EUR – Mkt held back towards last few days of 2012 in terms of risk as it awaited the news on the fiscal cliff – We eventually got the deal, in some form, o/n and the mkt has responded positively accordingly. For today looking at how far we can continue to rally topside – 1.3300/10 important resistance topside (dec highs) then 1.3370 – downside expect bids 1.3200/20 then key support is at 1.31400/70 which held on dips in Dec and the Sept/Oct previous highs.
GBP – Happy new year to you. No UK data today. My first thought as I plug in today, is just how thin liquidity is. It’s going to be a case of keep it light to start with. We kick off with the dreaded ‘risk on theme’ on the back of U.S fiscal developments and I suspect some short term USD recycling from Asia as local currencies there have been well bid overnight. Cable has popped out of huge topside resistance at 1.6300 and taken out medium to long term stops up to an amazing 1.6380. That move leaves little to help in terms of liquidity on the day, with order books cleaned out above. Pressure on the USD seems set to continue for now, despite my macro head telling me that cable feels wrong up here. I’m not going to be fighting it for now though. Levels to watch: Support at 1.6300, 1.6270, 1.6220. Resistance, 1.6380, 1.6400, 1.6428 and then medium term daily trend at around 1.6458. EUR/GBP will probably be at the mercy of the USD legs. Support at 0.8100 and 0.8080. Resistance 0.8155, 0.8169 and 0.8190 for now. Good luck for 2013.
JPY – Still continue to like usdjpy higher for the year ahead but with the technicals showing heavily overbought and JPY weakness the only constant through December I prefer not to rush in here rather looking at opportunities to buy dips – 86.50/86.20 support in short term 87.35 then 87.90.
AUD/NZD/CAD – was great to wake up and see AUD finally move more than 50 ticks in the one session, fingers crossed this is a good omen for 2013 after the lacklustre price action we saw in the antipodean space in 2012. Depth and liquidity across all G10 is extremely thin to start the year, unsurprising really though I expect this to improve as the US awakes and the eminis open at 11AM GMT. Books are thin at the moment, we have a slight skew to ++ AUD though with bids kicking in 1.0450 and fairly consistent all the way lower. NZD saw a decent year-end squeeze on Monday, this pushed the cross firmly back below 1.2600 with this 1.2480 level the first important one on the downside for me. Corp selling still a constant theme in CAD space, we saw some good names offloading into the year-end squeeze which proved quite indicative now we sit almost 100ticks lower. Bids kick in 0.9850, we won’t break this though until US come in later in the morning. Happy to sit square here and re-evaluate later this afternoon, no pushing need to be overly active at the moment.
Scandies – Swedbank PMI survey printed 44.6 vs 44.2 cons this morning. The focus is firmly on the USD and ‘risk’ currencies today. Both EUR/SEK and EUR/NOK probing lower but EUR/SEK the most interesting of the two. Whilst sub 8.6000, the downside should sharpen in focus. 8.5500 is short term support right now but another break lower and we open up 8.5000 and then I would expect momentum to increase. Early flows will be key and it will be interesting to see if money managers have the SEK as one of their favoured currencies at the start of 2013. EUR/NOK still confined to 7.3180-7.4000, although downside pressure set to continue.
Barclays Capital