EUR – 1.2875/80 continues to provide the key support holding again yesterday in asia/ldn sessions despite the big rally in Italian yields. Saw gd selling from US rm yesterday afternoon 1.2925-40 but it was absorbed well with the mkt short overal from last Thursday post ecb move. We have had a correction to a certain extent with the squeeze to 1.2963 o/n and now with orderbooks cleaner looking at 1.2875/80 then 1.2820 (Base of daily cloud) for support – topside 1.2980/1.3010 has offers and should be a pivot topside. ZEW today provides a chance for some movement but really looks like we stay within range and await FOMC.
GBP – No UK data today. RICS housing survey o/n printed -9 vs cons -7. The sterling market is trading loose, with cable following the Euro’s lead. I was surprised by the move in cable yesterday as we blasted through short term resistance at 1.6065 but was quick to scramble out of cheap shorts through the level. Liquidity is becoming an issue for sure. 1.6100 and 1.6130 really should cap the topside barring any euro positive headline today. Short term support 1.6060-65 then 1.6000. EUR/GBP trading a lower range now but daily/hourly trend support kicks in at 0.8018/0.8035. Congestion 0.8065-0.8085 above. I’m not positioned right now and will wait for a move to the extremes.
JPY – A few stops went through yesterday on the break of 82.20 support but no real follow through with lev and RM names supporting the downmove – The order books pretty clean now until below 81.65/40 stops and some offers stsill topside 82.75/83.00 – Feels still like we stuck in this range 82.00/60 going into FOMC – with exporters on top and still mkt looking to buy dips going into the japanese elections the w/e. – With the move to 82.115 yesterday sarted to get into a long looking to buy more on dips to 81.50 looking for higher later in the week.
CHF – Saw good supply of usdchf from corp a/cs yesterday at 0.9330/40 area but all well absorbed with eurchf back at that 1.2065 area that we rallied from on the CS deposit rates news. We have seen a bounce in eurchf o/n on news that UBS will do similar from 21st dec towards 1.2108 high before settling back down. On the day looking at 0.9310 then 0.9280 as support – 0.9380/0.9410 as resistance – Eurchf has held that 1.2060 now and looking at this decent support now – 1.2135 then 1.2160 still key topside lvls – expect eurchf to be supported now into the SNB meeting on thursday
AUD – Good leveraged supply saw AUDUSD test the 1.0460 level again but fell short of decent stops in the orderbook 1.0450-30, now traded a low of 1.0463 and 1.0461 in the last two Asian sessions. Strong NZ House Price Index and retail card sales data combined with weaker AU business confidence data saw AUNZD make new lows for the month around 1.2540, but was met with some profit taking helping support AUDUSD. Straight AUDUSD likely to be back in focus with the FOMC meeting this week, order book still has light stops 1.0530/40 above recent range highs around 1.0520. Still makes sense to buy dips back down to 1.0460 with a stop below 1.0430.
CAD – All going to plan in USDCAD with a good close around the 0.9870, 0.9840 still the first target where we see profit-taking spread 0.9840-20. The go ahead for the Nexen – Cnooc deal seems to have pulled out some support in the market, and risk now is that market is getting very short and anything USD positive from the FOMC could see a nasty squeeze with stops lurking 0.9910-20. CADJPY still well supported and has more room to the top side, but will wait to buy on dips back down to 83.00 over the course of the week. Remain short USDCAD and will add back to 0.9950.
Scandies – No data from the region today. PPM flow still dominates the EUR/SEK market but it’s a market that is well positioned. We drifted higher as banks bought yesterday but the impact has been subdued as longs take profit.
Barclays Capital