EUR – ECB day has arrived and we have moved back into the range after a failure at that 1.3140 oct highs yesterday. A week spanish auction started it before lev and spec guys started to cut longs – Looking at today support is this 1.3020/40 zone like to go long there with a stop at 1.2980 for another run at this 1.3140/70 key resistance.
GBP – Trade data at 9:30, BOE at 12:00. I’m not expecting anything from the BOE today but will look to go short towards 1.6100-20 on a risk reward basis over the announcements. The risk being, (all be it small), that they announce some change to QE. Either way, price action in GBP/USD and EUR/USD still looks tired after 3 days of hard work making little topside headway. 1.3040 and 1.3020 levels in EUR/USD should harbour stops below and should we see a position flush out there, cable will follow, especially if we are near 0.8100 support in EUR/GBP.
JPY – ADP/ISM data supportive of usdjpy but real catalyst for the squeeze was the news reports out of Japan that LDP will win an outright majority – On the day looking for usdjpy to be supported now 82.10/20 and see if we can push back towards 82.60/80 – Maybe that we wait for payrolls tomorrow to get further momentum but I continue to think usdjpy will move higher.
AUD/NZD – another strong data print out of AUS, problem trading spot on the back of this is the heavy supply which is is resting 1.0485/00. Seems the world is offering here, we have small supply though nothing which justifies the screeching halt we come to every time we test this level. Clearly price action suggests selling 1.0480, stop through 1.0500 as I expect to see a bit of momentum topside if we can indeed break this figure level above. Downside bids round 1.0430, this should be the first support level on the day. RBNZ the other key focus – whilst they did acknowledge the string of poor data and lowered their inflation forecasts, they were quite hawkish with respect to NZ housing and the pick-up expected from the Christchurch re-build. Certainly wasn’t as dovish as I anticipated, I got stopped out on the majority of my NZD shorts (namely agst AUD) though will leave a stop at 1.2590 for the balance of my AUDNZD long. Book is quite thin, some supply above round 0.8315/20 in the bird with bids in AUDNZD down round the figure.
CAD (0.9922) – 0.9905/10 really defining itself now as strong support with numerous attempts yesterday to break. Good offers in the orderbook remain and every rally continues to be met with good supply from a range of names; leverage, real money and corps all selling yesterday 0.9920-0.9935. Stops remain in the orderbook 0.9890-0.9880. While I still like to sell rallies I think there is an argument to be long against 0.9910 with a very tight stop through 0.9900, as feels like the market is getting very short and is at risk of a short squeeze especially with a barrage of CAD data out over the next two days alongside NFP. CAD Ivey PMI today at 15:00GMT, consensus expecting 58.6 (prior 58.3).
Scandies – No significant data from the region today. Ranges intact, levels the same as the previous few sessions. EUR/SEK selling at the fix yesterday pushes us nearer to downside support at 8.5900 but it’s a game of patience as volumes decrease and interest slips away into year end. Broad ranges, EUR.NOK 7.32-7.40. EUR/SEK 8.5900-8.7000.
Barclays Capital