EURUSD Support: 1.3320 1.3279 1.3240 1.3145
EURUSD Resistance: 1.3420 1.3540 1.3570 1.3610 (trendline resis) 1.3620 1.3660 1.3720/30 1.3820
Another day of selling from the real money community yesterday was eventually met with good end user demand on a 1.33 handle, which has slowed the selloff for now. Outside the real money flow, specs and fast money have spent the past few sessions unwinding various USD longs and will likely be looking to reload on any meaningful rally. Still running with short positions in cash and options, albeit in reduced size. I will look to add to my spot position should the German Ifo fall short of expectations (09.00GMT). A deteriorating European core will only add pressure on Draghi to act when the ECB meet again next month. Acutely aware it is Thanksgiving today and liquidity will begin to dry up this afternoon. Antony
USDJPY: Support 76.50 76.30 75.30 75.00
USDJPY: Resistance 77.60 78.00 78.50 79.00 79.55 80.25
EURJPY: Support 102.80 102.50 100.00
EURJPY: Resistance 104.45-65 105.75 106.50-70
Would appear to me that demand for usdyen on a 76 handle has increased, be it from importer and lifer demand or covert intervention – I am not certain. Semi official bid cited at 76.50 last Friday. 3 mega banks every bid but it could just be natural buying of dollars. In this environment the yen will continue to strengthen but sell rallies in usdyen and rallies or support breaks / headlines in euryen. 104.65 remains a good risk point to lean against should nothing new develop in the eurozone and the moves higher be nothing more than position adjustments. Usdyen rally late London immediately unwound by exporter interest into month end and our first resistance level of 77.60 held firm.Yen should net net outperform. Downgrade of Japan on the cards? Rising JGB yields ? 5-10% ish held by overseas so kneejerk reaction to this type of news should be faded in the short run.
GBPUSD: Support 1.5500 1.5425 1.5280 Resistance 1.5600 1.5660 1.5720-30 1.5870-80
EURGBP: Support 0.8590 0.8520 Resistance 0.8665 0.8795
Sterling keeping pace with the Euro slide as bunds continue to underperform – the crisis has arrived at the core’s doorstep. This is what I expected to happen (worse before better) and I think we have a few more sessions of weakness although I think the bund auction may serve to inject some furious determination into the core to make the next EU Summit count – so caution is warranted ahead. For now though I will stick to the plan of being short cable, having taken the last of my shorts back at the 1.5525 pivot (as highlighted in yesterday’s mail) and observing that we could not hold the break I will be looking to start building shorts once more around the 1.5580 level. Mindful that it is thanksgiving, the squeezes could go a little further than planned so I would leave myself room to sell on a further move to 1.5660-70 using the 1.5730 risk point above as re-assessment. It is important to remember if we close up there the RSI indicator will have flipped back into neutral territory (from oversold) a strong technical buy signal. Today sees the second release of GDP (it goes advanced, preliminary and then final) at 9.30 GMT obviously a weak one will build expectation further of a gloomy Autumn statement next week into which sterling should remain on the back foot. Charlie
AUDUSD Support: 0.9664, 0.9620, 0.9525 Resistance: 0.9750, 0.9810, 0.9910
NZDUSD Support: 0.7387, 0.7350, 0.7118 Resistance: 0.7515, 0.7560, 0.7625
USDCAD Support: 1.0425, 1.0350 1.0170 Resistance: 1.0660, 1.0855
The market played off the Dexia and China PMI news yesterday as well as the poor German debt offering. The selloff in equities pushed the USD higher across the board (even against the JPY!). Stops were triggered through 0.9750 and option barriers at 0.9700 were also cleared. The lack of follow thru in Asia has prompted some profit taking for now, buy I feel this will only be a pause in an ultimately larger selloff. German Ifo (09.00GMT) will dictate risk sentiment this morning and any sign of weakness will add to the growing concerns over the core European countries. Thanksgiving in the US will mean poor liquidity this afternoon. Sticking with core short risk off positions. Antony
EURCHF: Support 1.2260 1.2120 1.2000 (peg)
EURCHF: Resistance 1.2500
USDCHF: Support 0.9120
USDCHF: Resistance 0.9250 0.9320
Despite the topside interest in eurchf lately, the cross dropped overnight to 1.2270. Think these dips to 1.2260 represent buying opportunities for a longer-term trade. In this weak risk environment though, it is inevitable that without official support, the Swiss will strengthen. Buy dips or call spreads for the December CPI report.
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MORGAN STANLEY
SALES AND TRADING