FX Talk

From the FXWW Chatroom – EUR:. My main hope is that we do not get a no hike and neutral message that leaves us little wiser and produces a continuation of the choppy and largely directionless markets that have been the recent norm. Just as likely is that after endless analysis of various permutations is that an unconsidered permutation with a new component is delivered. Support 1.1215, 1.1100 and 1.1015 with resistance at 1.1375  and 1.1550. 

JPY: We stand by the view that any sell off in USDJPY could be eclipsed by the potential for a rally – partly attributable to the order book cleanse down towards 116 seen a few Monday’s ago, but also as hype around the BOJ begins to build. Support on the session will be found 119.40 and 118.50/80 – resistance 121.20/30 ahead of 121.80 and the 55/100 DMAs (122.47/41).

GBP: Tricky 24 hours to navigate and we look to be reactive with bias to play Sterling higher (on crosses) as a second derivative of a more hawkish Fed. Levels: support in Cable 1.5460/77 resistance 1.5519 (On close). EURGBP 0.7240 – 0.7316. 

AUD/NZD: If Yellen does begin to push expectations into 2016, buying the commodity currencies actually makes a good deal of sense given how much they lagged the moves in commodities and AUD still has positioning to go. Levels: Aussie: 0.7250 resistance with 0.7085 support. Kiwi: resistance 0.6390 with 0.6510/20, support at 0.6294 and 0.6244.

CAD: While there is remaining USDCAD length, the market feels light across G10, and no doubt would buy dollars on a hike. In the event of a lack of clarity from Yellen, FX seems likely to take its cue from equities to see how risk will trade, though we will also be watching rates. Levels: below 1.3160/55, 1.3113 and 1.13000 as support, 1.3310 and 1.3353 as resistance. 

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