Euro Leg.A report released by U.S. investment bank Morgan Stanley indicated that HIAcorporate repatriation activity looks to intensify… … from November 15 * December 15 in accordance with domestic accounting and tax reporting rules.

As a result, further
dollar bullishness looks to strengthen considerably during the period placing
unwanted downward pressure on the euro zone single currency. Additionally, French
riots, which have intensified and entered into its eleventh day are placing some
concern over the region. Nations including the United States, Russia and the U.K.
have warned tourists from entering the region, as violence has extended into the
southern region of the country. Although widely regarded as a fleeting situation,
further intensification may ultimately lead to economic concerns as the devastation
rises.

Positives
Although suffering considerably over the past few sessions, there seems to be a
slight uptick in the cross currency as we enter the Asian session. Dow Jones has
released comments in line with earlier suggestions that the ECB remains more
hawkish by the EU's Aluminia. However, with still further comments by Austria's
Grasser and the Netherland's Zalm downplaying inflationary conditions, further
selling pressure looks to confine the single currency.

Technically Speaking
Bouncing off of support at the 138.50 figure, further selling looks in store for the
cross as the current action forms bull trap resemblance. Nonetheless, further near
term buying momentum looks to meet a test at the 23.6 percent fib at 139.11.
Previous consolidation makes this level a good support once broken to the upside,
providing further upward scenarios.

AUDJPY

Unloading Aussies
Traders pared back further positions in the Australian dollar on a myriad of
selling reasons, notably the HIA repatriation and some overall downward
expectations. However, what has capped the downside momentarily has been a
reassessment of the statements released by the Reserve Bank of Australia suggesting
a shift in current monetary policy to a tightening bias. Furthermore, bolstering
the current support is a rumored option barrier at 0.7300. With a large Asian name
buying in front, the current underlying spot price looks to be underpinned for the
moment, ultimately lending to the AUDJPY cross currency pinpoint stop right below
86.00.

Yen Overextension
Unloading yen short positioning, traders finally created some buying pressure on the
Japanese leg. Known for its currently overextended technical picture, the
underlying spot has garnered some buying interest as the most recent IMM Commitment
of Traders report shows a closing in on an extreme 77K yen short market position.
The initiatives were in light of economic data that was far from positive as both
leading economic and coincident indexes fell below previously optimistic levels.

Technically Speaking
As mentioned before, option barrier notions have capped the Australian dollar leg,
providing for a subsequent pinpoint turn in the cross currency. Additionally, with
the price action currently hovering above the 23.6 percent fib at 86.21, further
upside potential remains for the AUDJPY. However, should a break befall the cross,
a definitive test of the intrasession low would be imminent.

GBPJPY

Interest Rate Runup
Traders took the opportunity today to pare back positions that were earlier
initiated on a carry trade basis, capturing the wide interest rate differential
offered in the currency pair. Additionally sparking further declines in the
underlying pound currency, and ultimately the GBPJPY currency cross, were lower
economic figures released earlier in the session. Both industrial and manufacturing
production dipped on the month lending to the overall negative productivity that is
currently plaguing the United Kingdom. Industrial production for the month of
September rose 0.5 percent, reversing a 0.9 percent dip in the previous month.
However, the increase was smaller in comparison to earlier estimates of 0.7 percent
leading some pessimism on the underlying. This now places the annualized figure at
a 1.1 percent decline. Manufacturing for the same month additionally fell, dipping
0.3 percent against consensus estimates of a rise of 0.3 percent. Contributing to
an annualized dip of 0.8 percent, the manufacturing figure, coupled with the
industrial component, further feeds minority expectation that Bank of England policy
makers will entertain the idea of a rate cut in bolstering future figures.

Technically Speaking
Much like the latter two JPY crosses, the price action in the GBPJPY has found a
pinpoint bottom heading into the Asian session. As a result, the first upside test
looks to be presented at the 23.6 percent fib at 205.59. However, unlike the
previous pairs, a potential resistance confluence awaits the price action. As a
result, a bull trap looks to ensure with further downside pressure inevitable.

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