EUR – So 1.3130/40 resistance remains intact despite another attempt yesterday in ldn to breach. An o/n NY wobble on some early reported goggle results enough to clean some weak long positioning below 1.3075 but still not much follow through with 1.3055 the low. Have bgt this dip at 1.3060 will add at 1.3030 with a stop at 1.2975 looking for a fresh attempt at the highs
GBP – (1.6037) – didn’t see that move coming, the market guilty of getting a tad too long following the stronger retail sales print yesterday. We saw some decent interest to + GBP in the wake of the data, but continued to run into decent custodial offers every price step higher. We see some decent interest to buy ahead of the figure, I have gone long here with a chop below the recent range lows at 1.5980 as I think this latest leg lower was stops getting triggered as London walked in. Technically I favour EURGBP higher after breaking the 200dma and closing above range highs at 0.8115, this is certainly the direction of pain with some decent selling interest noted yesterday. Book is skewed in this direction, stops kick in through 0.8160 and are consistent up to 0.82 figure. No domestic data of note today, that said it should be an entertaining session following the overnight flush out with cable hovering just above range lows. G’luck!
JPY – Sustained the break of the 78.90/00 cloud lvl , closed above the 21 week m.a at 79.20 and the Delayed cloud line so technically it trades well, although it didnt manage to close above the 200 day at 79.40. Some gd exporter selling 40-50 capping the rally – Today similar offers remain 45-55 but then order book pretty clear until 80.00. Downside looking at 79.00/10 to again hold on dips if not 78.60 important support that held 2 days ago. – I remain long although i reduced the position on the fail at the 200 day. Looking to buy a dip to 00 or a break of 79.55/60
AUD – (1.0357) – Was a nothing session overnight for the most part, we still trade above the key 1.0320-40 level so for now the Aussie remains a buy on dips until proven wrong. We are wrong if this closes the week below 1.0320, than this whole squeeze higher can be rendered just that; a squeeze!! AUDJPY remains topical, the universal consensus here is to be long following the ‘break-out’ in each of the individual legs though we see a lot of 2-way interest above and below. CPI next week is the short-term catalyst, until then we should follow more broadly the fortunes of the USD. It is very hard for me to admit that I am long AUD, there is no fundamental rationale for this though out of respect for recent ranges and technicals I will chop this on a daily/weekly close below 1.0320. G’luck!!
CAD – Carbon copy price action as Tuesday really in funds, opened up on the lows sub 0.9800 yesterday morning but couldn’t sustain a move lower with EURUSD whipsawing around and some afternoon crimson stocks in the US saw some more USD buying. A US bank was a very good buyer from 0.9790 up to 0.9725 leading into the WMR fix. Some stops on the break of 0.9830 and further slipping in stocks helped funds back above 0.9850. From here I am short with a stop above 0.9900 and will add again around 0.9880, I think hopefully EURUSD holds above 1.3020 and think that despite the Carney developments this week positioning is a little cleaner in CAD crosses and we are ultimately in a range and happy to lean against the top of it, CA CPI this afternoon may change that though. Good luck.
Resistance 0.9880 0.9900 0.9950
Support 0.9750 0.9700 0.9650
Scandies – Despite Ekholms insistence that Ingves was not sharing the boards view the reaction to his thought that low rates for too long are too risky certainly reflects what the market was expecting/priced in for next weeks Riksbank. EURSEK sold off from 8.6300 to 8.58 after some liquidity was utilised around the 8.60 area, we took off our short EURSEK position but I think rallies should be sold into next weeks Riksbank now and 8.62/63 should be first sell zone. I think equally 8.55/54 should offer pretty good support but there will be stops below. Saw a good buyer of USDSEK around 6.54 yesterday and 6.50 remains an important pivot, I think could be worth selling a break of this level if it comes. EURNOK drifted lower yesterday along with EURSEK primarily on the back of USDNOK selling, think approaching the level where its worth buying EURNOK, stop at least needs to be below 7.30 though so will initially look to buy 7.35/36 on the day. Good luck.
EURSEK support: 8.55 8.52 8.45 resistance 8.63 8.68 8.70
EURNOK support: 7.35 7.30 7.25 resistance: 7.45 7.48 7.50
Barclays Capital