EUR – Choppy is the best way to describe eur price action recently and yesterday no different. Support from corps and longer term names at 1.30/1.3030 provided support offers from spec and lev cap us for now at 1.3090-00. Stops are on the books 1.3110-30 topside if we do see a pop, while bids still remain 1.3000/20 on downside – for choice prefer to sell rallies still.
GBP – No UK data today. The 1.5270 level in cable is becoming less important as price action treads up and down through it. After trying the downside and struggling below 1.5220 twice, maybe we’ll probe the topside today. 1.5380 and 1.5412 are the levels to watch. I tried running short but have chopped my position out this morning. I think there maybe other shorts out there post the poor retail sales data that could get caught in the JPY cross/firmer equity trap. EUR/GBP -more at the mercy of EUR/USD and general sentiment checking out hourly support at 0.8532 as I type. Next support 0.8500. Resistance 0.8560 and 0.8575.
JPY – The wobbly start to the week with the 95.80 low starting to look more like a capitulation move and since then usdjpy has held in extremely well in the face of weaker stock mkts. Today, after again holding 97.90/98.00 in ny, usdjpy responding to comments JAPAN FINMIN ASO: JAPAN FACED NO OPPOSITION AT G20 TO ITS MESSAGE THAT ITS MONETARY POLICY IS AIMED AT BEATING DELATION – and rallying through the highs at 98.50 to trade 98.91 so far on the day. We saw decent selling into 98.00 area from lev and model a/cs in ny but support remains and a close above 98.50 today i think sets us up nicely for a run back to the 100 key resistance into the BOJ meeting next week. Orderbook light topside ahead of resistance at 99.30 and only starts to get interesting with 2 way 99.80-100.50. Downside few bids 98.00/30 before stops below support at 97.80-50. We remain long usdjpy spot and through options targeting 100 and ultimately 102 next week.
AUD & NZD – Equities bounce back and USD/JPY-JPY crosses trade super bid on the open. AUD and NZD sellers were about again yesterday looking for a move lower in stocks which never materialised. 1.0280 setting up as support now in AUD/USD with 1.0400 resistance on the day. Feels like we’ll try the topside after failing below. NZD/USD once again remains stubborn and shorts are bound to get frustrated. 0.8510 topside resistance could get tested today. Focus on JPY, equities today.
CAD – Inflation data today out of Canada hoping to move things along after the BoC this week. We have consolidated above 1.0200 for most of this week and our volume data suggests an up tick on these rallies highlighting increased investor desire to still be long funds. Orderbook composition still very much the same, offers ahead of 1.0300/50 which I think will offer stern resistance at first go most likely to be corp client base and then people hoping to pick up usdcad emerge around 1.0180/90. All about CPI this afternoon, buy it back to 1.0200 pre 13:30 or play it as I see it over the data. Support: 1.0200 1.0150 1.0080. Resistance: 1.0250 1.0300 1.0350.
Scandies – Both EURSEK and EURNOK continue to trade in a very bid fashion with clearly the dust still settling after the Riksbank. US names were good buyers of EURSEK and USDSEK again yesterday pushing EURSEK through the 100 dma and 200 dma around 8.5050/8.5150. A few Borg comments yesterday saying the government is a bit worried about strength of the kroner also aiding some of the support for EURSEK and crossSEK, despite the clear bias of RM and model buyers since the Riksbank yesterday was the first time we actually saw some sellers peep above the parapet and I think we are due for a small correction given how far we have come so I am sitting short today. That being said there has been a decent move in rates expect people to want to buy the dip around 8.46/47 initially but for now as long as we below 8.55 will stay short. The grind of EURNOK higher has surprised me somewhat, I certainly liked it higher but thought we wree due a rapid correction as opposed to this steady incline, haven’t had a chance to reload longs since taking profit on Wednesday, similar to EURSEK I think this 7.61/63 level should be ok resistance for start so will wait for 7.55/53 before I reload longs. EURSEK support: 8.45 8.41 8.35 resistance: 8.55 8.60 8.65. EURNOK support: 7.55 7.52 7.47 resistance: 7.62 7.65 7.70.
Barclays