FOREX: Dollar Index Breaks to 5-Week Lows, GBPUSD Surges Over 1%
Dec-03 19:37
- Broad dollar weakness has been notably extended Wednesday, prompting the DXY to print fresh pullback lows below 99.00, reaching a five-week low at 98.83. This extends the two-week selloff to around 1.55%, with the index previously stalling at touted 100.48 resistance in November.
- Greenback weakness continues to be a reflection of a more dovish profile for the Fed under potential Kevin Hassett leadership and an associated more optimistic risk backdrop. Weaker-than-expected ADP jobs data from the US and a softer headline ISM services PMI work in favour of the short-term narrative playing out.
- The USD index looks set to post a significant technical close, with the first daily close below the 50-day exponential moving average since early October. This impulse is generating several bullish signals across the rest of the G10 basket, and continues to bolster the optimistic sentiment for EM FX.
- GBP is a notable outperformer, assisted by a set of stronger PMI data this morning. The 1.05% rally for cable today may have been assisted by positioning dynamics as pre-budget positioning is squeezed further. Spot has narrowed the gap substantially to 1.3368, a Fibonacci retracement. Above here, 1.3416 is the next notable resistance, the Oct 21 high.
- The significance of the break below the 50-day EMA in EURGBP at 0.8755 also stands out. The cross is now on course for a close below the late November lows and the lowest level since October 28th.
- Elsewhere, AUDUSD has now printed eight consecutive sessions of higher highs, keeping a bullish theme firmly intact, while it is worth reiterating that a primary driver of AUD strength is the continued pullback in front-end vols. Price action narrows the gap to the Oct 29 high at 0.6618, which is a key near-term resistance. In similar vein, NZD continues its post-RBNZ recovery, with today’s 0.7% gains edging spot closer to the medium-term pivot at 0.5800.
- Both EUR, JPY and CHF are slightly underperforming G10 peers and the adjustment of the DXY, however, EURUSD looks set to close above a key resistance of 1.1656, a strong reversal signal.
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US STOCKS: Late Equities Roundup: Tech Heavy Nasdaq Still Outperforms
Nov-03 19:35
- Stocks remain mixed late Monday, inside session ranges while the tech-heavy Nasdaq still outperforms. Currently, the DJIA trades down 243.74 points (-0.51%) at 47327.76, S&P E-Minis down 2.75 points (-0.04%) at 6873 Nasdaq up 98.6 points (0.4%) at 23829.47.
- Consumer Discretionary and Information Technology sector shares continued to lead advances in the second half, Amazon.com +4.58%, Tesla +2.07% and Wynn Resorts +4.82% led the former, while IT supported by: Western Digital +5.75%, Micron Technology +5.28%, Seagate Technology +4.55%, Palantir Technologies +3.28% and NVIDIA +3.22%.
- Conversely, a mix of Consumer Staples, Materials and Financials sector shares led declines in late trade:
- Kimberly-Clark -14.25%, Hershey Co -4.26%, Estee Lauder -2.66%, Colgate-Palmolive -2.19% and Kraft Heinz -2.16%.
- International Paper -4.58%, PPG Industries -2.58%, Albemarle -2.52%, Dow -2.45% and Eastman Chemical -2.15%
- Coinbase Global -4.07%, Arthur J Gallagher -2.25%, Fiserv -2.16%, Brown & Brown -2.06% and Erie Indemnity -1.99%
- Earnings expected after the close include: Qorvo Inc, Clorox, Navitas Semiconductor, Hims & Hers Health Inc, Palantir Technologies, Solaris Energy Infrastructer, Williams Cos, Vertex Pharmaceuticals and Comstock Resources.
USDJPY TECHS: Trend Needle Points North
Nov-03 19:30
- RES 4: 155.89 High Feb 3
- RES 3: 155.53 2.00% retracement of the Jan 10 - Apr 22 bear leg
- RES 2: 154.80 High Feb 12
- RES 1: 154.45 High Oct 30
- PRICE: 154.15 @ 16:27 GMT Nov 3
- SUP 1: 153.27 High Oct 10
- SUP 2: 151.83 20-day EMA
- SUP 3: 150.12 50-day EMA
- SUP 4: 149.05 Low Oct 6 and a gap high on the daily chart
Bullish conditions in USDJPY remain intact and the pair is holding on to last week’s gains. The break higher confirms a resumption of the uptrend and note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend.Sights are on 154.80, the Feb 12 high. First important support to watch lies at 151.83, the 20-day EMA. A pullback would be considered corrective.
OPTIONS: Active Session In Sonia Includes Bull Flattener
Nov-03 19:04
Monday's Europe rates/bond options flow included:
- 0RH6 97.87/97.75/97.68/97.56p condor, bought for 2.5 in 4k
- SFIX5 96.20/96.15ps, sold at 1.25 in 3k
- SFIZ5 96.35/96.45cs, bought for 1.25 in 2k
- SFIZ5 96.35/96.50cs vs 0NZ5 96.70/96.90cs, bought the mid for 4.25 in 10k
- SFIH6 96.60c vs SFIM6 96.70c, bough the June for 5 in 4k
- +5k 0NZ5 96.70/96.90 cs vs -5k SFIZ5 96.35/96.50 cs, pays 3.75 to Buy the 0NZ5 cs (bull flattener)
