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Daily FX View: CPI Hits GBP, SEK; NOK Down On Risk Aversion

NOK underperforms on concerns sovereign wealth fund has too much risk.

• GBP falls vs 20 peers on soft inflation data
• PPI output for Oct. -0.3% m/m vs est. unch; CPI 0.1% vs est. 0.3%; RPI 0.0% vs est. 0.4%
• Citigroup's UK economic surprise index 11.50, continues decline to low since June; corroborates weakening GBP/USD
• 1/2 hour chart: upside bias 1 to 2 days for oversold GBP/USD; support 1.5855 session low
• Daily chart: GBP/USD breaching ~1.59 Oct. lows; next support 1.5752 June 17 high, 1.5718 Aug. 21 high
• CFTC net long, non-commercial position -2437; trending lower from 13.2k Oct. 25, supporting weakening GBP

• SEK lower vs 22 peers on weak CPI inflation
• Oct. CPI -0.2% m/m vs est. +0.1%, -0.1% y/y vs est. +0.2%
• Sweden economic surprise index -42.60, falling; consistent with EUR/SEK rally
• Daily chart: EUR/SEK testing 8.8990 June 24 high; at significant risk of pullback, with RSI at high since June, stochastics falling in bearish divergence vs FX rally
• Resistance: 8.9458 May 2012 low, 9.0496 June high; support 8.7540 Nov. 8 low, 8.7134 Oct. 28 low, 8.6915 Nov. 7 low

• NOK weighed by concern sovereign wealth fund has taken on too much risk; down vs 21 peers overnight
• EUR/NOK daily chart: Breaching multi-year highs; no extreme overbought readings yet from MACD, RSI, stochs
• Resistance: 8.5670 Nov. 2009 high; support: ~8.1650 Aug., Sept., Oct. highs

• INR down vs 19 peers, weighed by declining Sensex stock index
• Daily chart: USD rally continues; resistance 64.525 Sept. 10 high; support ~63 psychological, late-Sept. highs
• Risk today from CPI, ind. prod.; CPI, Oct., est. 9.90% y/y; ind. prod., Sept., est. 3.5%y/y, 12-mo. avg. 1.1%

• USD/JPY - Testing 100
• 1/2 hour chart: Downside bias to start Americas' session as cross overbought; resistance 99.80 session high; support 99.11 session low
• Daily chart: Uptrend continues; warnings may be overbought
• Resistance 100 psychological, 100.61 Sept. 11 high
• Support 99.17 Oct. 17 high, 98.85 Nov. 1 high
• MACD differential, RSI, stochastics highs since Sept.; stochastics crossing lower

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