EUR – So early Asia flush out below that 1.3350 lvl that held Friday but we snap back quick. Looking at this 1.3330 as the support again on the day. Rallies still look limited for now and while we stay below that 1.3430/50 area on the topside the pressure is still for a clearout towards 1.3250 again which I think should see us stabilise and I will look to go long again.
GBP – No UK data today. Inflation data tomorrow and the inflation report on Wednesday. Liquidation is the name of the game with large scale selling of EUR/GBP by leverage/real money names at the end of last week. I didn’t expect such a large scale sell off in EUR/GBP and didn’t see anything from either Carney or Draghi to make me change my medium term view of GBP weakness. 0.8430-40 is now key in the cross and technicians see price action whilst above this level to be merely a correction within the uptrend. Cable also got punched higher, taking out stops on its way to 1.5845 but we have settled back to this 1.5775 level and I still prefer running short. 1.5827 and 1.5850 topside resistance again today but I am wary in case of continued liquidation this week. Early flows will be key.
JPY – stuck right in the middle of the range, I am biased to see a flush out lower ahead of some key events later this week with a break of 92.17 (Friday lows) likely to accelerate proceedings. If one is short here you’re stop has to be through 93.10/15, this is the break down level from Friday and should see some decent supply ahead of here. We have continued demand for XXX-JPY on dips, this should support USDJPY for now but keep a close eye on US 10s with a break of 1.93 likely to see a follow-on flush out in USDJPY. Pain through 91.90 and again below 91.50, topside fairly muted unless we can cleanly break this 93.15 level where we see a few shorts starting to scramble. I’ll be selling rallies for now.
AUD/NZD/CAD – quiet night overnight with much of Asia out on holidays, that said the G10 space certainly seemed to whip about with the commodity bloc continuing to weaken. AUD back below 1.03 figure, we see bids down to 1.0260 with stops kicking in at 1.0250. Home loan data was weaker than expected, aside from this no major data points on the horizon this week. REINZ Housing Price Index this evening, typically this would be a non-event for NZD but with Auckland property in bubble territory and the emphasis placed on this by Wheeler it is certainly worth watching this time round. We still have offers in AUDNZD up to 1.2400, a few stops on the break before hitting futher supply above 1.2460. USDCAD continues to grind higher following the employment data last Friday, we open at the first level of resistance round 1.0050 but the book remains thin with some corp supply lurking ahead of 1.01 figure. Still biased to see this edge it’s way north, below parity and I think I am wrong for now.
Scandies – Norway CPI/Producer prices at 9:00. EUR/NOK trying to get back into its old range with 7.3000 support as we struggle to maintain any territory above 7.4500. Flows have been light recently and positioning doesn’t feel that extreme. Look to react to inflation data this morning. EUR/SEK still can’t make its mind up. I favour long SEK on a medium term macro view and look to scale into shorts into 8.6650 for a test of 8.5500. Flows have been predominantly LHS in EUR/SEK but price action is whippy and lacks firm direction.
Barclays