EUR – Disappointing fail yesterday to break and close above that 1.3480 – a print at 1.3520 unwound by a headline in Bild regarding ecb concerns over recent strength. Today as we walk in ldn have taken stops out 1.3430-1.3385 aided by weaker German and French gdp data. Now we firmly back in the 1.33/1.35 range so key will be what sort of bounce back towards 1.3430 we get and on downside 1.3350 then 1.3325 (Monday Asia low).
GBP – UK data-less today. Sterling continues to trade heavy with little in the way of bounce. Corp demand initially 1.5530-40, now seems prevalent into 1.5500. Is this where we pause for breath? I’m not so sure and certainly price action doesn’t suggest a base. 1.5505 fibo level apparently but I don’t see anything much on the maps until 1.5400 and then the very significant 1.5270-1.5300 support zone. I still favour running short pounds via the USD or SEK, as I like the SEK strength story and the GBP/SEK break of 10.0000 looks significant. The USD for me is a little out of focus and makes the short pound idea cleaner. EUR is a mess and the market feels nervous. A further bout of weakness could take me out of my EUR/GBP long. I’ve squared short cable right here for now but look to sell again as close as 1.5540. 1.5630 is now clear resistance.
JPY – Abe’s case for further easing seemingly received a boost with the weak GDP print overnight, though as expected there was a muted reaction in spot. USDJPY seems to be stuck round this 93.50 level for now, into the weekend I have a bias to see this grind it’s way back above 94.00, though with the mkt now quite long gamma I doubt it will be a fast move. US 10s remain offered (yield > 2% now), this should be somewhat supportive on the day with stops now hitting the books above 93.80 (yest highs). Downside remains thin, little to get excited about until we break 92.80 where we start to see some supply building on the break.
CAD – Funds is struggling to bounce at all at the moment, we walked in yesterday with USDCAD around 1.0015/20 London took it to 1.0040 before the US corporates got involved again as New York came in and sent us back to where we started. Through parity and being long doesn’t make much sense I think. EURCAD looking a little soft and will be more stops through 1.3350 and in USDCAD if we breach parity I think we take a look at 0.9940. Worth selling a rally back to 1.0040/50 first off but really not in focus for now. US jobless claims this afternoon. Support: 1.0000 0.9940 0.9920. Resistance: 1.0040 1.0075 1.0100.
AUD/NZD – the march higher continues, be aware though as the mkt has a tendency to get very complacent and throw in the towel at range extremes (especially in AUD). It was offered as you like earlier in the week, now it is bid to the moon – I have no idea what is going on, but I certainly won’t be going long here. GBPAUD at big levels, a break below 1.4960 is telling though I am long ahead of there. EURAUD just above the previous top of the weekly cloud at 1.2930 (the prior ‘breakout level’), selling in this cross has certainly contributed to the bid tone in AUD. NZD at big levels, a break of 0.85 figure will see a quick stop run with this capping the bird a number of times already. Stops are looming, and with AUDNZD below 1.22 figure it feels like a matter of time before these get done. Some strong data out of NZ overnight, perhaps Wheeler was justified in being hawkish? Time will tell.
Scandies – No cut and nothing really that dovish from the Riksbank sent EURSEK tumbling yesterday, initially sold off from 8.55 to 8.52 before lots of two way went through between 8.50/82, lots of local buyers were at those levels but we were seeing leverage and RM supply. The break of 8.50 triggered some stops and before trading down to 8.4475 which is basically where we open this morning with very little bounce at all. From here I would expect decent interest to sell EURSEK and crossSEK on rallies, GBPSEK only done 40 big figures since Friday!?, in EURSEK this initially means selling against 8.50 adding around 8.52 and putting a stop above 8.55. NOKSEK sold off heavily in line with EURSEK yesterday not a lot seen between 1.1560 and 1.1500, certainly should be offers back towards 1.15 now and makes sense to sell this cross, 1.12 here we come. EURNOK finding some support on the back of the NOKSEK flow but chopping lower over the course of yesterday with some general EURxxx weakness, still not convinced there is as much upside for NOK as there is for SEK so respect ranges leg into NOKSEK with EURNOK around 7.32/33 makes sense. EURSEK support: 8.40 8.30 8.20 resistance: 8.48 8.53 8.55. EURNOK support: 7.33 7.30 7.20 resistance: 7.40 7.46 7.48.
Barclays