EUR – So eur unwound to the bottom of the 1.33-1.35 range yesterday on back of weaker eurozone gdp data but we held well at 1.3310/20 zone – o/n the weidman headlines regarding eur not overvalued etc have helped us squeeze all shorts to a high of 1.3394 so the orderbooks pretty clear. Lvls to watch 1.3300/20 downside then 1.3255 – topside 1.3410/15 topped us nicely yesterday on the brief bounce then 1.3450. I pretty neutral for eur today – and happy to play the range. I think interesting to watch more the eur x’s with eurjpy coming to some serious support at 123.00/30 which could impact eurusd if we were to break.
GBP – Retail sales at 9:30. Another day of heavy price action for cable yesterday but flows were more mixed with some profit takers appearing. Still, the backdrop for the UK remains bleak and my economic research gurus are predicting below consensus prints again for today’s data. With the focus away from inflation data a little, these numbers could attract more of a reaction from the market. Sterling sellers are waiting in the wings and I expect supply from 1.5575-1.5600. Topside resistance is well defined in the 1.5630-1.5675 zone. EUR/GBP remains vulnerable to general EUR nervousness but I’m a better buyer on dips 0.8550 down to 0.8500 looks good value.
JPY – short-term trend is in place, for me this remains a sell-on-rallies today with 92.85/90 the first sell zone. Above 93.20 I am wrong, but for now I expect some decent supply on rallies into this weekend. NKY lower, US tsys bid and reports suggesting Muto is the frontrunner for Gov – hardly a combination that will appease those sitting long. Market feels nervous, this nervous energy will exacerbate should spot trade down through 92 figure with some decent pain lurking there down to 91.50. Line in sand in EURJPY for me is 123 figure, below here and we target 120 over the coming weeks in my opinion. Some bids floating in USDJPY down round the Asia lows @ 92.20/25 for now.
CAD – All quiet on the CAD front, a 25 pip range yesterday and it’s a touch sticky around parity to say the least. Still maintain that I don’t particular have any desire to be long ahead of parity/0.9990 and then it’s back to 0.9940/50 support before people look to buy it again. Orderbook wise we got offers around 1.0030/40 but 1.01 remains key resistance. Not really positioned for now, looking to buy a dip on a flush out below 0.9990, EURCAD may provide the catalyst if we get through 1.3350. Some US data this afternoon, Empire manufacturing and IP. Support: 1.0000 0.9940 0.9920. Resistance: 1.0040 1.0075 1.0100.
AUD/NZD – both continue to trade bid, I still view this rally in AUD as a healthy squeeze in a downtrend. Above 1.0430 I am wrong, that said I don’t see any real reason for it to trade there today and will remain short until the level breaks. Doesn’t feel right at the moment, though AUD lately will always push the mkt to the extremes of pain and confusion. We see stops above through 1.0380/85, offers kick in above the figure. Some decent pain below in AUDJPY on a break of 95.00. NZD outperformance I understand, the data continues to improve and justify the hawkish rhetoric we have had from Wheeler in recent mths. 0.8460 support on the day, resistance comes in round the late 2011 highs at 0.8575.
Scandies – A broad continuation of the flow and sentiment we were seeing after the Riksbank, the world and his wife want to own SEK but not really at 8.45 so now everyone waits for a rally that hasn’t come…yet. Really for now if your pockets are deep enough be short add at 8.50 and stop through 8.55 is the game plan. I don’t really have said pockets so will wait for 8.48/50 initially on the day! Still demand for SEK in the crosses as well and we had the perfect storm for NOKSEK yesterday instigated by the Borg and Olsen, Borg highlighting he expects the SEK to remain string for a couple of years and late last night Olsen saying that the Norges has room to cut rates to combat kroner strength. This send EURNOK from 7.35 to 7.40 and NOKSEK from 1.1460 to 1.1400 very quickly, saw some RM buying above 7.40 where we settled into the London close. I think this sets things up nicely for NOKSEK back to 1.12 over the next month or two but I have more conviction in the SEK leg for sure. More than enough interest to sell EURNOK around 7.44/45 for now. EURSEK support: 8.40 8.30 8.20 resistance: 8.48 8.53 8.55. EURNOK support: 7.35 7.30 7.20 resistance: 7.42 7.46 7.48.
Barclays