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  • (BFW) Daily FX View: USD Down Vs EUR, JPY; Uptrend Intact Vs MXN, BR 0 comments
    Oct 24, 2013 6:52 AM

    Mixed data and developments overnight leave USD looking at more losses vs EUR, JPY, upside vs MXN, BRL remains in place.

    • China - growth v liquidity
    • China flash mfg PMI 50.9 vs est. 50.4, prior 50.2, further evidence of continued growth
    • China 7-Day repo rate +74bps to 4.79%, high since July as policymakers drain liquidity to apply breaks to improving economy
    • Tighter liquidity may also partly reflect upcoming corporate tax deadline

    • Germany - manufacturing vs services
    • Manufacturing PMI 51.5 vs est. 51.4, prior 51.1; uptrend since July 2012 continues
    • Services PMI 52.3 vs est. unch 53.7, in ~48-56 range since mid-2011

    • EUR/USD higher overnight, quickly retraced jump above 1.38
    • On daily chart, uptrend continues; while MACD, RSI, stochastics, R/Rs, imp. vol. all suggest elevated risk of reversal, next technical resistance remains far away: ~1.425 Oct. 2011 high, 76.4% Fibonacci rebound of 2011-2012 decline

    • USD/JPY consolidating yesterday's sharp decline, which threatens breach on weekly chart below uptrending support from June
    • Downside targets: ~97 late-Aug. lows, 96.57 Oct. low, 95.81 Aug. low, 94.99 May 2010 low, 93.79 June low

    • NZD/USD lower, failing to hold gains from better-than-expected trade report, China PMI, NZD extending yesterday's losses vs 22 peers
    • Sept. trade bal. -199m NZD vs est. -680m, prior -1234m, exports 3.83m from 3.3m, imports 4.03m from 4.53m; trade bal. trend remains downward
    • Daily chart: NZD/USD extending Wed. losses; testing support at 0.8351 Oct. 4 high; subsequent support 0.8194 Oct. 2 low

    • MXN risk today is bi-weekly CPI, est. 0.35%, 09:00am
    • USD/MXN extending yday's outside day higher; upside target: 13.440 Oct. 3 high

    • BRL risk today unemployment rate, Sept., est. unch. 5.3%
    • USD/BRL rebounding from Oct. 18 low; breaching Oct. downtrend; resistance 2.1916 Oct. 2 low, 2.2640 Sept. 27 high

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

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