EUR – Topped nicely at that 1.3140 resistance yesterday despite some gd buying in the morning which ultimately failed to take us higher leading to a bailout by spec/cta guys back into the middle of the 1.3000/1.3150 range. Today expect eur to maintain the range while we await the ECB tomorrow – 1.3050/10 should cover it. I long currently from buying the dip yesterday but will sq up thru 1.3050 or sell into any move 1.3110/20.
GBP – Trade data at 9:30. The market has run out of steam for now in G10 space. Cable capitulates ahead of 1.6000 and EUR/GBP seems pinned around 0.8150. I still favour a move lower eventually in the pound and I see more and more research pieces and trade ideas hitting my desk arguing the same. Still, we have moved 3.7 big figures lower in cable and currently trade 40 pips off the low. I’ll look for some kind of rally to add to smalls shorts in GBP/XXX. With so much uncertainty still surrounding the USD, GBP/Scandies and GBP/commonwealth trades are being recommended….makes sense. Levels in cable: resistance, 1.6084, 1.6130 and 1.6170. Support: 1.6025, (hourly rising trend), 1.6010, (2013 low), 1.6000 and 1.5978. EUR/GBP seems destined to tread 0.8120-0.8180 and supply is noted as we move towards 0.8200 for now.
JPY – Nice clearout of the move from start of 2013 yesterday and o/n in asia with mkt trading 86.825 low before bouncing. Nikkei back up again after 2 down days also supportive. The fact we held below 87 and bounced back so quick makes me more convinced that into the BOJ meeting outcome onthe 22nd Jan we should be supported ahead of 86.50 while the mkts wait to be pleasantly suprised by the BOJ action or disappointed. Topside lvl in the short term is here at 87.60 and expect a few stops above here now which would be enough to take us towards 87.90 which should then be a little toppy.
AUD/NZD – Just cannot keep a good currency down. Or up for that matter. The snoozefest rolls on, a very uninspiring start to 2013. Fingers crossed this broader triangular pattern (as identified by our tech team in their Top 10 Charts for 2013) finally breaks, would be great to finally realise some intraday volatility. 1.0520 remains the level, we again tested and failed prior to the retail sales # overnight. Stops will inevitably be placed above, through 1.0530 and I think this has further legs albeit a slow grind. Downside quite thin, some bids round 1.0470/60 but nothing overly material. NZD up against important resistance round 0.84 figure, we see stops above so watch this carefully especially with the indiscriminate early morning buying that has taken place over the past few sessions. AUDNZD continues to grind lower, I am square here with little identifiable catalysts on the horizon to get me excited. Have sold AUD here, not a strong conviction by any means but sticking with the ranges for now.
CAD – Not a huge amount to report from USDCAD it remains in a 0.9840/80 range and initially yesterday in the London session Asian RM selling of funds took us to 0.9840 before US leverage short covering in the afternoon and EURUSD slipping on French downgrade rumours took us back to 0.9880. Stops now building above 0.9900 in the orderbook with fresh offers around 0.9920/40, sorry to sounds like a broken record but still happy fading rallies, bids around 0.9840/20 from corp community need to be filled before we can test lower. Little wobble in CADJPY yesterday but held 88.00 again which is looking like good support for now, this remains a buy on dips and 88.10/20 is your first zone on the day. CA housing starts this afternoon. Resistance 0.9900 0.9970 1.0000. Support 0.9830 0.9800 0.9730.
Scandies – Hands up I got it wrong yesterday in SEK, the minutes were in fact more dovish than people were expecting and with several members calling for a 50b.ps cut and also a market lazy short (guilty as charged) we rallied above 8.55 taking out stops on our way up to 8.5830, we dipped slightly into the afternoon fix but saw more European RM short covering and then managed to close above the 100dma around 8.5725. Definitely feels like we should be supported in EURSEK on the day which is a buy back to 8.55 for now but tomorrows CPI and IP data very important with rates suggesting around a 12/14 b.p.s cut for Feb compared with around 9bps pre minutes. So things could turn around very quickly if that data surprises but for now SEK weakness looks like it will prevail as people readjust expectations, happy to sell extremes though with 8.65 looking like ok level to sell. NOK purely focused on NOKSEK buying with a swiss name very active yesterday pushing us back above 1.1700, EURNOK pretty uneventful but retail sales this morning may kick things into life, offers around 7.34/35 bids 7.28/27. EURSEK support: 8.55 8.50 8.45 resistance 8.60 8.65 8.70. EURNOK support: 7.28 7.25 7.23 resistance: 7.53 7.38 7.40.
Barclays Capital