EUR – Quiet day yesterday that ended by squeezing out weak payrol/italy downgrade shorts from Friday below 1.3000. After the ny high at 1.3054 we haven’t managed to follow through further towards the resistance at 1.3080/1.31 and again that will be the focus topside initially then that 1.3150 which has capped us well in recent spikes. Downside 1.2980 held well yesterday with corp interest on dips before the key 1.2950 support. I continue to like to sell rallies or a break below 1.2950.
GBPUSD – Consolidating, after printing a new low for 2013 on Monday (1.4866). This morning brings the IP release for January, and my hope is that we see a topside surprise, in order to sell GBP at better levels. The current market mood, is one where a positive surprise will be put down to this time series being volatile, whereby a negative surprise will be jumped upon, as more fuel for the bearish fire. I retain shorts going into the release, and would advocate selling any strength into the 1.4920 – 1.4950 band. Very good resistance will be found between 1.4965 and 1.5000 if seen, with support likely at 1.4866 and 1.4803 (23.6.10 low). Client flows in the last 24hrs have been rather neutral.
EURGBP – Has quietly ground to new highs for March. .8765 marks the previous high for 2013, so some resistance will be found close to that level. Meanwhile, .8815 represents the cycle high, with .88845 offering another bullish target (Aug ’11 highs). I continue to expect these grinding gains, with the EUR offering a very slightly better option than the Pound right now. Expect support on weakness towards the weeks lows at .8697, and I would prefer to buy between .8697 and .8710, but remain inclined to focus on GBPUSD right now.
JPY – continues to motor onwards and upwards, the market does feel like it is getting quite long at the moment with hardly a pullback seen since this latest leg higher commenced at 93 figure last week. I am in no rush to buy cash myself, we have a decent skew to sell above 97 figure and with AUDJPY closing in on the big psychological 100 level and EURJPY failing at its first attempt to break 126 figure I think there is sizeable enough resistance above to contain proceedings for now. There is also some bearish intraday divergences (240min charts), so watch a break of 96 figure with this likely to trigger some short-term s/l action. Some bids ahead of support at 95.45 (Friday Asia highs), this should be sticky having held well on the post-payrolls blip. For the most part though the book remains thin below.
AUD & NZD – We are still stuck in tight ranges with flow driven chop intra-day. The only notable flow was a longer term buyer of NZD/USD which took the bird back into the middle of its range. We have food prices data out of New Zealand later tonight but the RBNZ meet on Wednesday night and will be the focus for the NZD on the week. There has been some commentary suggesting a slightly more dovish tone may be voiced. With market position seemingly long of NZD, I’ll look to fade 0.8280-0.8300 pre meeting with a 0.8360 cut. AUD/USD? Well, maybe its worth pricing up some DNT’s.
CAD – A nothing day yesterday really in CAD, some peripheral RM names selling funds out of Asia but was well absorbed overall and1.0250/1.0290 framed us for the day. Few more people pointing towards the IMM data and positioning in CAD which without any real domestic data focus this week will most likely be the catalyst. Market has and is certainly long USDCAD, the payroll low around 1.0235 and Feb month end around 1.0217 should be ok support initially. For me I think its worth buying ahead of these support levels on the day but equally 1.0350 looks like very good resistance for now. We haven’t been back below 1.0200 since we broke through on 22nd Feb so if some black swan type event pushes us below there today I think my desire to buy a dip will have diminished somewhat. Overall though shouldn’t be too many surprises, buy back towards 1.0250. Support: 1.0230 1.0215 1.0200. Resistance: 1.0340 1.0350 1.0400.
Scandies – EURSEK was stubbornly bid in the wake of the poor data on Friday, CPI is next up this morning and it should be a market moving but weak side certainly feels like its higher at the moment with the market long SEK. If we break above 8.35 today on worse data I think we can see 8.40 pretty sharpish, there should still be interest to sell on rallies below 8.42 but after Fridays disappointment I think it would tarnish things for SEK longs on the day. For now im holding onto a EURSEK short for dear life but will be quick to react to the data today. EURNOK steadily bid with in line inflation data yesterday, some more NOKSEK selling going through seems to be putting upside pressure on EURNOK for now, 7.50/51 should be good resistance and people will certainly look to fade EURNOK ahead of here initially. More focus on SEK now though and NOKSEK should lead the way. EURSEK support: 8.25 8.20 8.10 resistance: 8.35 8.42 8.48. EURNOK support: 7.42 7.38 7.34 resistance: 7.54 7.60 7.65.
Barclays