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AUD/USD continues to push lower over the past weeks. Hourly resistance is given at 0.7883 (27/05/2017 high). The pair is approaching support at 0.7786 (18/07/2017 low). Expected to show continued consolidation.

In the long-term, the trend is turning positive. Key supports stands at 0.6009 (31/10/2008 low) . A break of the key resistance at 0.8164 (14/05/2015 high) is needed to invalidate our long-term bearish view.

USD/CAD continues to move higher within uptrend channel. Strong support is located at a distance 1.2062 (08/09/2017 low). Hourly support lies at 1.2331 (26/09/2017 high). Resistance is given at 1.2663 (31/08/2017 high). Expected to show continued short-term bullish pressures.

In the longer term, the pair has broken longterm support that can be found at 1.2461 (16/03/2015 low). Strong resistance is given at 1.4690 (22/01/2016 high). The pair is likely to head further lower.

USD/CHF is trading higher within short-term uptrend channel. Yet, demand has been increasing since September. Closest resistance is given at 0.9808 (30/05/2017 high). There are nonetheless decent downside risks. Strong support is given at 0.9421 (03/05/2017). Expected to show bullish pressures.

In the long-term, the pair is still trading in range since 2011 despite some turmoil when the SNB unpegged the CHF. Key support can be found 0.8986 (30/01/2015 low). The technical structure favours nonetheless a long term bullish bias since the unpeg in January 2015.

USD/JPY is going to monitor for the fourth time resistance given at 113.26 (27/09/2017 low). Strong support is located at a distance at 111.12 (20/09/2017 low). The pair is trading in a range. Downside risks are rising as markets may soon take some short-term profit.

We favor a long-term bearish bias. Support is now given at 99.02 (10/08/2013 low). A gradual rise towards the major resistance at 125.86 (05/06/2015 high) seems unlikely. Expected to decline further support at 93.79 (13/06/2013 low).

GBP/USD is pushing lower since the pair has topped 1.3657 (20/09/2017 high). The pair has sharply broken support given at 1.3155 (14/09/2017 low). Expected to show continued bearish pressures within downtrend channel. Wide-open for further decrease.

The long-term technical pattern is reversing. The Brexit vote had paved the way for further decline. Long-term support can be found at 1.1841 (07/10/2017 low). Long-term resistance given around 1.35 is at stake and indicates a long-term reversal in the negative trend. Yet, it is very unlikely at the moment.

EUR/USD is way into a bearish trend. Hourly resistance can be found at 1.1833 (29/09/2017 high). Strong support is given at a distance at 1.1662 (17/08/2017 low). Expected to show continued short-term bearish pressures.

In the longer term, the momentum is now turning largely positive. We favour a continued bullish bias. Key resistance is holding at 1.2252 (25/12/2014 high) while strong support lies at 1.0341 (03/01/2017 low).

The Aussie stands in red on Friday and establishes below daily cloud base which was eventually taken out on Thursday’s strong fall.

Fresh bearish extension on Friday broke below rising 100SMA (0.7782) and approached target at 0.7733 (FE 200% of current wave C from 0.8102, 20 Sep high).

Bears may travel to 0.7663 (200SMA / FE 238.2%) on stronger acceleration if US jobs data beat forecasts.

Broken base of thick daily cloud mark initial and solid resistance at 0.7800, followed by falling 10SMA at 0.7843, which tracks the downtrend in past two weeks.

Res: 0.7779, 0.7800, 0.7843, 0.7865
Sup: 0.7733, 0.7700, 0.7663, 0.7620

Bulls are retaking control and probe again above 113.00 as dollar is regaining momentum.

Double downside rejection at 112.30 zone, where rising 10SMA contained dips, left two long-tailed daily candles, signaling that the downside is protected for now.

Broader bulls are looking for continuation signal which requires sustained break above 113.25 pivots (recent tops posted after multiple upside rejection) to open way towards targets at 114.00 (round-figure) and 114.49 (11 July peak).

Firm bullish setup of daily techs is supportive, but the pair is likely to stay within near-term congestion until release of US jobs data which are expected to generate stronger signal.

Rising 10SMA (currently at 112.58) marks initial support, followed by daily Tenkan-sen at 112.37, loss of which would weaken near-term structure.

Res: 113.25, 113.57, 114.00, 114.49
Sup: 112.75, 112.58, 112.37, 111.92

Switzerland’s foreign exchange reserves edged higher for a third successive month in September, despite a clear period of respite for Thomas Jordan and his team. The Swiss National Bank’s stock of foreign currency increased Sfr7.5bn from Sfr716.9bn to Sfr724.4bn, printing a new all-time high. Since the beginning of the year, the FX stockpile rose almost Sfr80bn as the SNB has continued to buy foreign currency, mostly EUR and USD, with the aim of protecting the Swiss franc against further strength.

However, the SNB has had a nice summer and was able to cut down significantly the pace and size of its interventions in the FX market. Indeed, the Swiss franc lost ground against most of its peers during the summer months. Since June, it fell against across the board, losing the most against the Canadian dollar (-8.25%), the Swedish Krone (-7.5%) but most importantly against the euro (-5.20%) and the greenback (-0.90%). Therefore, the sustained rise in FX reserve is not the result of a pick-up in SNB’s activity in the FX market, but rather the result of the appreciation of the SNB’s holding when valued in CHF. The stabilisation of the sight deposits held at the SNB supports this idea: since early June total sight deposits stabilised at around Sfr578bn.

The Swiss central bank will continue to sit back and relax, especially now that inflation is slowly picking up. The pressure on the SNB’s shoulders is finally easing a little as the EUR/CHF pair is trading around 1.15. However, a crisis could pop up at any time and the Catalan situation suggests that the European Union is not out of the wood yet, especially regarding the desire for independence of certain of its members.

In case you were hiding under a rock (which might make sense given increasing volatility) today is September US payrolls. Markets are pricing in a solid impact of negative weather with expectations for NFP on the low 60/80k and unemployment 4.5% (risk skewed to the downside). Traders should expect a FX volatility inducing read. However, recent payroll data has provided an asymmetrical outcome with weakness shrugged off but better than expected reads triggering sustained USD rallies.

The expected soft NFP reports contradicts some data seen after hurricane Katrina which lead to upside surprise in many economic indicators. We remain bullish on the USD given the general risk in risk (Specifically Catalonia independence referendum). US front-end yields continued to rise with 2-yr rates hitting 1.50%. The market is underpricing the fed commitments to normalizations, instead focusing on disappoint inflation read. In our view Yellen will continue tighten path, resulting in a December 20bp hike, in anticipation that inflation will eventually pick up. Despite the solid fundamentals story support EM countries we, are cautiously short key high beta and interest rate sensitive countries. HUF, ZAR, BRL, JPY and CHF stand out as key shorts in the current environment.

Volatility in GBP jumps

For this old time analyst its nice to see that fundamentals still can drive volatility. Falling letters, cough, and fake P45 form, not only weighted on UK PM May but sent GBPUSD 1 month implied volatility higher at 8.66 and GBPUSD down 2% (4% since the Conservative party conference). PM May now face open rebellion among backbenchers as up to 30 MP are reported have called for her resignations. Senior Conservative have rallied around the PM making the outcome uncertain. The political chaos makes the outlook for Bexit negotiations re-opening next week bleak.

EU negotiations are questioning the authority of the UK governments, already looking ahead, and limiting the prospect of a deal. Should EU-EU fail to make meaningfully headway, the UK economy is likely to suffer as business investments is further delayed. Given the prolonged negative outlook for the current situations (PM May need to secure her positing so markets can move forward), we are bearish GBP. We anticipated a bearish extension of current downtrend to 1.2830 based support.