EUR – Whipping around on a 1.29 handle with a stop run to 1.2972 in asia but still opens up in ldn soft around this 1.2915 lvl. Feels like the unresolved issues in greece weighing on the eur slightly with potential for this to grow during the week. Today with much of NY closed down for the storm and little data i expect a quiet day – 1.2875/80 first support downside before that key 200 day at 1.2835 and range lows at 1.2800 – topside 1.2980 then 1.3030 resistance – already we have offers 1.2950/70 topside so moves above 1.2950 should be capped at least the first time.
GBP – Mortgage approvals, consumer credit and money supply data at 9.30. Economic data release highlights come Thurs/Fri with PMI’s. EUR/GBP seems to be the pair in play still, as cable buzzes around like a wasp in a jam jar, with the USD reacting to equities. Despite heavy price action the cross could not crack congestion at 0.8000-10 and some heavy, good quality RHS flow emerged as we drifted back into the teens. 0.8028-30 is now short term support, (feels like there maybe some fresh interest there) with 0.8020 and 0.8000 further support. Resistance levels 0.8045, 58, 67 are well trodden ground and I think we have room to 0.8080 barring any Euro related tape bombs. Cable is too fickle right now, with the USD leg too loose. Suggest 1.6060 and 1.6020 support, with 1.6110 and 1.6165 resistance. I think the market has now bailed post GDP long positions here. Have a good week.
JPY – Small clearout of downside stops friday to 79.49 low but we saw fresh demand on the dip. Today we hold in 79.30/80 while we await the BOJ o/n. I think with much leaked to the japanese press the market is going to need something extra to really agress to the topside. An extension to 10 tril and 700 bln jpy stimulus package expected – Out of spot longs currently just left with some USD calls for thursday incase the BOJ can do the unlikely and suprise the mkt.
AUD (1.0350) – really not a lot to say, 1.02-1.04 remains the range, trade it until broken. We are picking up decent supply ahead of and through 1.04 figure now, stops only come into play on a clean break of 1.0435/40. Downside bids kick in immediately below, they are fairly frequent all the way to 1.0280. Domestic calender extremely thin this week, today we won’t be breaking any ranges in my mind especially with the US equity mkt closed for the day. Prefer to remain square cash here, I will look to sell round 1.0370/75 on the day.
CAD – With the dust settled on last weeks rhetoric inspired chop fest in USDCAD we finished the week fairly well supported above 0.9960 with some leverage short covering and model buying Friday afternoon despite small uptick in US GDP. Open this morning around 0.9990 just on cusp of 200 dma and important resistance around parity. Should be some more stops above here and a break of this level may drag in the system players as well, think people will look to fade around 1.0050 which given that most other majors not breaking out this makes sense, would like to see EURUSD hold 1.2850 and stocks to hold above 1400 though for me to get back to selling rallies in funds. Orderbook skew though certainly supports a sell on rallies with plenty of RM offers now around between 1.0010/40. Resistance 1.0000 1.0050 1.0100ю Support 0.9940 0.9900 0.9880.
Scandies – Some short covering in EURSEK Friday afternoon took us briefly above the 200dma around 8.7130 trading up to 8.7190 before drifting back to 8.67/66 on the back of local corporate supply. Given the dovish outcome from the Riksbank last week think 8.65/64 should be good support on the day and certainly 8.60/59 will be bought, retail sales at 8:30 should dictate proceeding early on. Clearly if you want to be short EURSEK, which I dabbled with Friday with not much success your stop needs to be above 8.72. EURNOK taken a small breather after a strong week closing above 7.45, very important day Wednesday, where it’s Norges bank, month end and we find out the purchases number for November. For now I think dips will be shallow and I am square myself looking to reload long at some point before Wednesday. 7.43/42 looks like first buy zone but optimistic perhaps, 7.50 should be good resistance and there will be stops above. EURSEK support: 8.65 8.59 8.55 resistance 8.72 8.74 8.80. EURNOK support: 7.42 7.35 7.30 resistance: 7.48 7.50 7.52.
ZAR – Friday saw USDZAR collapse from 8.7750 to 8.6115, saw fast monies cutting their long USDZAR position before we caught real money bids at 8.6150, USDZAR position feels much cleaner, medium term still bearish ZAR, looking to buy dips 8.6500 to 8.6200 with stop below 8.6000.
RUB – RUB opens (at 6 am LDN time due to Day Light Savings) almost unchanged 35.56/31.41. Please be aware fixing is still circa 12-00 MSK time which is 8 am LDN time. Last tax payment for the October – less exporters activity after 3pm msk time. We are better buyers. 35.40 – support for basket.
CZK – A quiet range bound week last week in EURCZK but we stay patiently long waiting a break above 25.00. Corporates are still sitting on the bid on any dip, with the offering interest coming from models and RM (perhaps some re weighting from other EM into CZK). Repo rate announcement due Thursday.
PLN – PLN looked vulnerable all week but came off hard from 4.1630 on Friday. We are still constructive on EURPLN, expecting 4.12 to hold and waiting for a move to 4.18 then 4.21. The flow is considerably two way – so expect today’s moves to be S&P driven.
HUF – HUF is beginning to look vulnerable, although towards 284 remains a decent sell in EURHUF. The market is still long HUF, having not really been tested in last few weeks, and with the S&P looking shaky, dips around 280 should be bought. Base rate announcement due tomorrow (25bp cut expected.)
Barclays Capital