FX Flows

From the FXWW Chatroom: Usd is king, strengthening across the board when Asia kicked off. Euro takes out 1.0900 and USDCNH through the roof.

EurUsd has been sold since Tokyo open, initial sales were linked to EurJpy. Our traders witnessed good bids lined up in the main platform from 1.0913 and took some time for market to push this to 1.0896. Buying is probably linked to a large option expiry today at 1.0900. Next support is 1.0850 and 1.0825. Just a reminded, DBSR will review Portugal’s credit rating today.

UsdJpy printed 104.17 just before Tokyo opened. Seems that the buying coming from both Japanese as well as systematic funds. General talk of offers surrounding 104.40-50; I am also told stops through 104.55. But I suspect the real stops are above 104.75. Option wise, nothing much but be aware of a large 105.00 strike maturing on Monday New York cut.

Kiwi sold at the Tokyo open – I suspect someone bought the AudNzd cross up from 1.0615 to 1.0630. NzdUsd 100-Day SMA comes in at 0.7187; our guys are still short this pair – stop at 0.7265. Our macro guy has his stop above 0.7330.

Because of this AudNzd interest, AudUsd has been fairly supported throughout the session.

UsdCad edged up to 1.3250, our strategist Bipan cited minor technical resistance 1.3240-45 area as we head into Friday’s Canadian retail sales and CPI. Market is looking for +0.5% in retail sales from -0.1% M/M, we are calling for flat. We estimate that core CPI will increase by 1.9% versus consensus of 1.8%. Offers are light, nothing to be excited about unless we get to 1.33-handle where selling thickens. Buying should come in at 1.3175, the 200-Hour SMA and 1.3160, 200-Day SMA.

GbpUsd drifted lower orderly. I guess some option play into this strike 1.2245 maturing today New York cut.

Emerging Market
I wonder how much more pain on topside of USDCNH? It looks like those restructured CNH target redemptions were getting knocked out at almost every 25 pips all the way up, causing more pain and short covering of USDCNH. Next big one will be 6.8000 but small ones along the way.

The only Asian pair that is stuck is UsdMyr. Usd is bid but this pair is capped ahead of Budget 2017, to be released today.

UsdSgd move up slowly but surely; this pair is definitely tracking the EurUsd. Hearsay strong offers above 1.3975.

(CICB)
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