Largely a day of consolidation, and with little to trade off the FX markets were a little more 2 way across the board. The US dollar Index is starting to creak a little, albeit at better levels, with Fed chair Yellen’s address at the end of last week perhaps not as hawkish as some were hoping.
The lower than forecast NY manufacturing index added to some of the turn-back in the USD, while the Sep industrial and manufacturing production stats also produced some soft results over all, with downward revisions seen in the previous month.
Despite the heavy losses seen in EUR/USD of late, there is no disputing the strong support to be expected from the mid 1.0900’s, and with USD/JPY looking a little extended (for now) through 104.00, some moderation was to be expected at some stage. One safe play is to maintain the downtrend in GBP, and EUR/GBP gains have proved relentless through the day, but recent highs around .9065-70 continue to cap.
Cable support is coming in ahead of 1.2100 for now, but even stronger support seen down ahead of 1.2000, with more players suggesting a near term recovery at the very least. Oversold levels are still being ignored, which points to a stronger short squeeze when it comes. Stocks are marginally soft, but not enough to impact on FX, with the cross rates seeing little change on the day.
AUD/USD continues to eye a move on .7650, but USD/CAD support below 1.3100 has been strengthened by the slip in oil prices. Tuesday promises to offer more, with the US and UK inflation reads preceded by the RBA minutes.