G10
EUR – Have to say surprised by the follow through to the downside yesterday – we never looked back from the rate change announcement taking out the support at 1.2450/1.2410 – and very little retracement back above that 1.2410 support lvl since – we await payrols today but i think market again looking for reasons to aggress eur lower from here so a strong print would see us take a look at last payrols lows at 1.2290 lvl while a weaker print should give us an opportunity to sell eur 1.2430/50.
GBP – U.K PPI data at 9.30. Still a EURO story for now, with another leg lower after the ECB yesterday. EUR/GBP satisfied my immediate order demand between 0.7980 and 0.8000 but remains sticky at 0.7970. I expect further corporate type demand to be prevalent down to the years low at 0.7950. Below here and the tech picture paints further weakness but demand again into 0.7900 will soak up break sellers. Cable piggy backs EUR/USD but remains a fade on rallies to increase shorts with 1.5540 and 1.5575 the first levels to consider. 1.5470 support needs to crack for the next bout of weakness. NFP’s for me don’t have the same level of importance but the market is in the mood to buy USD’s. Maybe we get another excuse.
JPY – All about payrols – we haven’t been able to break the range either side 79.20/80.10 this week – yesterdays attempt higher ran into a wall of exporter selling – for today expect 79.50/60 to provide support before the data topside 80.10 should contain us – i think a strong print should see a spike through that 80.10 lvl possibly opening up 80.60 lvl while below consensus enough to push us back towards 79.20 support.
AUD (1.0264) – we seem to have run out of support levels for EURAUD, so let’s just say we have offers lining up topside from 1.2100 – 1.2150. This cross remains in vogue for the time being, with interest in AUDUSD sporadic at best. Whilst we whip about in this 1.0240-1.0320 range, I cannot see anything changing. The China headlines yesterday certainly threw a spanner in the works, though resistance round 1.0320/30 held very well with this remaining the key level topside. I am square cash here, got chopped out of shorts on the headlines yesterday so happy to sit on the sidelines whilst we remain in this range. We see stops on a break of 1.0240.
CAD – still stuck in a range ahead of CAD employment and US NFP later today. Despite the eur selloff post ECB, eurcad supply dominated any usd strength. 1.0110/20 support and 1.0160 resistance till data today. Bias still to buy on dips.
Scandies – EUR/SEK leads the pack with the daily break below 8.7000 and the extension down to 8.6000. Some long term support levels 8.5450, 8.6000 depend on how thick your pencil is but the overall tech picture remains bearish. Sellers will be waiting to re-load or add in the 8.6700-8.7000 with 8.7550 the first risk level for shorts. 8.8600 should cap on a medium term view. Overall, I remain short with room to add. EUR/NOK reluctantly backs off below 7.5000 but both NOK/SEK selling and domestic issues with the oil industry take the shine off the NOK.
EM
ZAR – Between headlines and Central Bank intervention it is tricky trading markets. Price action in USDZAR was extremely messy but overall the pair was contained to an 8.0755 – 8.1740 range and continued to feel heavy through the day. On the day we were better buyers of USDZAR but we saw decent 2way flow as the pair bounced around in the range.Today’s Non Farm Payrolls are the perfect end to what has been a busy data/event/headline week. Last week this time we were trading at 8.4000 and USDZAR has come a long way to the 8.0619 intra week low. Support now comes in at 8.0500 and if we manage to break that 7.9970 (200dma) becomes the next level. Topside a break of 8.2000 should see USDZAR rally higher. For now we respect the range, preferring the short USDZAR trade but being very selective on levels and wary of this afternoon’s employment data.
Barclays Capital