From the FXWW Chatroom – EUR-USD The EUR may remain in a position to resist a firmer dollar atthis juncture with investors seemingly unconvinced about a more hawkish
Fed even in the wake of the latest NFP numbers. To this end, net leveraged
EUR shorts on the CFTC front were pared slightly in the latest week. The 55-
day MA (1.0835) may cushion while 1.0960 to 1.1000 may cap in the nearterm.
USD-JPY It’s a TKY holiday today but risk aversion jitters may
continue to apply downside bias on the pair. On the CFTC front, note that net
leveraged JPY shorts were reduced significantly in the latest week. Over the
medium term, if the pair manages to persist below the 120.00 handle,
the technical uptrend for USD-JPY established since late 2012 we think
will have been neutralized.
AUD-USD Negative vibes from the risk appetite front (ZAR for e.g.) are
expected to keep the AUD-USD under downward pressure despite slightly
oversold conditions. Expect a 0.6900-0.7030 range pending further headline risks (Dec labor market numbers due on Thu). On the CFTC front, net
leveraged AUD shorts were cut slightly in the latest week but overall
positioning we think is neutral, given the almost insignificant levels of shorts.
Note that the 0.6900 floor may prove pivotal, given that this floor has
not been broken since early September 2015.
GBP-USD Where we think the USD may continue to gain traction is
with regards to the GBP. The pair continued to decay in the wake of the US
NFP on Friday. Expect all eyes on the BOE MPC this week on Thursday,
where any “disappointment” may further endanger the pound. On the CFTC
front, note that net leverage GBP shorts were further accumulated in the
latest week. In our view, the 1.4500 support may be a watershed of sorts,
given that this neighborhood has not been visited since 2010.