EUR – Its month end day and mkt, myself included, caught short from the failure to break the 1.2990/1.30 area in the last couple of days. While we have seen RM selling, corp and spec demand was strong yesterday providing support on dips to 1.3070/85 area. Right now stops taken out to a high of 1.3163 o/n so order books clean now left with offers 1.3175/30 topside. Still continue to like fading a rally 1.3150/00 ideally with a stop at 1.3250 with mkt post the month end fun looking to position for a dovish Draghi next week.
GBPUSD – Price action a little more constructive, but overall consolidation remains the short-term theme. Real Money supply was a noted pattern on Thursday, and overall the selling has been absorbed well. I remain a committed GBPUSD bear, but if I were try and look at Cable objectively on the day, to buy on dips would have be my bias. Should short-covering ensue above 1.5220 and 1.5250 however, I would then look to reinstate a more notable position from the short side, with more interest to fade the 15330 mark. Expect resistance at 1.5219 and then at 1.5321, with support likely between 1.5125 and 1.5135 followed by 1.5073 – 1.5080.
EURGBP – Is slowly recovering the brutal downward correction on Monday afternoon. From here, I expect buying interest on any dip into the .8600 – 20 band, and have noted Corporate buying outweighing some Leveraged supply in the last 24h. The previous high on the year at .8717 needs to be recovered in order to shift risks back onto the topside, but I am inclined to stay square here for the time being.
JPY – price action following the nomination of Kuroda as BOJ Gov to parliament was a big fizzle, seems the market had this on in advance with USDJPY squeezing aggressively in late NY. Where to today? I think we fade this round 92.70/75, placing a stop above the 21dma at 93.05 initially. Need to be cognisant of month-end, anything can happen and I am usually very reluctant to take positions given the heavy flows going through over the course of the day. Our model is showing a weak buy USDJPY signal. EURJPY not one for the faint hearted, the 55dma held immaculately (again) and it really was all one way post. Book starting to show some signs of life again, we see offers building above with stops kicking in through 93.10. Not a great deal below to get excited about, some small stops through 92 figure for those who opportunistically bought the break yesterday.
AUD/NZD/CAD – Month end has crept up rather quickly and will no doubt bring all the usual madness. AUDUSD breached 1.02 yesterday on the back of some leverage and RM supply however 1.0150 is a big support level and the composition of peoples orderbooks (including ours) feels fairly similar lots of demand between 1.0180/1.0150. Overnight the Capex data did disappoint (-1.2% vs +1% f/c) and AUDUSD went from 1.0225 to 1.0190 fairly sharpish but a short squeeze followed with leverage guys notable buyers via ecomm and voice as we traded back through 1.0230 and up to 1.0280. Not really a surprise this given how many times AUDUSD has sucked people in to sell with momentum. Think more stops now await above 1.03 and for now respect the range and resell 1.0330/40 or buy back towards 1.0200. Corporate month end supply has caught the market lazy long USDCAD with stops on the break of 1.0240 triggered overnight, I expect this month end supply to continue today but equally still like the CAD weakness trend therefore will look to get long below 1.02 if we see it this afternoon, GDP tomorrow certainly the focus.
Scandies – EURSEK is pinging around in a 8.4250/8.48 range at the moment and its getting a little frustrating holding onto this short! I think either way the next 24 hours should see us break out of this range. PPI and retail sales today this morning and I imagine the usual month end buyers will be around as well, certainly will be stops on break of 8.50 and I imagine if we do get through 8.40 this should see us reset in a lower range. Few people getting the old school charts out again in NOKSEK, trendlines being drawn back to the 1970s depending what HB pencil you use coming in around 1.1250/75, people getting long against this so should be stops below, I am short NOKSEK but will be quick to take back if the data disappoints. Last time EURNOK popped above 7.50 locals were notable sellers stops now building on break of 7.51, taken back short EURNOK for now. Norway Retail sales at 9:00 and we find out the Norges bank purchasing amount for March. On a side note yesterday a story circulated regarding a Norwegian May bond redemption, few people saying could be NOK negative, I think net net currency impact will be minimal but of course depends on where the allocations are, May is a long way away for now though! EURSEK support: 8.40 8.30 8.20 resistance: 8.48 8.50 8.53. EURNOK support: 7.42 7.38 7.30 resistance: 7.50 7.54 7.60.
Barclays