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Daily FX View: CAD, MXN Under Pressure Vs JPY, CHF On U.S. Budget, Debt Concerns

USD lower vs haven FX including JPY, CHF, EUR, GBP while high-yield, risk FX including MXN, CAD underperform.

• House speaker Boehner says no debt ceiling hike, no budget deal without negotiations

• USD/JPY moderately lower, testing late-Aug. lows around 97; subsequent support 95.81 Aug. 8 low
• Technicals suggest upside USD/JPY risk: Daily MACD, RSI, stochastics all oversold

• EUR/USD modestly higher overnight after Friday's losses; cross looks overbought
• Daily technicals: MACD, RSI, stochastics at, near highs of June peak above 1.34
• Weekly technicals: MACD, RSI, stochastics around highs of 1Q when EUR topped above 1.37
• Options: 25D, 1M R/R -0.4275 high since Feb. as FX retreated from test above 1.37; 1M imp. vol. 7.6750, retreating from top since Dec.
• Support: 1.3462 Sept. 25 low, 1.3452 Aug. 20 high, 1.3417 June 19 high

• USD/MXN moderately higher overnight, with MXN underperforming 24 major peers excl. INR; daily trend upwards
• Daily chart: Consolidating ~13.10-13.20
• Daily MACD, stochastics trending higher, no sign overbought; RSI high though not overbought
• 1M imp. vol. 13.56%, in middle of range for past 6 months, neutral on FX direction
• 25D, 1M R/R 1.9825, at low end of 6-mo. range, suggesting upside for FX

• USD/CAD modestly higher overnight, with CAD weaker vs 16 of 24 major counterparts; daily momentum remains higher despite retreat from 1.0356 Oct. 2 high
• Daily MACD, RSI, stochastics all rising, no sign overbought
• Options indicate upside risk:
• 25D, 1M R/R 0.7925, near lows since Feb.
• 1M imp. vol. 5.9175%, near lows since Jan.
• Daily technical levels:
• Support 1.0271 Sept. 24 low, 1.0182 Sept. 19 low
• Resistance 1.0356 Oct. 2 high, ~1.044 Jul. 16, Aug. 7 highs

• NOTE: TJ Marta is an FX strategist who writes for First Word. The observations he makes are his own. To contact TJ Marta, click here.