EUR – Well a second fail at 1.3400 zone o/n as eurjpy/usdjpy profit taking hits us back off the highs. Price action would suggest that stops 1.3340-10 zone vulnerable however I still like to buy that dip first off with a stop below 1.3250. Topside a few offers linger 1.3385-10 still so a break of 1.3410 needed to gain further momentum topside.
GBP – Inflation data and ONS house prices today. Sterling still remains back footed, with heavy demand for the cross noted yesterday out of Europe. EUR/GBP though, failed to test the upper level of its daily channel which I have at 0.8344 today and price action has calmed down o/n. Support should be seen this morning at 0.8280-85 and then 0.8250. Cable trades soft overall, in orbit around the EUR/USD event horizon but to break back through 1.6000-30 I think we need EUR/USD to slip below 1.3300 or more heavy EUR/GBP demand. As for the inflation data, the risks maybe a little skewed with the market speculating as to whether Carney will be looking to let the inflation target slip. A low print could bring on another bout of GBP selling, whilst a strong print may see traders shrug their shoulders. Cable levels: Supp 1.6063, 1.6030, 1.6000 and 1.5980. Res: 1.6130, 1.6180 and 1.6206.
JPY – A bit like the previous fail at 88.50 resistance pre/post payrolls, usdjpy hits decent resistance at the 89.60 area and after 2 fails and decent selling from lev and RM a/cs we head lower on a random headline from DJ JAPAN ECON MIN AMARI: YEN THAT’S TOO WEAK NOT GOOD FOR ECON. He seems to have been suggesting a lvl above 100 but the mkt rushed for the exits anyway and suggests a mkt sensitive to long positioning into the BOJ announcement next week. I continue to think 88.00/88.50 provides some decent buying opportunities in the short term and will look to buy that dip.
CHF – we have taken profit on our long cash position overnight in Asia, though still looking to buy on dips and re-establish longs down round 1.2260/50. First support level on the day comes in round 1.2290. We saw a good mix of 2-way flow on the move higher, lev buying dominating for the most part though. Few offers hitting the books round 1.2375/80 now, small bids down round the figure.
AUD/NZD – round and round we go, every mng update is becoming more of a struggle the longer we continue to trade sideways. A few domestic data prints on the horizon for the antipodeans, aside from this not a whole lot of identifiable catalysts to see us finally realise some volatility. I have been trading this 1.2520-80 range in AUDNZD – aside from this remain fairly square preferring to trade the rest of G10 which seems to be moving on decent volumes. No major orderbook skews in AUDUSD or NZDUSD today, we see some decent interest still to ++ EURAUD on dips from here.
CAD – Whoever has the corp interest between 0.9830/10 in USDCAD must be having a whale of a time at the moment, we are still struggling to make any sustained headway lower in USDCAD for now however I am still sitting short and would continue to look to sell rallies between 0.9860/0.9880. Should be lots of stops above 0.9880 and I think if we get above there then we will see 0.9950 so will hold fire on looking to add to shorts if we breach this level. Flow wise we saw some good demand from several leverage players yesterday in USDCAD and some model demand for EURCAD. US retail sales and PPI along with CA existing home sales this afternoon. Resistance 0.9880 0.9900 0.9960. Support 0.9800 0.9730 0.9700.
Scandies – So far the 200 dma which comes in around 8.6450/60 has been good resistance in EURSEK which drifted lower yesterday in line with some corporate selling of USDSEK. Will be a few weak stops below 8.60 but still really favour buying a dip on the day around 8.58/56 if we get there and clear to see EURUSD sentiment still driving EURscandies at the moment. As mentioned yesterday think we can test higher in EURSEK above the 200 dma and then will certainly look to resell it around 8.68/70. Still sitting short a bit of EURNOK which is a grind but expect some of the position squeeze from the end of last week to unwind and for us to fall back to 7.32/30 which should be good support initially, stops lurking above 7.40/41 but no real data impetus any time soon. EURSEK support: 8.55 8.50 8.45 resistance 8.6450 8.70 8.73. EURNOK support: 7.32 7.28 7.25 resistance: 7.40 7.42 7.45.
Barclays Capital