EUR – Strong demand continues for eur and eur x’s with eurjpy and eurchf the standout movers o/n, helping drag eurusd to a high of 1.3404. Seeing some early selling from spec/range guys and order book has selling 1.3410/35 topside so not in a hurry to buy at these lvls currently but the overal scenario post draghi remains the same for me, buy the dips to 1.3310/30 looking for a move to 1.3450/75 before we run into stiffer resistance against 1.35.
GBP – No UK data today. Cable desperately resisting the tow of EUR/USD as EUR/GBP runs higher again, taking out good supply in the low 0.8290’s. The EUR itself is showing no signs of a pullback, as firstly short term and now medium term accounts cover shorts/get long. There maybe some more legs in the move. GBP crosses are in play as safe haven sterling longs head for the exit and a bearish macro picture gets more attention. EUR/GBP now has support at 0.8270 and 0.8222. Resistance at 0.8300 and then daily channel top kicks in at 0.8341 on the day. I tried a short on Friday with a cheap cut and I’ve already written the cheque. It feels like we are back in buy on dips mode. Cable isn’t the play for me but levels: Resistance 1.6172, 1.6180, 1.6206 and 1.6222. Support: 1.6100, 1.6084 and 1.6063.
JPY – Usdjpy continues to climb making new highs at 89.67 o/n. Eurjpy demand was consistent and strong supporting the upmove from friday. Busy data week this week starting with retail sales in states tomorrow and Bernanke speaking tonight adding room for increased volatility. Short term support 89.20 then 88.50 downside – topside 89.70 then 90 key to watch topside. Mkt will fight to remain long into the BOJ meeting next week to see how the BOJ set their stall out early into 2013.
AUD/NZD – Not a great deal to talk about here, the market has put the antipodeans to the side as the focus firmly remains on EUR, GBP and JPY. EURAUD remains topical, 1.2707 the first resistance level (76.4% fib) with range highs up round 1.2810 the next. Books have no real skew – an odd mix of stops and t/p scattered all over the place. Certainly indicative of conviction the mkt has when trading AUD and NZD at the moment – very little! Not expecting much today, I struggle to identify a catalyst that will change the current proceedings until we get AU Employment data on Thursday. Looking to keep it nimble and job tight ranges today.
CAD – The good feeling it would seem is contagious in G10 but EURxxx still dominate and as such EURCAD from1.3050 to 1.3150 on Friday afternoon kept funds supported and a little peripheral to people’s interests. However I think ultimately once this reassessment of European rate expectations has filtered though there is downside room in USDCAD still, we churned through lots of the corp demand down to 0.9820 on Friday but struggled to sustain a move lower with fresh demand for EURxxx coming to the fore. For now staying short and will continue to look to add back towards 0.9860/70 looking for move back to 0.9720. US tinged focus to this week and some Fed speakers today notably Bernanke this evening to keep an eye on. Resistance 0.9870 0.9900 0.9970. Support 0.9800 0.9730 0.9700.
Scandies – Pullbacks very shallow in EURSEK on Friday and despite managing to stay below the 200 dma which today comes in around 8.6470 it feels like if we can take out stops above 8.65 then we should see a quick move to 8.70. EURNOK had a rather dramatic move on Friday, primarily position liquidation with stop loss activity above 7.32 taking us up to 7.38 and lack of the recent NOKSEK demand also aiding the pair higher, actually sitting short a bit of EURNOK with a 7.42 stop, feels a touch overdone and if anything EURSEK is the one that needs to catch up higher especially with the backdrop of last weeks Riksbank minutes. USDscandies approaching some big support levels USDSEK at 6.40 and USDNOK at 5.50, clearly the EURUSD leg the main catalyst for now but a clean break of these respective levels could attract some attention. EURSEK support: 8.55 8.50 8.45 resistance 8.65 8.70 8.73. EURNOK support: 7.32 7.28 7.25 resistance: 7.40 7.42 7.45.
Barclays Capital