EUR – Washing around at the lower end of this recent range 1.30/1.3150 – European PMI’s likely to dominate this morning with many suggesting weaker numbers will lead to action from Draghi next week. Levels to watch downside 1.30/1.2980 before the 200 day which is now at 1.2937 – topside 1.3075/80 has capped us in short term so far this week then that 1.3130 topside – will go into the pmi’s with a short in euro looking to add on a break at 1.30 target that 200 day at 1.2937 – topside wrong in short term above 1.3080 but ultimately 1.3130.
GBP – Public finances at 9:30, CBI trends at 11:00. Cable remains stubborn and I run short but 1.5200-20 is like a sponge, soaking up supply. 1.5300-20 represents good value for shorts but I think last nights pop just shy of here may have been enough. GDP on Thursday is the key event for the pound this week and until then we will trade with general sentiment, which feels weak. EUR/GBP a little tricky as EUR/USD struggles for direction within 1.3000-1.3150. 0.8500-75 could well define the range pre GDP.
JPY – A very disappointing fail in LDN at that 100 resistance level topside – never really challenged yesterday as profit taking led us lower. O/N weaker China data has seen us take out the support at 98.90/00 but we holding so far at 98.50 – Orderbook clear of stops in short term and I expect 98.00/20 to hold initially on downside – unless stocks get hit aggressively and a break at 97.80 opens up a move back towards 97.30 – topside 99.00 then 99.40 resistance before that key 100 level.
AUD & NZD – Antipodeans remain soft as China data continues to disappoint and the SHCOMP performs badly vs other equity indexes. AUD/USD is trading just above important 1.0200-15 support, a break of which should yield 1.0150. NZD/USD finally stays hit and we are testing support at 0.8379 as I type. Stops will no doubt be sitting below there but the next level of support emerges at 0.8354. I still can’t get too heavy on the break selling plan and prefer to run small short adding to bounces-despite them being shallower in nature. AUD/USD core short, looking to add 1.0350 and 1.0380. NZD/USD should be a sell at 0.8395.
CAD – Still seeing RM demand for funds out of the US as we continue to consolidate above 1.0250, our technical gurus suggest that this coiling over past few sessions points towards an extension higher. Still maintain there is lots of wood to chop between 1.0310/50 just ahead of the yearly high so far but we have Canadian retail sales data today, poor China data overnight so still more commodity weakness lower growth type catalysts out there that should be supportive of funds. Entry levels around spot at 1.0270 do not seem too favourable however so trying to sit patiently for now and look for a pullback to get long sub 1.0240. Support: 1.0250 1.0200 1.0150. Resistance: 1.0290 1.0300 1.0350.
Scandies – Some board member musical chairs yesterday with Svensson leaving the Riksbank citing lack of support for his policies actually lending a short term bid for SEK given his clear dovish stance. SEK couldn’t sustain this bid tone though with EURSEK having a quick look below 8.50 before bouncing back then selling off into the fix inline with some decent supply of NOKSEK filtering through but again holding 8.50 support. The ramifications of Svenssons absence from the next Riskbank and the potential they do it with just four people could still prove important but for now people still happy to be buying EURSEK and crossSEK on any pullback. Swedish Employment data at 8:30 though. EURNOK broke up above recent range highs above 7.62 yesterday but stalled ahead of 7.65 this was partly aided by Olsen talking about inflation worryingly low from a central banks point of view which is in line with his recent rhetoric. NOKSEK also took a bit of a belting after those comments and more stops await below 1.1080/90. I think there is certainly more room downside for NOKSEK in medium term but short term implications for EURNOK more unclear. Locals buying yesterday and people not particularly got this on in the size they want. Rather be buying it back to 7.60. EURSEK support: 8.47 8.41 8.35 resistance: 8.55 8.60 8.65. EURNOK support: 7.55 7.52 7.47 resistance: 7.65 7.70 7.75.
Barclays