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Daily Report

Markets Steady After US Rout25 October 2018 by Dave Evans

Morning Report: 07.00 London

This morning, markets are steadying after last night’s late rout on US financial that saw the tech heavy Nasdaq make its biggest fall since 2011.

The yen pairs are stabilising after heavy selling yesterday as traders sought out the yen’s safety yesterday. The USD/JPY fall back to support at 112.00 with minor buying interest this morning. The AUD/JPY dropped to support at 79.00 with moderate buying this morning. The EUR/JPY continued its drop from the September highs, punching through support at 128.00.

The GBP/JPY is now down 1.73% on the week as Brexit fears saw the pound singled out for punishment. The EUR/GBP is lifting above the 0.8850 level. The GBP/USD was also punished yesterday, dropping to its lowest levels since the beginning of September.

Other dollar pairs are making tentative recoveries this morning, with the EUR/USD attempting to recover from the 1.1400 support level. The AUD/USD held up relatively well yesterday, making back half of yesterday’s losses.

The US dollar and Swiss franc mostly cancelled each other out yesterday, with the USD/CHF making small gains off the 0.9950 support level. The Swissy outperformed other currencies such as the euro though, with the EUR/CHF breaking support.

The USD/CAD had a volatile session, plunging well below 1.3000 yesterday at one point, with further selling this morning as the BOC increased rates to 1.75 with a hawkish outlook.

Coming up today

Today, we have Spanish unemployment rate at 08.00.

German Ifo business climate is at 09.00.

At 12.45 we have the main refinancing rate from the ECB, with the press conference at 13.30.

US core durable goods are at 13.30.

FOMC member Clarida speaks at 15.15, with Mester speaking at 22.30.

Trade Idea

The EUR/JPY plunged through support yesterday as the euro continued to display vulnerabilities against the safe haven yen.

With stock markets nervous, the yen could see further gains making a LOWER trade on the EUR/JPY attractive.

October 25th 2018: Markets Steady After US Rout

A good way to play this is a LOWER trade predicting that the EUR/JPY will close below 127.00 in 14 days could return 175%.

October 25th 2018: Markets Steady After US Rout