FOREX: USD Index Lower Again, But Lack of Data Could Contain Vol
Oct-02 09:32
- Into the second day of a US government shutdown, and the USD is weaker again, pressuring the USD Index to trade lower for a fifth consecutive session. Yesterday's 97.462 low is in tact for now, largely as USD/JPY is yet to make another convincing move lower, after yesterday's downside bias has failed to spill over into Thursday trade. That said, support into 146.59 is well within reach, but the lack of US data may contain intraday vol in the interim, and prevent any furher breakout here.
- Global equities trade well, helping underpin a climb for EURUSD to 1.1757. $6.86bn of option notional expire today between 1.1695/1.1800 - these sizeable strikes could further contain spot into the NY cut. The trend condition in the pair is bullish, and a clear resumption of gains would open 1.1923, a Fibonacci projection. Support to watch lies at 1.1686. the 50-day EMA.
- NZD outperforms in a partial reversal of recent AUDNZD price action. Profit taking may be at play as the AU-NZ 2yr swap spread holds firm, just off recent highs. This has been the strong driver of the cross, evident in the EMAs pointing north, with key resistance and the 2022 high standing at 1.1491. The 20-day EMA meanwhile sits at 1.1259.
- With a lack of US data, central bank speakers are in focus. Today sees ECB's Makhlouf, Kazaks, Villeroy & de Guindos as well as Fed's Logan & Goolsbee.
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GERMAN AUCTION RESULTS: 1.90% Sep-27 Schatz
Sep-02 09:32
| 1.90% Sep-27 Schatz | Previous | |
| ISIN | DE000BU22106 | |
| Total sold | E4.5bln | E5bln |
| Allotted | E3.552bln | E3.916bln |
| Avg yield | 1.96% | 1.90% |
| Bid-to-offer | 1.60x | 1.97x |
| Bid-to-cover | 2.03x | 2.51x |
| Avg Price | 99.867 | 99.995 |
| Low Price | 99.865 | 99.995 |
| Pre-auction mid | 99.862 | 99.983 |
| Previous date | 05-Aug-25 |
FOREX: EURUSD Slides Back Below 1.1630, Relative Resilience in the Crosses
Sep-02 09:31
- Amid the broader dollar demand on Tuesday, EURUSD has extended its decline through last Friday’s close to print fresh session lows of 1.1624 in recent trade. Spot remains shy of the recent lows at 1.1574, however, traders will focus once again on a potential daily close below the 50-day EMA. The average now intersects at 1.1611.
- Given the bullish trend conditions and ongoing narrative surrounding further EURUSD strength into Q4, there remains a high risk that positioning dynamics could exacerbate the selloff, however for now the acute risks for other nations is providing some relative resilience for EUR crosses today.
- This is highlighted by the 0.45% appreciation for EURGBP, which has tested the 0.8700 mark once more. Today’s price action has resulted in a breach of resistance at 0.8674, the Aug 25 and 29 high. The break signals a stronger reversal and suggests scope for climb towards 0.8744, the Aug 7 high. Key resistance and the bull trigger is at 0.8769, the Jul 28 high. A break of this level would place the cross at the highest level since May 2023.
- For EURJPY, moving average studies are in a bull-mode position highlighting a primary uptrend. Key resistance to watch is the Jul 28 high of 173.97. Clearance of this level would confirm a continuation of the bull cycle.
EURUSD TECHS: Corrective Pullback
Sep-02 09:29
- RES 4: 1.1851 High Sep 10 2021
- RES 3: 1.1829 High Jul 01 and the bull trigger
- RES 2: 1.1789 High Jul 24
- RES 1: 1.1743 High Aug 22
- PRICE: 1.1627 @ 10:28 BST Sep 2
- SUP 1: 1.1574/1.1528 Low Aug 27 / Low Aug 5
- SUP 2: 1.1392 Low Aug 1 and bear trigger
- SUP 3: 1.1373 Low Jun 10
- SUP 4: 1.1313 Low May 30
Despite today’s sell-off in EURUSD, the trend set-up remains bullish and weakness is considered corrective. Note that the pair has recently pierced key support around the 50-day EMA, currently at 1.1611. A clear break of the average would signal scope for a deeper retracement and potentially expose key medium-term support at 1.1392, Aug 1 low. Key resistance and the bull trigger is 1.1829, Jul 1 high. A breach would resume the primary uptrend.
