From the FXWW Chatroom: The Usd continued to strengthen into Asia. Euro took out 1.0500 and UsdJpy rose to 117.85. USDCNH shot up to 6.9512.
Macro names were better sellers of EurUsd this morning and decent volume as well. Asia erased overnight session’s low 1.0468. Our traders said they see bids scattered all the way down. I am told there is an option barrier at 1.0450 and larger at 1.0400. Be aware there is a 1.0500 option expiry today New York cut with notional of Eur3.8bn. There is same strike maturing Friday worth Eur2.4bn. EurUsd bounced back to 1.0500, where we then witnessed short squeeze to 1.0520.We witnessed good two-way business in UsdJpy and EurJpy this morning; systematic accounts were better buyers while some selling out of Tokyo. There was one particular US bank being a better seller of EurJpy. UsdJpy peaked 117.85 then backed off to mid-117’s. Our colleague in Tokyo Haru said the Japanese were so bearish yesterday but now they flipped around, targeting 120. The lifers have acquired most of their Usd past week and exporters’ selling expected to thin down. However, Japanese investors are very cautious over US equities and sudden verbal intervention from Trump.Australian jobs report was strong and Aussie advanced against the Kiwi. I heard there are some speculators trying to add to shorts towards 1.0465. AudUsd, on the other hand, was mired by post-FOMC. Bids uncovered in the 0.7390’s. Usd pared gains across G10 caused AudUsd up at 0.7420’s.
UsdCad advanced to 1.3324. To be honest, not great deal of volume. Sam said reason we posted high was on back of Tokyo fixing. Oil futures has stable but the bounce in Aussie had the UsdCad backing off to 1.3280’s. Important levels on top, the 50-Day SMA at 1.3336. There is a FX option strike at 1.3350 expires tomorrow notional $1bn.
It was more EurGbp rather than GbpUsd. The cross fell sharply from 0.8384 when EurUsd broke 1.0500. Talk in the streets option play locking this cross to 0.8350-0.8450.
Buying USDs. USDJPY is our biggest buy, with our target of 130 looking less ambitious by the day. EURUSD should break the March-15 1.0463 low, heading towards parity. AUDUSD is one of our favoured shorts. With the equity market looking increasingly overstretched as real yields go up, USDKRW is set to break higher.
(MS)
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