited, with relative central bank policy driving the most recent move in JPY as market participants reassess the shifting Fed outlook in an environment of moderating risk aversion. Near-term risk lies with the U.S. ADP employment release and its impact on the Fed outlook and sentiment heading into Friday’s payrolls.
USDJPY short-term technicals: bullish—both the MACD and RSI have turned bullish in response to the impressive seven-session rally in USDJPY. The 50 day MA has been cleared and all eyes are on the 100 day MA at 103.75—a trend level that has not been breached since February 2nd. Near-term support is expected at 102.
The following is paraphrased from Danske Bank:
EURUSD: Backed off the 1.1279 high which stands just below the 1.1284 resistance and 1.1300 level. Break here will clear the way for retest of the 1.1327 and 1.1366 highs. Support now at 1.1221 and 1.1194 and only below the latter will see risk for deeper pullback to the 200-day MA at 1.1156 then 1.1123 low.
USDCHF: Staging rebound from the .9660/50 support though upside seen limited above the .9700 level. Would need lift over the .9743/62 resistance to revive upside focus and see strength to retest the 200-day MA then .9820 high. Break of the .9660/50 lows will trigger deeper pullback to .9632 then the .9600 level.
USDJPY: Held firm above the 100.00 level and bounce from the 100.09 low see scope for retest of the 101.00 level. However, the upside seen limited and only lift above the 101.24/54 resistance will fade downside pressure. Below the 100.00 level will expose the 99.54 and 99.02 lows to retest.
EURCHF: Held firm above the 1.0854 and bounce from 1.0856 low to regain the 1.0900 level see scope to tge 1.0921 resistance. Lift over this needed to see stronger recovery to 1.0960. Clearance here needed to expose the 1.0985 and 1.1001 highs to retest. While the latter caps, lower high sought to further pressure the downside later.
GBPUSD: Intraday trade a touch firmer with prices sustaining above the 1.2915 support and eyeing intraday hurdle at 1.3050 and break will expose stronger gain to 1.3120 daily resistance. Below 1.2915 support, bears back on footing and eyes 1.2866/50.
EURGBP: Failed to sustain rally to .8716 high which stands just below the .8725, Aug high. Long upper wick seen weighing and setback see the .8631/11 recent highs to watch. Would take break to trigger deeper pullback to the .8562/35 support. Break above the .8725 high will resume the underlying bull trend.
The following is paraphrased from ScotiaBank:
USDCAD (1.3231) • CAD is flat, having recovered from a headline-induced decline to a fresh multi-month low as market participants reacted to Gov. Poloz’s postspeech Q&A in which he hinted to a 3-5 year timeline for Canada’s economic restructuring in response to the oil price shock. The outlook for relative central bank policy remains dominant, as we note the continued deterioration in expectations for the BoC with OIS pricing in a nearly 35% chance of a 25bpt rate cut over the next 12 months. The U.S.-Canada 2Y spread appears set to widen in a CAD-negative manner to levels last seen in June. Oil prices may gain greater near-term prominence on the back of OPEC-related headlines, however domestic risks should remain in focus into Friday’s monthly GDP for July. Measures of implied CAD volatility are elevated across a range of time horizons, and risk reversals have responded accordingly—pricing a greater premium for protection against downside risk. Remain bearish.
USDCAD short-term technicals: bullish—USDCAD has broken to a fresh multimonth high with gains above the 1.3250 resistance area that had served as key resistance in late July and mid-September (see middle chart). The balance of risk is biased to further upside as both trend and momentum signals are bullish. We look to gains toward 1.33 and 1.35.
EURUSD (1.1237) • Spot remains tightly range bound. We continue to note two distinct negative for the EUR – wide, short-term Eurozone-US interest rate spreads (145bps at the 2Y sector of the curve) and the continued pressure on Eurozone bank shares – that could yet trip the EUR up (impact on Merkel government and broader political situation) and should certainly suggest limited upside potential for the EUR in the near-term at the very least. We think EURUSD is fundamentally vulnerable to the downside and expect firm resistance in the upper 1.12s.
EURUSD short-term technicals: neutral/negative—EURUSD is showing little sign of weakness or vulnerability on the charts. Intraday price action looks firm, in fact, even if the market remains resolutely range bound. The 1- and 6-hour chart patterns suggest firm demand on short-term dips to the 1.1240 high/low support zone. We note strong, long-term resistance overhead at 1.1275/80, however, and rather favour using short-term EUR rallies as a selling opportunity.
GBPUSD (1.2968) • GBP is quiet, consolidating around 1.2950 at the lower end of its multi-month range. The balance of risk is biased to further downside, and Brexit-related concerns may deliver fresh lows for GBP as we note the continued focus on the timing of the negotiations and triggering of Article 50. There are no major domestic releases scheduled ahead of Friday’s final Q2 GDP figures, however we note that (departing) BoE MPC member Shafik is set to speak to media on Wednesday. Considerations of relative central bank policy and a renewed focus on Fed-BoE divergence could deliver added pressure to GBP. Measures of implied GBP volatility are climbing, and risk reversals are building a greater premium for protection against GBP weakness.
GBPUSD short-term technicals: bearish—momentum signals are bearish, DMI’s are providing confirmation, and moving averages are bearishly aligned. We look to a break of the trend channel (see bottom chart) and recent support around 1.2920 with risk to the August 16 open at 1.2880 followed by 1.2850 and the July low around 1.28.
USDJPY (100.40) • JPY is quiet, consolidating in a tight range around Monday’s close with near-term risk limited to sentiment in the absence of domestic data. The release of BoJ minutes from the late July meeting provided for minor knee-jerk strength in JPY to a fresh one month high, however the move was completely negated by the subsequent response to the U.S. election debate as broadbased risk appetite delivered JPY weakness. Sentiment is likely to remain dominant ahead of retail sales and CPI later this week. We highlight the significant turn in short-term risk reversals, repricing a greater premium for protection against JPY strength (USDJPY weakness) with a full retracement of the shift from mid-August.
USDJPY short-term technicals: bearish—USDJPY has tested a fresh one month low and is consolidating in a tight range around 100.50. Momentum signals are bearish, DMI’s are providing confirmation, and moving averages are bearishly aligned across a range of time horizons. We look to the mid-August low around 99.50 followed by the June 24 low around 99.
The following is paraphrased from Danske Bank:
EURUSD: Higher in consolidation following bounce from the 1.1200 level on Fri. Resistance now at 1.1285 then the 1.1327 high. Long upper wick from the latter seen weighing and while the latter caps, risk is seen for eventual break of the 1.1200 level to see return to the 1.1139/23 lows.
USDCHF: Rejection from the .9790 high see pressure returning to the downside and clear break below the .9700 level will expose the .9650 low of last week to retest. Below the latter will return focus to the .9600 level then .9537 low. Upside seen well contained and only above the 200-day MA at .9810 will revive upside focus.
USDJPY: Backed off from the 103.00 level though dips see support at the 101.41 and 101.21 lows. The latter stands just above the 101.17/100.93 support and only break will weaken and expose the 100.00 level and 99.54 low to retest. Higher low sought for retest of the 103.00 level later.
EURCHF: Sharp pullback from the 1.0976 high keep the 1.1000 level out of reach and see risk for setback to pressure the 1.0888 low. Break of the latter will trigger deeper pullback to the 1.0869 and 1.0827 lows. Upside see resistance now at 1.0945 then the 1.0976 high.
GBPUSD: Bounce from the 1.3236 low keep recovery within the 4-wk channel from the 1.2866 low in play and see scope for return to the 1.3445 high. Clearance will see scope to target 1.3481 then the 1.35000 level. Only below 1.3236 and the 1.3200 level will weaken and see risk for deeper pullback.
EURGBP: Corrective bounce from the .8334 low of last week stalled at .8495 high and setback see pressure returning to .8422 support. Risk is seen for break to return focus to the .7334 low where break will extend the broader down-leg from the .8725, Aug high. Lower will shift focus to .8300 level then .8251, Jul low.
The following is paraphrased from ScotiaBank:
USDCAD (1.3101) • CAD is weak, down 0.5% and underperforming all of the G10 currencies in tandem with AUD in an environment of elevated risk aversion. The broader tone is dominant, oil prices are weakening, and yield spreads are widening in a CAD-negative manner, leaving CAD vulnerable to further decline. This week’s domestic risk events are limited to Wednesday’s public appearance from BoC Senior Deputy Governor Wilkins’, whose speech—titled ‘(S)low for Long and Financial Stability’—should expand on some of the key components of last week’s ‘tilt’ in tone. Relative policy divergence between an increasingly hawkish Fed and a tentatively dovish BoC should weigh on CAD. In terms of sentiment, we note the broad rise in measures of implied CAD volatility across a range of time horizons and the corresponding increase in the premium for protection against CAD weakness. Remain bearish.
USDCAD short-term technicals: bullish—USDCAD has cleared 1.31 on the back of its fourth consecutive session of gains, rallying toward the late August-early September highs around 1.3150 and the late July high around 1.3250. Momentum signals are modestly bullish, DMI’s are confirming the shift in the balance of risk, and short-term MA’s are bullishly aligned. Near-term support is expected between 1.3050 and 1.3020.
EURUSD (1.1232) • EUR is soft, retreating back toward 1.12 as it retraces last week’s U.S. data (non-mfg ISM) and ECB-driven rally. Fundamental releases have been limited, leaving the focus squarely centered on the broader market tone as markets digest a shifting outlook for Fed rate hikes. EUR’s greatest near-term risk lies with Fed BoG member Brainard’s speech at 1:15pm ET, her tone, and its impact on the outlook for relative central bank policy. Measures of implied EUR volatility are climbing across a range of time horizons and risk reversals suggest a rise in the premium for protection against EUR weakness. Remain bearish.
EURUSD short-term technicals: bearish—EUR is under pressure, retreating from last week’s short-lived high above 1.13. Thursday’s shooting star candle has been followed by two consecutive sessions of weakness, and EUR is testing near-term support around the 100 day MA at 1.1211. We look to further weakness through 1.12 toward the September 6 open around 1.1150 followed by the August 31 low around 1.1120. Near-term gains are likely to be limited above 1.1250.
GBPUSD (1.3289) • GBP is quiet, consolidating in a tight range around Friday’s close, its movement limited in the absence of domestic data and its relative performance underscoring its risk profile in periods of risk aversion. Domestic risk will remain elevated throughout the week as market participants look to Tuesday’s CPI, Wednesday’s employment, and Thursday’s retail sales data and BoE policy decision. A BoE hold on Thursday (0.25%) is widely expected and the tone will be key as policymakers interpret the shifting outlook following the most recent round of stronger-than-expected PMI’s. Lastly, note that MPC member Shafik is set to leave the BoE at the end of February 17. The departure was unexpected.
GBPUSD short-term technicals: bearish—GBP has made a fresh marginal low under 1.3250 and it continues to retreat from the recent high around 1.3450. GBP has broken through its 9 day MA (1.3290) and its clearing of the September 1 close (1.3268) leaves little support ahead of the September 1 open at 1.3138.
USDJPY (101.79) • JPY is outperforming all of the G10 currencies with a 0.6% gain, its strength driven by the broader market tone of risk aversion. Domestic releases have been mixed, the upside surprise to machine orders offset by weaker than expected PPI. JPY’s greatest near-term risk lies with the 1:15pm ET speech from Fed BoG member Brainard and its impact on the broader market tone. Continued risk aversion would be expected to provide added support to JPY (pressure USDJPY).
USDJPY short-term technicals: neutral-bearish—momentum signals are shifting and the RSI has dropped back below 50. USDJPY has broken 102 and appears set to decline toward its 21 day MA at 101.67. We look to further weakness toward 101.50 followed by 101.20.
The following is paraphrased from Danske Bank:
EURUSD: Rally to regain the 1.1200 level has seen strength to break the 1.1252 high of last week. Nearby see resistance at 1.1271 then the 1.1300 level. Beyond this will return focus to the 1.1341/66 highs. Support now at the 1.1200/1.1182 area protecting the 1.1140/23 lows.
USDCHF: Rejection from the .9800/20 area to break the .9739 support see follow-through of the broader decline from the .9885 high. Break of the .9700 level expose strong support at .9688 and .9632 next. Upside see resistance now at the .9739/72 recent lows.
USDJPY: Follow-through below the 102.00 level shift focus to the 101.17/100.93, recent highs. Stretched intraday tools see the latter holding firm for now though risk is seen for eventual break to return focus to the 100.00 level and 99.54 low. Resistance now at 102.40 and 102.80.
EURCHF: Pressure stays on the downside though the 1.0900 level still intact. Risk is seen for break to extend the drop from 1.1001 high of last week and target the 1.0869 support. Below the latter will see return to 1.0827 and 1.0790 lows. Resistance now at 1.0946/57 area.
GBPUSD: Intraday trade a touch softer in retreat but the strong rally last session is keeping the upmove from 1.3060 low in play and eyeing strong hurdle at 1.3481 and break needed to warrant further call on the upside. Only setback below 1.3372 support to ease upside pressure.
EURGBP: Staging recovery from the .8334 low though the upside still limited and regaining the .8400 level needed to ease downside pressure. Above the .8407 resistance will trigger corrective bounce towards the .8445 and .8485 resistance. Below .8334 low will see further decline to the .8300 level and .8251, Jul low.