2 - Sept - 2022

Possible triple top formation in CADJPY on the daily charts. Interesting that implied vol is failing to track the spot higher. Suggests to us that the options market is no longer short topside vega and there remains the possibility as suggest last week that we can take out the trendline support in the premium levels. 

At the same time, CADJPY actual vols are falling as we approach the previous cyclical spot highs. It should be pointed out that in a week that saw the release of the US NFP report ahead of the Labour day weekend options prices more or less across our database ended the week bid. That is not the usual price action. The market is not comfortable shorting vol and is less comfortable in shorting gamma-type options even ahead of a major holiday weekend.

Another chart shwoing the potential CADJPY triple top. Dispersion should remain subdued as long as the channel holds, but a clear break should be a good indicator of potential trending price action. 

Potential momentum divergence, but far from clear at this point. 

EURGBP takes out the long-term trendline and our daily momentum indicator turns back up. Short-dated EURGBP options are bid and the risk reversals have moved strongly better bid for EUR calls over. 

Both short and longer term hourly dispersion rising and will get a further boost if the previous peak at 87 is taken out. 

EURJPY momentum back into positive territory but we are challenging the top end of the previous trendline break. 

GBPCAD continues its controlled decent with short date GBPCAD actuals only stabilizing as the spot pushes still lower. 

GBPCAD daily dispersion rising and now as you can see breaking above the dispersion trend line. Suggests still further GBPCAD weakness to come. 

The hourly dispersion also confirms the higher odds of an acceleration in the GBPCAD downtrend. 

GBPJPY forming a large triangle pattern on the hourly charts. A break in either should be significant. 

Similar pattern with respect to GBPUSD as daily dispersion rises and spot makes fresh lows. 

Potential break of the previous cyclical lows in GBPUSD but also potential for double bottom formation. A daily or weekly close under 1.15 would be suggestive of a retest of the all-time lows seen in the 1980s around 1.0500

Hourly dispersion adds to evidence for further fresh lows as our longer term dispersion indicator rises. 

USDCAD making small new highs but one month vol not rising to the same degree as previous peaks. We remain skeptical about a continued shift lower in CAD and believe forthcoming interest rate hikes will contain further CAD weakness. 

CAD makes a new low but closes the weak right on top of the previous topside resistance (now support). This does not yet add up to a confirmation of a weaker trading range. 

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