US TSYS: Slightly Cheaper Ahead Of FOMC Meeting Messaging

The EUR/USD range Friday night was 1.1375-1.1411, Asia is currently trading around 1.1390. The pair’s momentum lower has slowed but the price action remains pretty telling. US yields remain under pressure keeping the US Dollar well supported for now. This break in the USD looks potentially significant to me in the short-term and should add to the Euro’s headwinds. I have been skewed in favour of fading this rally in the EUR, the price action has now turned decidedly bearish and I suspect rallies are now likely to continue to be sold into. On the day the first resistance is back toward 1.1400-1.1440 through here the 1.1500 area comes back into play. Looking for a test of the 1.1300-1.1350 area at some point, a sustained break below here and we could target a move back toward 1.0900-1.1000.            

• “The EU is considering “roadmaps” offering Ukraine, Montenegro, Moldova and Albania clear paths toward membership, Politico reported.” - BBG
• CFTC Data up to 22/09/26 shows the Leveraged community continuing to add back to their core shorts, -58 805(Last –51 355). Asset managers pared back their own core longs, +244 673(Last +275 565). 
• Options : Closest significant option expiries for NY cut, based on DTCC data: 1.1350(EU1.73b), 1.1400(EU4.04b), 1.1500(EU2.8b). Upcoming Close Strikes :  1.1400(EU3.95b Sept 29), 1.1425(EU1.66b Oct 1),1.1450(EU1.71b Sept 30) - BBG
• The EUR/USD Average True Range for the last 10 Trading days: 44 Points

Fig 1 : EUR CFTC Data

Source: MNI - Market News/Bloomberg Finance L.P

Fig 2 : EUR/USD Spot Weekly Chart

Source: MNI - Market News/Bloomberg Finance L.P

*CHINA CUTS TARIFFS ON $30B OF US GOODS, AGRICULTURE & COAL" - BBG

The People’s Bank of China signalled a greater focus on counter-cyclical adjustments, policy coordination, structural guidance and expectation management at its Q3 Monetary Policy Committee meeting, Yicai.com reported. The PBOC shifted its policy language to “increasing the intensity of counter-cyclical adjustments,” dropping a reference to “cross-cycle adjustment” used in the previous three quarters. The change suggests the central bank will give greater priority to stabilising near-term growth over medium- and long-term structural reforms amid persistent economic divergence and external shocks, the report said, citing CITIC Securities chief economist Ming Ming. The PBOC also placed greater emphasis on exchange-rate stability ahead of the traditional Q4 peak in corporate foreign-exchange settlements, Yicai said.