EURUSD – Cyprus still rumbling on, and not for the better, throw in weak German and French PMI’s and eurusd seems to be defying gravity by hanging around this 1.2880/1.2900 region. Still corp buying dominates and provides support ahead of this 200 day m.a at 1.2880. My bias is still for lower but mainly on weaker data rather than Cyprus. 1.2880 then 1.2844 (previous lows) key downside – topside 1.2960/80 interim resistance topside but ultimately 1.3020 key. above there I would sq shorts and reassess. IFO today to throw in some added volatility, only concern for short positions is will mkt want to square into the weekend as Cyprus comes to a head, or risk a gap open higher on resolution.
GBPUSD – Continues to threaten the pivotal 1.5200/20 band. For the time being I am square, but I am looking for opportunities to be long, and expect the Pound to start doing better. From a technical standpoint, any close above 1.5220 suggests 1.5424 is possible (38.2pcnt retrace of the years losses), and any weakness into the 1.5100/30 will likely encourage Spec demand. Since the topside surprise in UK Retail Sales, Real Money buying has been the theme in terms of client flow.
EURGBP – Attempting to break below the recent range, with .8445 representing the next area of support. I am short EURGBP, risking .8535, attempting to take advantage of the better UK newsflow this week, and the vulnerable technical setup. Selling interest should be found initially on the approach to .8520, with bids emerging towards .8445 and then .8391 (24.1 low). Real Money selling has been the most interesting flow in the last 24hrs, and I do note a bearish tilt to my order book today.
JPY – For a mkt that was long and expecting something more the Kuroda and Iwata press conferences did little to help. The fact we couldn’t retrace on their headlines back above 95.70 proved key. Ultimately i think they deliver in April but for now with mkt taking some risk off the table i think bias is for a drift towards 94.00/40, which is dominated by buying. We saw some decent repatriation between 95.00/95.30 yesterday towards the end of day and for now that also weighs on mkt. 95.00 then 95.70 lvls topside 94.00/30 support and the buy zone. Happy to rebuy usdjpy towards 94.30 on the day. For now just left with some upsi
CHF – EUR/CHF continues to be well supported 1.22/1.2185 but with lack of resolve from Cyprus, could come under pressure. Stops likely to be below the early-week low of 1.2167 where a lot of accounts used the opportunity to get back into longs after the nasty gap on open on Monday. Below that the February lows at 1.2118 become the next target where we house more demand in the orderbook. USD/CHF remains well supported against 0.9420/10 which we tried and failed to break on Wednesday, then have small stops in orderbook below the March lows at 0.9379.
AUD & NZD – Stops were taken out yesterday in both AUD and NZD. 1.0415 was the break up level in AUD/USD and 0.8310 in NZD/USD. The moves were helped with EUR weakness and fresh selling of EUR/AUD sees the pair close below its 200 dma currently at 1.2416. Support here though appears at 1.2330 (hourly channel) and 1.2133. I think AUD/USD will now struggle to get back on a 1.03 handle but also felt stretched as we checked out 1.0455. I think we can continue to grind higher next week and look to buy near 1.0400, risking 1.0360. NZD/USD looks set to consolidate after clearing the market out of shorts. Suggest 0.8310-0.8360 on the day.
CAD – Retail sales beat expectations very slightly (+1.0% vs. 0.9%) but not enough to rock the boat and for now USD/CAD sits in a 1.0190-1.0280 range. With Cypriot issues still unresolved feels like the top end of the range could come under pressure and I’m happy to buy dips around 1.02/1.0215 with a tight stop through 1.0185. EUR/CAD has held support well around 1.32 a couple of times this week, would expect to see stops through the March lows around 1.3170 which coincides with some trend line support from the Dec and Jan lows, then looking to target 1.3070 and 1.3030.
Scandies – Norwegian unemployment rate at 9:00. We still trade familiar ranges set this week. I still favour short EUR/SEK with a stop through 8.4000-4200 zone but look to buy the dip to 8.3200 to reduce but maintain core short. EUR/NOK seems happy to trade above 7.5000 in its post Norges higher range, despite a fresh wave of NOK/SEK buyers yesterday from around 1.1040. 1.1000 though is still a key level with stops waiting below.
Barclays