EURUSD – A relief rally o/n in asia as the headlines said ‘deal agreed’, although still a lot to be done. I not a massive believer in the upmove and feel the spike o/n has cleaned the decks of those who faded the spike to 1.30 friday and left tight stops. Happy to fade a move 1.3050/1.31 wrong now above 1.3150. Seen some lev/spec selling in the early ldn move lower 1.3020-90 and support now is 1.2960 short term before 1.2880 on the downside. Orderbooks cleaned until bids 1.2875/00 downside or selling 1.3060/1.3110 topside.
GBPUSD – Touched as high as 1.5280 in early Asia, and should continue to find very good support in the 1.5200-20 band for now. My sense is GBPUSD has now broken to the upside, and further targets of 1.5321 and then 1.5424 will now begin to come into focus. 1.5189 was the low traded immediately after the Fitch headlines late on Friday, and those of a bullish mindset will not want to see this area lost in the very short-term. I am holding a long position, and expect grinding gains into the middle of this week. Flows have been rather neutral in recent sessions, and my order book does not offer any obvious clues either for now.
EURGBP – Reached .85575 overnight, but overall is trading in a rather rangy fashion, between .8485 and .8560. I am square here for the time being, having cut a short position on Friday. More range-trading is likely in the short-term, but for choice, I would advocate selling rallies towards the .8560/75 band. We have been better buyers of EURGBP in the recent past, on behalf of the Real Money community, but flows remain focused on GBPUSD overall.
JPY – As we come into the homestretch of Japanese year end we continue to see repatriation dominating any moves to the topside in usdjpy. Started in middle of last week and remains the theme for now. Considering the selling it holds up remarkably well, however this week will be critical. 94.00/30 remains dominated by buying on the downside and support lies 93.80/94.20 region – topside 95.00/10 key short term resistance and a move above there needed to unwind this mini downtrend. Much will depend on year end/month end flows but expect dips post Thursday to be bgt as mkt wants to be long into the first BOJ meeting of April on the 4th. So for now playing usdjpy by buying dips to 94.00/20 with a 93.75 stop and playing against that resistance at 95.00/10 as we did Friday.
CHF – USD/CHF ran stops below the March lows at 0.9379 on Cypriot deal news while EUR/CHF remains well supported 1.2185/1.22. Next level on the downside in USD/CHF is the lows from this morning at 0.9351 which was also the same region as lows at the start of the month, where we house some leveraged demand.
AUD/CAD/NZD – AUD/USD continues the grind higher and stops loom just above through 1.0470-90, and with risk buoyed for now by the Cyprus deal feels like we can test 1.05 but happy to fade any rally 1.05-1.0530 (contracting range highs) risking 1.06. To the topside in AUD/USD we have more stops through 1.0540 and above there run into a host of resistance 1.0570-1.06 which capped us multiple times back in January. NZD/USD has held the breakout level around 0.8310 well, now looking to test the highs towards end of Feb at 0.8417 and tech resistance at 0.8450 which was previous trendline support. If AUD/USD can run stops through 1.0480, I think you can see a good opportunity to sell AUD/NZD against downward trend channel resistance around 1.2580 with a stop above 1.2640. USD/CAD still out of focus while Eurozone issues remain at the fore. For now we still hold in this 1.0190-1.0280 range, where I continue to favour a test of the topside while Canadian data continues to underwhelm relative to its neighbour.
Scandies – Norwegian unemployment slightly worse than expected on Friday which for now keeps EUR/NOK within post Norges 7.53/7.57 range but on tech levels USD/NOK now testing trendline support off mid-Feb lows around 5.80, a break of which could open up some lows towards 5.68/5.65. Still favour being short EUR/SEK but took back my short on Friday at risk of Cypriot deal which has now come and once again looking to get short at better levels back towards 8.4620 (good support in Feb) with a stop above 8.5025.
Barclays