EUR/USD: The EURUSD selloff yesterday proved how difficult it is to try and fight the trend. We think this was the perfect move for another dip, but will stay flexible intraday. Fade a 50-60 pip move in either direction with stops below 1.2600 or above 1.2800. Flows are mainly on the right-hand side but have had limited impact.
GBP/USD: Sterling has been on a rollercoaster ride primarily following US Treasurys and equities. Stay on the sidelines and fade extreme moves on either side.
AUD/USD, NZD/USD: AUD and NZD got hit by risk aversion and weaker commodity prices but had muted interest overnight despite the S&P closing down 2%. Sell AUDUSD ahead of 0.8830 with a stop above 0.8900, yesterday’s high. Add to shorts on clear break of the first support at 0.8730, targeting 0.8650. Sell NZDUSD around 0.7900/10 with a stop above 0.7970/80, yesterday’s highs, and add on a break of 0.7800, for 0.7720.
UBS