UBS Spot Desk Commentary

EURUSD remains in the 1.0800-1.1200 range, though it has traded bid since the yuan devaluation. The pair tested the topside yesterday, but is now almost 100 pips lower. Stay flexible and trade the intraday moves. Support at 1.1115, 1.1090, and 1.1065; resistance at 1.1150, 1.1190, and 1.1215.
USDJPY: Bonds and equities finally caught up with the pair yesterday, resulting in the largest fall in more than a month. It is holding around the August low at 123.80, and with the market calming down in China, we think USDJPY is a buy on dips close to 124, with a stop below 123.50. First resistance on the topside is 124.70, ahead of 125.30.
USDCHF: Both the pair and cross traded heavily late yesterday, to 0.9680 and 1.0840 respectively, but found good support at these levels. The rally in Asia today seems to offer a good opportunity to sell USDCHF towards the resistance at 0.9770/90, but trading may once again be volatile today. Support at 0.9720 and 0.9680; resistance at 0.9790 and 0.9840. EURCHF was volatile yesterday and touched a high of 1.09645. The cross then traded lower, driven by USDCHF selling. EURCHF rallies above 1.09 should be faded, and only a move above the psychological 1.10 level in the cross would be reason to reconsider. Support at 1.0840 and 1.0810; resistance at 1.0920 and 1.0965.
Cable: The sterling dropped on weaker earnings data yesterday, but Cable recovered quickly with broad US dollar weakness. The pair traded to the lower end of the range at 1.5535 in a very sharp move following the weaker earnings numbers and unchanged UK unemployment data. Cable is now trading firmly above 1.5600 again. Support at 1.5560, 1.5535, and 1.5459; resistance at 1.5661 and 1.5691. EURGBP traded toward 0.7165 on the move lower for Cable yesterday, and faded those levels again. The cross later tested the topside in the afternoon and topped out at 0.7170. No UK data is scheduled today so the sterling should more or less stay put and follow the movements of its peers.

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