EUR – Whipping about in a tight range of late, the parameters of such defined by the 100 and 200 dma’s at 1.2650 and 1.2808 respectively. I still have a small inclination towards selling EUR, that said my conviction is not strong and I am fairly square here for the most part. Economic calendar quiet for today, the book harbours offers towards range highs at 1.2800 with no real bidding interest until we get back down towards 1.2720. I cannot see the broader ranges being broken today, as such will trade the extremes accordingly.
GBP – No UK data today. Cable finally exhausts itself into demand near 1.5830 and with the general risk on after Friday’s comments. Stops have been triggered 1.5895-1.5920, leaving my order book looking neutral again. 1.5930 and 1.5955 now resist topside. 1.5900 and 1.5880 now initial support below. EUR/GBP has been a factor of the USD legs again. Support 0.8000-10, 0.7967 and then 0.7950. Resistance 0.8060, 0.8077 and 0.80100. I’ve squared long cable positions and look for clues today. I figure I will be playing ranges again, all be it at higher levels in cable.
JPY – The technical’s would tentatively suggest a further bullish extension in USDJPY after closing above the weekly cloud on Friday, but our well informed tech gurus highlight this did also occur in Feb before topping out in March above 83, and with short term market now long and the now eagerly anticipated election still a month away plenty to navigate until then. Still long as a desk and will certainly add back to 80.70/60 on the week which is probably a fairly common strategy so expect dips to be shallow for now. Overnight we saw some good Japanese retail demand for USDJPY and AUDJPY which helped trigger barriers at 81.50 up to a high of 81.59 and then spec and gamma supply entered the fray. Orderbook wise we do have profit taking around 81.70 but then stops a touch higher, think it’s a case of people trying to hold onto their longs for dear life in which should be a quiet thanksgiving week and let’s see if the models are kicked into overdrive. US Existing home sales this afternoon.
AUD – Another emphatic Wallabies victory has seen AUD continue the late NY squeeze with the DXY now back below the 100dma following it’s stab through on Friday. AUD has reverted back to trading in line with equities, intra day correlation between these two was quite strong toward the latter half of last week. Still have a bias toward selling AUD, this 1.0380/85 level has proven sticky in Asia with offers lining up from spot to the figure. I am short here, will add on a rally up to 1.0400. Downside some bids kicking in round the 200dma at 1.0320. NZD remains quiet, we took out most of the stops below the figure on Friday with the market a tad reluctant to re-set kiwi shorts at current levels. AUDNZD whipping about no where, still have a bias to sell this round 1.2770 on the day.
CAD – A brief random spike in USDCAD on Friday afternoon just after the fix in line with a stock inspired rush for greenbacks across G10, not sustained though as those corp offers top us again. Apart from that the pair still struggling for inspiration at the moment, haven’t kicked on above parity over the past week or so and I think the market is a little lazy long, if EURUSD can take out stops above 1.2810 and we see stocks have a good day I think we could see stops in funds triggered below 0.9970/60. Might be worth fading this CAD strength if we see it but clearly top end of the range around 1.0050 proving tricky for now. Resistance 1.0050 1.0100 1.0130. Support 0.9950 0.9900 0.9880.
Scandies – Market certainly wants to be long EURSEK into December with a Riksbank rate cut still expected if not already priced in and a one off well publicised transaction (they always work) to be done also on peoples radars. As previously mentioned ideally would love to be buying EURSEK around 8.58/56 with an 8.50 chop or failing that happy to buy clean break of 8.72/73 which has been nice resistance. Market still long NOKSEK and happy to buy a dip but a breach back below1.1680 I think people will start cutting out. EURNOK bounced nicely back end of last week off of 7.32/30 support but expect a few people to start fading ahead of 7.40. EURSEK support: 8.60 8.58 8.55 resistance 8.68 8.72 8.74. EURNOK support: 7.34 7.28 7.24 resistance: 7.40 7.45 7.50.
Barclays Capital