EUR – Awash of any real direction or impetus in the headline pair for now, 1.3020/1.3150 framed us for most of last week with lots of bullish recommendations circulating with EURJPY above 130 and certainly with seemingly an insatiable demand for crossJPY and speculation surrounding the capital outflows from Japan it was a compelling argument. The price action in EURUSD though couldn’t quite support these sentiments and now feels like we test lower end of this range around 1.30 before we can go higher. Orderbook has bids between 1.3030/20 and then stops below 1.3000 and a few range players offering around 1.3150/60. ZEW and CPI tomorrow hopefully add a bit of spice but devoid of any real European focus this week.
GBPUSD – Peaked at 1.5412 on Thursday, just ahead of the technically significant 1.5424 mark. I reinstated a short position on Thursday and from here would advocate adding on strength into the 1.5375 and 1.5425 band, and then again between 1.5475 and 1.5525, ultimately risking 1.5610.The pattern of my GBP flows has quite clearly shifted to the sell side since Friday morning, and I would expect offers to re-emerge on any meaningful uptick. To the downside, the next area of support will be the low from last Tuesday, 1.5249, with a close today below 1.5312, likely to encourage the bears.
EURGBP – Remains sidelined for the time being. I am square here and for choice, would advocate buying between .8470 and .8500 in the early part of this week. Client volumes have reduced to very low levels, though the ongoing pattern if anything, is Real Money supply vs. Corporate demand. Expect selling interest on the approach to Wednesdays .8560 highs, with a close above .8575 needed to suggest a shift into a higher range.
JPY – we got the dip we were all hoping for, I have bought it here at 98 figure but will leave room to add more below 97.50 with a stop at 96.50. Tight trading parameters are not conducive to profitable trading when you have 1m vol north of 13 and realising every bit. I am trying to widen my macro parameters, whilst jobbing this in smalls each day as the volatility is creating a lot of intraday opportunities. Book sees stops below 97.50 (overnight low at 97.55), before running into bids ahead of 97 figure. 96.70/80 remains the key level below for me, this was round the Mid-March pre-BoJ highs and should serve as decent support for now. Topside really is quite thin, some supply building as we approach 99 figure. EURJPY support round 127.70 (former range highs), we breached this briefly overnight so a break of 127.50 clears the way for a sharper move lower.
AUD/NZD – Big pullbacks since Thurs/Fri highs against the USD in both of these. The Gold price seems to be leading us lower and the fate of the antipodeans may well depend on whether we break tech levels at 1430 below or 1530 above there. Weaker China data also weighed as leverage names sold AUD/USD o/n. From here it feels like we trade general sentiment, keeping a close eye on commodities/equities but I have to favour buying these dips. Levels in AUD/USD: Support 1.0415, 1.0372, 1.0350. Resistance: 1.0474, 1.0500 and 1.0518. NZD/USD support: 0.8475, 0.8450 and 0.8395. Resistance: 0.8537, 0.8558 and 0.8580.
CAD – Position capitulation the name of the game in funds towards the back end of last week where we saw some very good selling form a range of different names between 1.0120/1.0080, the corporate world was very grateful for this dip and was scooping USDCAD below 1.0100 before Gold decided to (s)melt on Friday and also overnight with Asian bourses trading soft. Seen some leverage demand for funds above 1.0140 overnight, I expect 1.0230/40 should be good resistance first off this was the high from payrolls earlier this month, will look to sell some USDCAD around 1.0230/35 if we see it today. I think the corporate interest is still lurking a bit lower but for now struggle to see us below 1.01 unless we see a big turnaround in stocks and gold. Support: 1.0140 1.0080 1.0000. Resistance: 1.0200 1.0230 1.0300.
Scandies – EURSEK ticked a bit higher in the New York afternoon on some RM profit taking, seems to be good interest to buy EURSEK between 8.30/27 for now with Riksbank looming on Wednesday. I still think there will be interest to sell EURSEK above 8.40 from more medium term focused players and as long as we remain below 8.45 I am still happy to be selling EURSEK on rallies. EURNOK struggling at the moment to overcome 7.52 resistance despite some of the data negativity from last week. I am still happy to sit long against 7.45/44 where there is still interest to buy EURNOK, more focus back on NOKSEK this week with the Riksbank still rather be playing this from the short side ahead of 1.1200. EURSEK support: 8.30 8.25 8.18 resistance: 8.38 8.42 8.46. EURNOK support: 7.45 7.42 7.40 resistance: 7.52 7.56 7.60.
Barclays