Karen Jones, analyst at Commerzbank, suggests that USD/CHF pair is upside corrective near term, after the market saw a key day reversal on Tuesday last week from .9659. Key Quotes “A sustained break below the .9716/.9692 key support was not seen (location of the 25th June low, the January low and Fibo support) and we would allow for recovery to the 55 day ma at .9851. Key resistance remains the 200 day ma at .9960, and we continue to look for this to cap the topside. Below .9659 (last weeks low) targets the .9543 September 2018 low. Longer term we target .9211/.9188, the 2018 low.” “Above the 200 day moving average lies the mid-June high at 1.0014 and 1.0123/78.6% retracement.”

According to Danske Bank analysts, markets will get a bit more clarity today on where the Italian government crisis is heading, as PM Conte is due to face a confidence vote in the Senate this afternoon. Key Quotes “Should Conte fail the vote, the initiative reverts to President Mattarella, who could either call for snap elections or try to broker a new cross-party alliance between Five Star and Renzi's PD to avoid interference with the 2020 budgeting season. Either way, political uncertainty in Italy will remain elevated for the time being.”

UK's Conservative party Chairman Cleverly is on the wires now, via Reuters, noting that “whether we leave with or without a deal is largely in the hands of European Union (EU) negotiators”. Additional Comments: The EU needs to show a degree of flexibility. If we can overcome the backstop problem, we can leave the EU with a deal. The GBP/USD pair extends the downside, now testing session lows just ahead of the 1.21 handle, as markets are aware that the EU is unlikely to renegotiate a Brexit deal with the UK.

Reuters quotes excerpts from the letter written by the US Senate Democratic leader Schumer to the Secretary of State Mike Pompeo late-Monday, citing that he would oppose any post-Brexit US-UK trade deal if it undermined the Good Friday agreement. The letter read: “The notion that America would now endorse a policy or agreement that undermines the success of the Good Friday Agreement is profoundly counterproductive and risks exacerbating sectarian polarization and eroding self-determination - and unleashing the potential for violence that comes with that reality. This cannot be allowed to happen,” The Good Friday agreement helped end three decades of violence in Northern Ireland, dismantling all physical border infrastructure between European Union member Ireland and Northern Ireland. The pound is likely to remain under pressure amid looming Brexit uncertainty combined with increased nervousness ahead of the US President Trump and the UK PM Johnson’s meeting at the G7 Summit this we..

Open interest in GBP futures markets rose by just 525 contracts on Monday, extending the erratic performance. On the other hand, volume dropped once again now by around 21.5K contracts, all according flash data from CME Group. GBP/USD still holding on above 1.20 Cable has faded part of last week’s recovery and is now grinding lower amidst choppy activity in open interest and declining volume. Further rangebound now appears on the cards, while the case for a test of 1.20 and below remains well in place for the time being.

FX Strategists at UOB Group still see scope for EUR/USD to revisit yearly lows near 1.1020 in the next weeks. Key Quotes 24-hour view: “EUR traded between 1.1074 and 1.1113 yesterday, narrower than our expected sideway trading range of 1.1065/1.1115. While the slightly improved downward momentum could result in EUR dipping below last week’s 1.1065 low, a sustained decline below this level is unlikely (next support at 1.1040 followed by the major level of 1.1025). On the upside, 1.1115 remains as a strong resistance level (minor resistance is at 1.1100)”. Next 1-3 weeks: “EUR closed lower for the fourth straight day last Friday as it dropped to 1.1065 before settling at 1.1089 (-0.15%). Downward pressure has increased further and from here, a retest of the early August low of 1.1025 would not be surprising. That said, it is unclear at this stage whether there is enough momentum to break the crucial 1.1000 level. On the upside, only a move above 1.1160 would indicate that the current ..

Bill Evans, analyst at Westpac, points out that the Minutes of the August meeting the Reserve Bank Board of Australia has identified both global and domestic risks as relevant for policy. Key Quotes “The minutes of the Reserve Bank Board meeting for August have provided one significant surprise.” “In both the Governor’s decision statement following the meeting and the Statement on Monetary Policy (similar version), the conclusion included “the Board would continue to monitor developments in the labour market closely and adjust monetary policy if needed to support sustainable growth in the economy and the achievement of the inflation target over time”. In these minutes, the emphasis has changed to the following “the Board judged it appropriate to assess developments in the global and domestic economies before considering further change in the setting of monetary policy. Members would consider a further easing of monetary policy if the accumulation of additional evidence suggests this..