EUR: Bond market volatility persists, with easing cycles nearing their end at higher levels than pre-COVID. The Fed may still have work to do, potentially weakening the dollar. Spillovers from U.S. repricing could challenge EM and carry trades near year-end. Despite a hawkish Fed cut expected, global developments (Canada, Bunds, RBA) have influenced recent rate moves, leading to dollar consolidation. No strong bias for the dollar; positions include SEK longs (watching 10.88/90), ZAR (below 17), PLN, and shorts in JPY (reducing near 157) and CAD (added yesterday). Euro remains under pressure, with no immediate urgency to engage.
GBP: Sterling aligns with bearish expectations amid weak retail signals and budget uncertainty. Political developments could add volatility, but no immediate positioning is needed. EUR/GBP resistance at 0.8750, support at 0.87125. GBP/USD resistance at 1.33645 and 1.3475/25, support at 1.3265/75.
JPY: Global fixed income repricing has pushed EUR/JPY and GBP/JPY to highs. A hawkish Fed cut is expected, but Powell’s tone may lean dovish. USD/JPY longs approached tactically, with plans to buy back post-Fed meeting. Key levels: 157.10/20 upside, 155.65/75 support. Ueda signals no imminent rise in Japan’s terminal rate.
CHF: Franc weakened, with EUR/CHF near 0.94. Bullish outlook remains, supported by European growth, but dips near 0.92 preferred for scaling into longs. Systematic accounts have sold CHF in 11 of the last 14 sessions.
AUD/NZD: RBA held rates at 3.6%, signaling a potential hike in 2026. AUD/USD remains resilient, supported by RBA’s hawkish stance. NZD performing well but hasn’t breached 0.5800 resistance. Systematic demand for AUD offset by HF supply; both modest buyers of NZD.
CAD: USDCAD found support near 1.3800 before rising in NY session. Focus on BOC meeting, with rates expected on hold. Cautious loonie outlook; USDCAD topside moves used to fund EM FX longs.
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Patrick has been involved in the financial markets for well over a decade as a self-educated professional trader and money manager. Flitting between the roles of market commentator, analyst and mentor, Patrick has improved the technical skills and psychological stance of literally hundreds of traders – coaching them to become savvy market operators!