EURUSD – No follow through on the move lower in Asia yesterday – some heavy corp demand stemming the downward pressure and ensuring we held well above the 1.2880 support lvl. The resultant squeeze to 1.2995 at the end of the ldn session I think cleaned the decks of weak shorts for the day ahead and now we await fresh news on outcomes in Cyprus and have ZEW data at 10am. Short term resistance remains this 1.2980/1.3000 and I think only back above 1.3020 do we see further short covering – while we remain below looking for a fresh move back through Asia lows at 1.2930 region towards 1.2880 – I remain short from yesterday and have moved my stop to 1.3020.
GBPUSD – Trapped in a 1.5060 – 1.5160 range for the time being, as we await the weeks major UK newsflow. I am holding a very small short position, which I intend to carry into the budget tomorrow, but on the day, flexibly trading the range seems the favoured approach. 1.5200/20 remains the major resistance overhead, and the area that I do not want to see recovered if the bear case is to remain intact. To the downside 1.4965 – 1.5000 marks an equally important region, and if lost in the sessions ahead, new lows on the year should be expected. Flows neutral in the last 24hrs.
EURGBP – Hovering around the neckline of the well-advertised head and shoulders pattern (.8570). I have no strong bias here right now, and await a clearer picture from the European side of the equation. Expect buying interest towards the Asian low seen yesterday (.8531), with selling likely towards Mondays Asian high (.8598), and then at .8619 (6.3 low). Corporate selling a small theme in the last 24hrs.
JPY – Amazing resilience in the face of the general risk wobble yesterday after some decent cutting of long positions in Asia. Usdjpy went straight up from the ldn open at 94.35 with some heavy buying from Japanese banks. I think the speed at which we rallied back above 95.00 is a positive for usdjpy and now if we can consolidate this position i expect a move back towards the highs at 96.70 in the next week. A few issues on the horizon, as still vulnerable to Cyprus issues and also with the new governors getting in officially tomorrow, to a market possibly expecting a emergency meeting. For now support is 95.00/10 then 94.75 topside resistance Asia highs at 95.75/80 then 96.10.
CHF – After a nasty clearout of eurchf longs in Asia on the open we hold well and like eurjpy come roaring back. Helped in no small part from SNB comments regarding negative rates. For now we in a 1.2210-1.2290 range. In usdchf we continue to stay supported on dips to support at 0.9390 and while we stay above 0.9375 we look for a further test higher towards those payrols lvls at 0.9530.
AUD & NZD – The RBA minutes gave a balanced view, with little deviation from previous releases and AUD/USD was unmoved on the release. Flows have been light of late and risk on/off sentiment has had little effect. 1.0330-1.0420 has contained price action since the move higher on the 14th and I expect the 1.0300 tech support level to remain tough to crack. The only notable flows have been corp buying of AUD and is enough to keep us in bid mode. NZD/USD should be lower in my mind but stays stubbornly above 0.8200. I have already seen shorts lose patience with the trade and head for the exit. IMF headline yesterday that they perceive the NZD to be 15% over valued had no effect either. GDP data tomorrow night will be eagerly awaited and should see the NZD move on an out of consensus print. Bad news here and surely we have to trade towards 0.8100. If not, I’ll throw in the towel. 0.8310 resistance-0.8215 support for now.
CAD – highlighted levels remain intact in USD/CAD despite seeing almost exclusive selling from real money and corporate accounts yesterday in the 1.0210-30 region. 1.02 is first support then 1.0160 where we have some demand in the orderbook. On the topside 1.0280 remains key resistance where we have good supply for a number of different accounts. Market still very much focused on Cyprus and as such EUR/CAD could turn into key driver for USD/CAD, where it feels like the market has some longs on which through 1.32 (initial breakout in Jan) could be squeezed out.
Scandies – No data from the region today. Ranges a little subdued as we await domestic data from Norway on Friday, (unemployment) and Sweden on Tuesday, (PPI). In EUR/NOK, I expect us to slowly trade lower ranges, with 7.5250 topside resistance for now and 7.47 supporting. EUR/SEK should also be vulnerable to slip lower again with 8.4000-8.4150 key tech resistance only briefly tested. I run small short and will add if we see a blip higher. 8.3550-8.3600 will probably be enough to resist a move higher and 8.3200 is mild support. Flows have been light.
Barclays