EUR – Tried to break out the topside last week at 1.3480/1.35 and failed falling back towards the base of this 1.33/1.35 range – O/n the low has been 1.3326 in Asia and the focus is 1.3300/10 (last week lows 1.3306). A break below here and room to see 1.3250/60 where i think ideal buy zone. Topside 1.3380/1.3410 lvls to watch before that 1.3480 area. With today a US holiday focus is back end of the week. FOMC minutes wed then IFO and LTRO Friday.
GBP – Fireworks for cable last week after opening briefly at 1.5780 and eventually trading a low of 1.5462 before a brief bounce. Mkt sentiment is for weaker STG and supply from RM and Spec a/cs from 1.5650-1.55 has been consistent. On the day with this 1.5460 will be first focus then 1.5380 on downside – topside squeezes from the lows have been limited to 1.5550 so that’s the first sell zone. Eurgbp holds up well despite some wobbles last week. 0.8580 then 0.8550 remain key downside supports – target topside is 0.8680 then that 0.8715 high from January.
JPY – buy dips the name of the game after the mkt was caught offside on Friday, we are again approaching some big resistance levels above here with 94.50 and 95.00 the two of note. Book has thinned out in the wake of the move, some small supply immediately above with the downside clear sailing until we get back below the Friday NY close round 93.50 where we see a fair bit of 2-way action. EURJPY in focus after it traded on 4 big figure handles on Friday’s London session alone – I don’t expect a similar degree of volatility today though with G20 headlines now in the past. This week speculation re: who will be appointed next Governor will be rife, the headline ping pong to continue for some time.
CAD – CAD has failed to unwind the losses it made after weak data on Friday but magnitude of offers to the topside 1.0080-1.0120 in the orderbook and continual corporate supply should act as enough resistance. Sounds like the same old story but a clear range stays intact parity-1.0120. EURxxx were in focus on Friday and EUR/CAD held support at 1.3350 to rally a big figure, but resistance 1.3450-80 should hold for now with clearly defined levels in USD/CAD to the topside. No CAD specific data early week but market will be looking to CPI data and retail sales on Friday as a potential catalyst.
AUD/NZD – still of the opinion that the move higher in AUD was a healthy squeeze in a downtrend, and as such I remain short AUD looking for 1.0150 this week. Fundamentals are poor in Australia, the real economy is struggling and I think the market is only now slowly starting to fully grasp the issue. Book has thinned out, we see small stops below down through 1.0260 with nothing in the way of bidding interest until we get back down toward 1.0220/25. Topside thin until we get back towards the range highs round 1.0375/80, some stops starting to build through this level but I don’t think we get there this week. NZD topical following the sharp reversal as we traded through the range highs at 0.85 figure, those who bought the breakout likely to have stopped out by now though so from here I don’t have any strong views. I expect some resistance in AUDNZD as we approach 1.2250.
Barclays