EUR – Continues to trade 30 pips either side of this 1.3050 lvl – my bias remains unchanged to buy dips 1.3020 then into stops 1.2970/90 with a stop at 1.2935 – Orderbook has bids ahead of 1.30 with stops below down to 1.2965 – topside some offers 1.3075/90 with couple of stops scattered 1.3100/20 before offers again 1.3135/70 topside – Quiet day data front for europe with IFO tomorrow and FOMC later so expect more range playing
GBP – BBA loans for house purchase data 9.30. We continue to drift in ranges in most G10 pairs, with the JPY continuing to weaken in the background. Cable, ghosting EUR/USD, feels like it can gradually loose its grasp and slip away, with EUR/GBP benefiting. 0.8150 broke, taking out short term stops but lacked the legs to continue. I think the market has long EUR/GBP already however and stops build on the downside through the figure. Should we gravitate towards, I will look to buy the dip. Topside resistance at 0.8190. Cable support kicks in at 1.5965-75 with resistance at 1.6070. I continue to play ranges.
JPY – Asia got short early yesterday which helped the squeeze through the 200 day at 79.45 – We got the close above and even took out the resistance 79.65/80 lvl with rumours of heavy mid east demand – Today in Asia we cleared the 80 barrier but no follow through with lev and exporter selling – I remain long but with offers remaining 80.00/10 topside feel that we may get that dip 79.50/65 to buy again – While we remain above 79.20 I happy to be long although a close back below the 200 day at 79.45 would be disappointing considering how well we have traded on a tech basis the last week.
AUD – tight ranges continue to prevail, should remain this way into the CPI number tomorrow morning which remains the immediate short-term catalyst. We have a decent skew to buy below, 1.0300-1.0275 should be well supported but a break below here gets ugly with quite a few stops already building below. My decision to be square cash yesterday paid dividends, the headless chicken like trading unsurprising given we remain firmly entrenched in this 1.02-1.04 range. As boring as it sounds, I will remain square for now and preserve capital, I just cannot see what will change proceedings in today’s session. Topside we have offers still round 1.0345/50. G’luck!!
CAD – A continued flushout in USDCAD yesterday with more stops being taken out above 0.9950 before EURCAD holding trendline resistance around 1.3000/10 perfectly and some fresh speculative selling of funds out of New York takes us back to 0.9930/20 which is where we have held overnight and open this morning. All eyes now on the Bank of Canada today and instigated by Carneys rhetoric last week people have bailed on CAD longs and certainly looking for a more dovish outcome today. I am not sure if the doves are appeased enough given the recent price action suggesting what is expected and a leg higher above parity would definitely require a lowering of the rate guidance, otherwise I think we could find ourselves back towards 0.9870/50. Square for now and will play it as I see it, some offers building ahead of parity but tone of session reliant on Carney and co. Retail sales up first 13:30 and then rate decision at 14:00. Good luck. Resistance 0.9970 1.0000 1.0080 Support 0.9900 0.9880 0.9820
Scandies – Squeeze in both EURSEK and EURNOK yesterday with positioning the main catalyst in both. The stops we mentioned in yesterdays update in EURSEK above 8.61 came into play in the afternoon with London walking out with EURSEK on its highs for the day. Has managed to stay above 8.60 overnight and think dips will be shallow leading into Thursday. Still like selling rallies in EURSEK back towards 8.64/65 with a stop above 8.70 which is what I will be looking to do ahead of Thursday. A few people pointing towards long CADSEK for this week, think this is a little too exotic for me and plus I don’t think the Riksbank cut but quite like the idea of BoC disappointing the doves. EURNOK rallied into the WMR trading up above 7.41, have taken some profit on our long but still looking to buy the dip back to 7.38/39 leading into next week and month end. NOKSEK finding some support ahead of 1.1600 but not positioned in this for now, for choice like selling rallies back to 1.1650/75. EURSEK support: 8.55 8.52 8.45 resistance 8.66 8.68 8.70 EURNOK support: 7.35 7.30 7.25 resistance: 7.45 7.48 7.50.
Barclays Capital