G10
EUR – Impressive price action post payrolls Friday, the sell off couldn’t get back below 1.2700 and the close above 1.2750 (range highs) suggests that mkt moved towards qe3 and is taking back further medium term shorts – Today expect a little consolidation but expect bids 1.2730/60 as the mkt tries to buy the dip into Thursday’s fomc – topside further stops 1.2820/60 seem vulnerable into some gd tech resistance at 1.2850/60.
GBP – No data today. Trade, employment and earnings data later this week but the FED again the focus. The USD remains broadly back-footed with stocks/commodities firmer and a little less tension in the EURO zone. Cable runs higher, changing big-big figure, taking out some medium term stops into the highs at 1.6034. The picture is a little blurred to me, (sorry, more blurred), at the moment and I’m wondering how much further risk can run higher. I have seen good medium term interest to sell EUR/GBP and retail supply in cable but not convinced enough to back either right now. The next few days are a game of wait and see for me. Levels in cable: support 1.5940, 1.5920 and 1.5855. Resistance: 1.6034, 1.6060 and 1.6155. EUR/GBP has support 0.7970, 0.7950 and 0.7890. Resistance 0.8067, 0.8095 and 0.8130. Have a good week.
JPY – Big unwind post payrolls as the USD bgt on the strong adp print was unwound fast on the weaker payroll number. We have seen some heavy selling 78.00-30 late Friday and again o/n however strong investor bids from Japanese again ahead of this 77.90 previous low – I think we play 77.90/78.00-78.50 into FOMC a break of that downside support should yield a further sell off towards 77.65 (June payroll low) and then 77.00 – Currently playing long against some downside puts looking to play this range into FOMC Thursday.
CHF – Pulled back from the highs at 1.2155 Friday but held well against 1.2065/70 support on the dip – this morning local and spec buying of usdchf 0.9450/70 is helping us move back to the 1.2119, days high. Ultimately think in the short term its a buy on dips to 65 with a stop at 1.20 looking for a break at 1.2160 and test 1.2200/30
AUD – Well seems like with stocks and gold marching higher after Fridays number it all points towards another dose of Ben’s marvellous medicine. We will have to wait until Thursday for official confirmation and as such expect USD rallies to be sold, in AUDUSD that means support back to 1.0330 but weak in the crosses notably AUDJPY, EURAUD and AUDCAD. We saw some very good demand from the CTA community on Friday post payrolls in straight AUDUSD, 1.0420/30 looks toppy in the short term but if short AUD is your bag then prefer it in the crosses for now, will look to sell AUDCAD back to 1.0160/70 if we see it. China data overnight saw in line CPI and stronger than expected trade surplus, net net not a huge reaction in AUD, bit of EURAUD was bought on the open but our orderbook reflects the markets interest to buy on dips, think this strategy makes sense at the start of this week. Good luck.
CAD – Broke through some big levels on Friday in funds, put a new yearly low in sub 0.9800 down to 0.9766 and the CA employment data wasn’t too bad despite the skew towards part time employment change but with QE3 now very much on the agenda CAD should remain in Vogue. The technical picture has now dragged in some more systematic players and our orderbook has offers back to 0.9800 for these players but this should be countered by a few weak stops from some break traders. Expect some consolidation at the start of this week but can still recommend selling rallies in funds leading into FOMC unless we see a big correction in stocks. Good luck.
Resistance 0.9800 0.9840 0.9900
Support 0.9750 0.9700 0.9650
Scandies – Dare I say it are we back to tentative risk on/risk off in scandies again!? Both EURSEK and EURNOK found decent offers on Friday off of 8.50 and 7.40 respectively, USDSEK breaking down below 6.71 on the way to 8.60 was the main catalyst for EURSEK selling off. 8.42/44 should be good support for now in EURSEK and equally Riksbank high of 8.55/56 where there were local offers should still be good resistance. Industrial production this morning early impetus, not positioned in Scandies at the moment however and will be looking to sell back above 8.52/53 for now. Saw some good model demand for EURNOK well absorbed on Friday and local selling ahead of 7.40 which capped us. Happy to still sell rallies in EURNOK as well but think 7.30/28 should be good support on the day. Best of luck.
EURSEK support: 8.42 8.36 8.28 resistance: 8.5520 8.60 8.70
EURNOK support: 7.30 7.28 7.20 resistance: 7.40 7.45 750
Barclays Capital