Bank Recommendations

Deutsche Bank

EUR USD (1.3330) From an analytical perspective, yesterday’s session was a neutral one: the euro climbed a little on initial weak US data, fell back a little on a stronger ISM and then closed practically unchanged on the day. But this oscillation, which all took place within a half-percent range, probably had some impact on the beliefs of short-term traders. The solid non-manufacturing survey raised the issue that perhaps markets had been over-focussing on narrow sectors of the US economy that just happened to be doing poorly, namely certain types of manufacturing activity and housing. As a result, dollar bears could have been missing the bigger picture. A second factor was related to the price development itself. Daytraders noticed that the single-currency struggled to recapture its most recent peak. Indeed, this was the first day in the last fortnight that no new high was made. Thus it could be that short-term players, who had only just given up on the idea to endlessly trying to pick a top, might be (or have already been) lured back into precisely the same tactic. Another short squeeze could be in the making. We stick to our existing bullish strategy and an objective at 1.3650. As mentioned yesterday, the target level and a second good supply point at 1.3595 are the only significant hurdles for the singlecurrency. To the downside, our risk-limit to the bullish scenario is unchanged at 1.3240.

USD JPY (114.55) The BOJ’s Mizuno cranked up market expectations of a Japanese rate hike yesterday. His affirmation that the Bank is still at an early stage of policy normalization raised the prospect of a December move and pressured the dollar to within 25-pips of our 114.20 objective. For risk-reward reasons, we must now tighten the upside limit to the bearish view to 114.95. But readers should be warned that no bullish signal would be given beyond there. Indeed, we even prepare a new bearish strategy in case of a subsequent correction to 115.60 (new limit at 116.00 in this case). To the downside, any violation of the target-level would leave the dollar with no meaningful support. We would immediately target 111.05 in that case.

EUR JPY (152.75) The Mizuno comments impacted the cross just as harshly as the dollar – it fell abruptly to a 152.70 low. This was probably the kind of small surprise for the market that his colleague Nishimura later described as ‘unavoidable’. The euro has already violated its initial support. Additional demand points stand today at 152.10 and at 151.75. The latter is to be treated as critical. In the meantime, resistances will undoubtedly have stiffened as a result of the decline. We look for offers at 153.25 and at 153.80.

GBP USD (1.9725) The current objective remains at 2.0315. UK economic data was
generally positive yesterday, but this did not prevent the Pound from sliding back to test the risk-limit of our bullish scenario at 1.9680. This level remains valid for today. Overhead, there is still no meaningful resistance ahead of the target level; we can only suggest 1.9950 as an intermediate point.

AUD USD (0.7865) The current objective remains at 0.8170. The latest A$ correction did not damage any interesting support points yesterday. As before, we continue to monitor the downside limit to our bullish view at 0.7835. To the upside, weak supply may still stand at 0.7900.

IFR Markets

EUR/USD
Price has broken the base of the 1.3285/90 to 1.3360/65 range and 1.3260 has come back under pressure. Hourly studies are heading lower but from neutral levels awhich suggests that further whipsaw action could be on the cards. Daily trend studies are heavily overbought with the slow stochs on the verge of a negative cross in favor of our short trade.

Resistance:
1.3495(M) Daily High Jan 4 05 Flat On A Failure
1.3480(M) Weekly High Mar 7,14 05 Flat On A Failure
1.3435(M) 2% M/A Band Flat On A Failure
1.3365(M) Daily High Dec 3 Stop/Reverse Above

Support:
1.3220(M) Pullback Low Dec 1 Cover On A Bounce
1.3170(M) 10-Day MA Cover On A Bounce
1.3135(M) Nov 29 Low, 38.2% Fibo Take Profit
1.3120(M) Daily Low Nov 28 Sell Sustained Break

USD/JPY
114.50 props ahead of 114.45 support which is also the low from yesterday. Hourly studies are heading north again and interim resistance at 114.80 has been breached. Daily charts are deep in oversold territory but show no signs of bouncing as yet. Still sellers into strength with tight target and stop levels advised.

Resistance:
116.55(M) Daily High Nov 30 Sell A Failure
115.85(M) High Dec 4, 10 M/A Sell A Failure
115.45(M) Failure High Dec 5 Sell A Failure
115.20(M) Hourly High Dec 5 Sell A Failure

Support:
114.45(M) 50% of 109.00/119.90 Sell Sustained Break
114.00(M) Daily Low Aug 4 Cover On A Bounce
113.45(S) Trend Low Jul 10, 2% Take Profit, Sell Break
113.15(S) 61.8% of 109.00 - 119.90 Cover On A Bounce

GBP/USD
Contra trend short trades in play and price is easing this morning. 1.9700 and 1.9680 which was the base of yesterday"s pullback have both been breached and 1.9635 now eyed. Daily charts are in the process of rolling over from overbought levels and risk is for deeper corrective pullbacks. 1.9460 is the target but cover bounces ahead.

Resistance:
2.0045(M) Daily High Sept 9 92 Flat On A Failure
2.0000(M) Key Psychological Level Flat On A Failure
1.9845(S) Daily High Dec 1 Buy A Break Above
1.9805(M) Failure High Dec 5 Buy Stop Above

Support:
1.9635(M) Pullback Low Dec 1 Cover On A Bounce
1.9545(M) Daily High Nov 29 Cover On A Bounce
1.9460(S) Nov 27 Hi, 38.2% Fibo Take Profit, Buy Bounce
1.9435(M) Daily Low Nov 29 Buy A Bounce

USD/CHF
Gaining intraday but hourly studies are overbought and risk is for pullbacks near term. The daily charts are deep in oversold territory and the last 2 day"s price action have formed Dojis on the daily candles which represents indecision in the marketplace. On the topside will need a break of 1.2115 to negate the bear bias.

Resistance:
1.2205(M) Nov 23 lo, Hrly Hi Nov 24 Take Profit, Buy Break
1.2185(M) Daily Range Low Aug 21 Flat On A Failure
1.2115(M) Daily High Nov 29 Sell Failure, Buy Break
1.2015(M) Prior Daily Range Low Sell A Failure

Support:
1.1880(S) Daily Low May 4 05 Buy Bounce, Sell Break
1.1840(M) Daily Low Apr 29 05 Cover On A Bounce
1.1805(M) Daily Low April 25 05 Cover On A Bounce
1.1780(S) Pullback Low Apr 22 05, 2% Take Profit, Sell Break

EUR/JPY
Price has broken below 152.60 support and short trades have been establsihed. Lacking much follow through just now as hourly studies threaten to bounce from oversold levels but with the daily charts heading south again further weakness is on the cards. Stops are above the 153.55 fibo to give the trade a chance.

Resistance:
155.85(M) 2% MA Band Top Take Profit, Buy Break
154.15(M) Daily High Dec 4 Sell Failure, Buy Break
153.55(M) 61.8% Of 154.15 - 152.60 Buy Stops Above
152.80(M) Hourly Resistance dec 6 Expect Stalling

Support:
151.80(M) Nov 24 Hi, Gap Bottom Cover On A Bounce
151.65(M) Daily High Nov 20 Cover On A Bounce
150.50(M) Daily Low Nov 24 Cover On A Bounce
150.20(M) Daily Low Nov 7, 8 Take Profit, Sell Break

EUR/GBP
Supported by the hourly trendline support at 0.6740. Hourly studies remain mixed though and a retest of this level could still be on the cards. Flat for now although will buy another bounce off this line. Daily charts are showing a positive cross on the slow stochs which generate a buy signal. On the topside above 0.6765 0.6785 is key.

Resistance:
0.6850(M) 61.8% Of 0.6960 - 0.6670 Flat On A Failure
0.6820(M) High Sept 11, 200 M/A Flat On A Failure
0.6785(S) 5 Recent Daily Highs Sell Failure, Buy Break
0.6765(M) Hourly Highs Nov 29 Sell A Failure

Support:
0.6740(M) Hourly Trendline Sppt Buy A Bounce
0.6715(M) Nov 8 High, 10,13 Lows Buy Bounce, Sell Break
0.6695(M) Daily Low Nov 7,8,9 Cover On A Bounce
0.6670(M) Oct 31 Trend Low Cover On A Bounce

EUR/CHF
Whipsaw action continues around the 1.5900 mark. Hourly studies have just faltered around 1.5895 and price is heading south again and we expect the 1.5860/65 level to come back under threat. Daily trend studies are heading higher but the trend is not strong yet. We need a sustained break of 1.5945 before becoming confident in long trades.

Resistance:
1.6010(M) Daily High Nov 17, Bolli Take Profit, Buy Breakout
1.5975(M) Daily High Nov 20 Flat On A Failure
1.5945(M) Daily High Dec 4 Sell A Failure, Buy Break
1.5895(M) Hourly Resistance Dec 6 Expect Stalling

Support:
1.5860(M) Range Low Nov 30, Dec 1 Buy A Bounce
1.5830(M) Nov 27 Low, Bolli Buy A Bounce
1.5800(M) Daily Low Sep 28 Buy A Bounce, Sell Break
1.5755(S) Trend Low Sep 25 Cover On A Bounce

USD/CAD
1.1440 has stalled attempts to rally this morning and the pair eased back below the figure. Hourly studies are mixed though and further whipsaw action looks set to continue between 1.1380 and 1.1440 for now. Daily trend studies are heading north but momentum has eased and the RSI has backed off slightly. Caution prevails.

Resistance:
1.1650(M) Daily High Apr 5 Flat On A Failure
1.1615(M) 2% MA Band Top Take Profit, Buy Break
1.1535(M) Weekly Highs Apr 06 Flat On A Failure
1.1500(S) Nov 21 Hi, BB, 1% Env Sell Failure, Buy Break

Support:
1.1365(M) Daily Low Nov 30 Buy A Bounce
1.1335(M) Hourly Rsst Nov 28, 29 Sell A Break Below
1.1280(M) 200-Day MA Line 1% Env Cover On A Bounce
1.1260(M) Daily Lows Nov 7 & 10 Cover On A Bounce

AUD/USD
Downside bias on the daily charts as price continues to head south. Looking for opportunities to short the page as the slow stochs are on the verge of a negative cross in overbought territory which would generate a good sell signal. On the downside first key support comes in at 0.7810.

Resistance:
0.7955(M) Dbl Top Mar 9 & 16 05 Flat On A Failure
0.7925(M) Daily Hi Mar 22 05, Dec 1 Sell A Failure, Buy Break
0.7910(M) Daily High Dec 4 Sell A Failure
0.7890(M) Hourly Resistance Dec 6 Sell A Failure

Support:
0.7840(M) Daily Low Dec 5 Buy A Bounce
0.7810(M) 38.2% Of 0.7615 - 0.7925 Buy A Bounce, Sell Break
0.7775(M) Daily Low Nov 28 Cover On A Bounce
0.7760(M) Daily Low Nov 27 Cover On A Bounce