EURUSD – So corporate buying strong again yesterday but the demand all filled as mkt got increasingly concerned on how things would play out in Cyprus – today we wait on this again too see if Europe or Russia step up to sort this issue out. While we traded a low of 1.2844 late London and closed around the 200 day it wasn’t exactly convincing so these lvls are the focus downside (200day 1.2876 today) Topside 1.2930 /50 key resistance. After some decent buying from a variety of different sources today on the LDN open I have reduced shorts looking to sell again 1.2930/50 or back below 1.2890 (Asia highs).
GBPUSD – Some relatively tight ranges thus far this week, but that is highly likely to change today, given the wave of UK information set to emerge. I am going into these events with a modest short position, confident that any outsized move is still likely to come on the downside. Positioning here has been much reduced in the last week, and Fast Money accounts are highly likely to re-establish shorts, should any GBP negative information develop from the MPC Minutes or the 2013 budget. 1.5059 marks the low on the week, and below there, a major band of support will be found between 1.4965 and 1.5000. To the topside, selling interest will initially be found between 1.5145 and 1.5160, with the major resistance located between 1.5200 – 20 (series of failures in Feb and early March).
EURGBP – Had been gyrating close to the .8570 breakdown level for most of yesterday, before some very heavy 4pm fixing supply, saw a low of .85055 traded. The short-term path of EURGBP is highly uncertain, and for now, I prefer to operate flexibly within an .8500 – .8600 range. A close back above the .8570 mark would be required to negate the short-term risks on the downside, with Real Money accounts showing a persistent interest to sell EUR crosses.
JPY – Last couple of days very much a function of eurjpy and risk however both days after some decent selling we have managed to maintain closing lvls in NY above 95.00. Today I bgt the LDN open at 95.15 with a stop at 94.70 looking for a push higher towards 95.75 again. As mkt looks towards FOMC later and the possibility of an emergency meeting being called with the New BOJ governors in later tonight in Japan.
CHF – EUR/CHF succumbed to the big bout of EUR selling yesterday afternoon making new lows at 1.2167 but we saw good option related demand off the lows, where a lot of people will have been trying to reinitiate longs after the nasty clearout on the Asia open on Monday. USD/CHF remains supported for now still looking to test payrolls lvls at 0.9570 but CHF could come into favour again if Cyprus struggles to find a solution in the near term, in which case support in USD/CHF through 0.9420 then 0.9390 could come into play.
AUD & NZD – Contracting ranges seem to dominate these currencies as the focus remains on EUR, GBP and JPY. Corp type demand on dips to 1.0330-60 and lack of momentum through 1.0400 set the tone. I think AUD/USD will stay bid and eventually pop into a higher range, underpinned by fundamentals and flow and now shrugging off changes in risk sentiment. NZD/USD had a look at the lower end of its recent range o/n trading a low of 0.8213. I still favour shorts here and my Asia sold a very large amount for a good real money account. We struggle to regain pre RBNZ levels at around 0.8270 but lethargic price action has probably bored people out of shorts. NZ GDP at 21:45 maybe the catalyst for the move I am waiting for-a test of trend line support at 0.8100. My research is calling for a below consensus print of +0.6% vs cf +0.9% QoQ.
CAD – USD/CAD rallied yesterday after another poor Canadian manufacturing sales print (Jan -0.2% vs. 0.9% con) but held resistance well 1.0280/85 where we filled some corp. offers. This move was further buoyed by good USD demand as European issues continue to dominate combined with strong US housing data. Next resistance in USD/CAD comes in around the years high at 1.0343. On the downside I’d expect to see stops through 1.0230 before we hit some support at 1.02. Out of focus but worth mentioning it is the Canadian budget tomorrow which Fin.Min Flaherty is promising will include measures to help Canada’s struggling manufacturing sector.
Scandies – No data from the region today. Similar complexion all week, with EUR/SEK and EUR/NOK range bound. 8.3200-8.3600 all week in EUR/SEK but I still favour owning SEK. 8.4000 is the topside level to risk and will scale into shorts again above 8.3500. EUR/NOK should struggle to get back below 7.4700-7.4800 barring a EUR specific shock and 7.5600 is the level above that needs to be taken out for further gains. I think the market still runs long of NOK/SEK and stops will be lurking sub 1.1000. Something to keep an eye on.
Barclays