Main market themes
- Geopolitical uncertainties returned to the fore overnight, as the Trump administration announced sanctions on three senior Turkish officials and will raise steel tariffs back up to 50% as well as stop trade negotiations, while calling on Turkey to implement an immediate ceasefire on Syria. On the US-China trade front, market doubts started to emerge after US Treasury Secretary Mnuchin warned additional tariffs would be imposed if a deal with China falls apart, while China said it wants further talks this month to hammer out the details before inking the deal.
- A Telegraph report on the Brexit deal taking shape lifted the GBP briefly.Liquidity remains poor and volatility high in GBP, with a fast and positive move this morning after EU Chief negotiator Barnier suggested a deal can still be reached by the end of this week. As such, while data should start to become more important in the weeks ahead, Brexit headlines will dominate price action for now.
- Bank of Japan Governor Kuroda who was speaking at a BOJ Branch managers’ meeting this morning, repeated the pledge of further easing if risks grow that momentum towards achieving the 2% price target is lost. But markets saw nothing new from Kuroda and that left yen virtually changed.
- Market players are also waiting for further cues from the US’ 3Q earnings season starting with JPMorgan Chase, Goldman Sachs, Citigroup and Wells Fargo today.
- Today’s economic data calendar comprises of the UK’s jobless claims and ILO unemployment rate, EZ/German ZEW survey and Indian trade data. Speakers include Fed’s Bullard, George and Daly, and BOE’s Carney and Vlieghe
Today’s Options Expiries for 10AM New York Cut
- EURUSD: 1.0950-55(660mln), 1.1015-20(1.07bln), 1.1100(532mln), 1.1200(646mln)
- USDJPY: 106.50(579mln), 107.00-10(2.1bln), 107.40-50(589mln), 107.75-85(636mln), 108.00-20(1.62bln), 109.00-10(962mln), 110.00(824mln)
- GBPUSD: 1.2200(713mln), 1.2600(1.0bln)
- AUDUSD: 0.6800(624mln), 0.6880-00(812mln)
EURUSD (Intraday bias: Bullish above 1.10 targeting 1.11)
From a technical and trading perspective 1.1045 target achieved. As 1.10 prior resistance now acts as support look for consolidation to form a platform for bulls to make a run at 1.11 over the coming sessions. Only a failure below 1.0960 would concern the bullish bias.
GBPUSD (Intraday bias: Bullish above 1.25 targeting 1.28)
From a technical and trading perspective as 1.25 now acts as support look for bullish reversal patterns on on intraday basis to set long positions targeting an equidistant swing objective at 1.28, on the day only below1.2450 would concern the bullish bias.
USDJPY (intraday bias: Bullish above 107.80 targeting 109)
From a technical and trading perspective as 107.85 now acts as support look for a move through last weeks highs enroute to test offers and stops above 109 on the day only a move through 107.40 would concern the bullish bias.
AUDUSD (Intraday bias:Neutral bullish above .6780 bearish below .6730)
From a technical and trading perspective .6800 upside objective achieved,a failure below .6750 would concern the bullish bias and suggest a false break and a return to the range of .6700-.6800, a move back through .6810 is needed to keep upside momentum and set sights on offers and stops above .6865
Please note that this material is provided for informational purposes only and should not be considered as investment advice. The views discussed in the above article are those of our analysts and are not shared by Tickmill. Trading in the financial markets is very risky.