G10
EUR – Eur rallies continue to be sold and Friday was no different – we topped at 1.2960 after a woefully weak attempt at breaking that 1.2970 lvl that defines this recent downtrend – In Asia this morning we have continued Fridays sell off and have cleaned a few stops out below 1.2828 previous low and 200 day m.a (1.2824) making a new low at 1.28035 – The price action is soft, of that is no doubt, but we need a close below this 200 day to confirm that – European PMIs of interest today to confirm the break or to help yet another squeeze before ECB and payrolls later in the weak. Prefer to be flexible this morning – roll with the PMI data and see how that follows through – a break below and close below 1.2825 opens up a run at 1.26 – a fail still sees us chop 1.2825/1.2970.
GBP – PMI data this week, kicking off with manufacturing today. The general uncertainty still clouds the market but risk rallies continue to get sold into for now. EUR/USD still conducts other ccy pairs with 1.2970 key on the topside. Cable for me has set out some serious tech resistance 1.6270-1.6300 medium term. Corporate sellers were looking for a blip higher at month end but that supply never got satisfied and sell zones will probably be lowered. 1.6158-70 short term resistance, with 1.6210 above that. Downside 1.6080 and 1.6050 levels need to be breached for a lunge through 1.6000. EURGBP will now become more of a factor of the USD legs especially with NFP’s looming, until the next European related newswire that is. Broad 0.7915-0.8000 range.
JPY – Opens back at the base of the Asia range after failing late Friday in ny and early Asia to gain and hold that foothold on 78.00+ handle – I prefer to play the 77-79 range so currently long with a stop below the recent lows at 77.13 looking first for 78.20 then 78.60
AUD (1.0356) – the theme continues whereby AUD opens the week on the highs, grinds lower over the course of the Asian session and hits rock bottom just prior to the European open. Strange repetitive price action indeed, though this week it may have been justified with a weaker-than-consensus China PMI print setting the tone for Asia. RBA remains the real focus for now, I still think they cut tomorrow though this will hardly be a surprise with ~17bps already priced. We have sold a decent chunk of AUD in Asia, though for now it remains stubborn and refuses to budge when trading below the 200dma. Corporate Australia been quiet of late, I still don’t think they will be particularly active until we trade further toward the 100dma at 1.0234. Books remain thin; we continue to do stops on the break of the 200dma only for the ‘if-done’ component above to be taken out later in the session. Nothing material below until we get closer to 1.0250, topside stops kick in 1.0420/25 though there is a bit of supply hovering round the figure for now. G’luck!!
CAD (0.9839) – has been very dull of late, a modest grind higher over the past few weeks has finally met some resistance round 0.9855/65 though there doesn’t seem to be anything overly material lurking above. Our orderbook has thinned out over the past few sessions, this is probably indicative of the mkts inclination (or lack of) toward trading CAD at this point in time with other ccys in the G10 spectrum at least realising some tradable volatility. We see offers kicking in 0.9890/00, which more or less coincides with the 50dma, with bids downside toward 0.9815/10. Very little in the way of s/l action either side of spot. We don’t have a position in anything CAD related at the moment, will sit on the sidelines for now awaiting a genuine catalyst. G’luck!!
Scandies – EUR/SEK seems a little in no-mans land, with weak data again out of Sweden (slightly weaker PMI) and a weak sentiment at present over the Eur. Hourly resistance at 8.4650, short term range lows 8.4160 are the immediate levels to watch in the pair. It feels as though we are still in range play mode for now with more medium term supply noted above 8.5500. EUR/NOK Still trades on the soft side, eyeing up short term support at 7.3475. A breach of this could open up 7.2500 and remains the target whilst below 7.3885-7.4000. PMI at 9 a.m may be the trigger for a break.
EM
ZAR – Long awaited WGBI day Friday saw rand trade 8.2080 to 8.3285 for the day, saw lots of usdzar selling around WMR FIX that was met with lots of buying from real money and macro accounts. From here think look to buy dips from 8.2500 down to 8.2000 with stops below 8.1800, topside stops building above 8.3600, lots of data this week with FOMC minutes and Non farm payrolls to highlight a few.
Barclays Capital