EUR – Continues to chop about in this 1.28/1.30 range, with RM/Lev selling the last times we traded to 1.2980/00 lvl while corp names remain buyers on dips to 1.28/1.2830. Limited data today with only US consumer confidence of note – Expect a 1.2880-1.2950 range initially.
GBP – GBP/USD sits comfortably in a 1.5010-1.5170 range for now and we continue to sit small short of pounds, happy to add on any rallies towards to the top of that range. The market continues to sit short of pounds and expect to see a continued ‘sell on rally’ approach from our clients. Flows in EUR/GBP continues to be skewed towards buying and I am happy to buy any dips 0.85/0.8520, 0.8516 being the top of the recent range which contained the cross for over a month prior. A fairly light data week ahead with CBI distributive trades tomorrow (11:00LDN) probably the pick of the bunch.
JPY – Short term mkt has been cleared out the last few trading days in this 100.66-102.59 range, but after 3 painful days for those longs on the Nikkei we see a stabilisation and bounce with usdjpy duly following. With 100.66 (Friday low ny) and with Asia and ldn yesterday holding 100.70 region before the bounce to a 102.06 high in Asia today, it feels like we have found that short term base below 101. I think we look at 101.60 as a pivot today in the short term, while 102.20 (exporter offers) then 102.60 (Asia highs Thursday last week) remain topside focus – A clean break of 102.60 would give momentum back to the topside out of this recent choppy range but until then play buy dips against 101.60 then 100.80 with a stop below 100.00.
CHF – Corp sellers yesterday dominated in thin mkts sending usdchf briefly below 0.96 and eurchf to lows around 1.24, however once the states got in we rally back quickly and have continued higher in Asia. Like usdjpy, usdchf has managed to form a short term base around this 0.9580/0.9600 area and while we remain supported there I continue to think the bias is for higher towards 0.9840 (last weeks high) and towards parity – eurchf back into the sell zone around 1.2525/50 area before that old pivot high at 1.2570 and key resistance at 1.2650
AUD & NZD – JPY/Nikkei moves seem to be the key driver of AUD and NZD for now. The two currencies against the USD maintain recent ranges with bounces limited. The only think that stands out for me is the break lower through 1.1934 in AUD/NZD. That level should hold any topside exuberance and we target 1.1850, the 61.8 fibo of the whole 2008-2011 range. Still no data from Oz until building permits on the 30th. Looks like a 0.9580-0.9660/0.9710 range. NZD/USD seems to have picked up demand down at 0.8060 for now and runs out of steam 0.8122/0.8156.
CAD – support in USD/CAD remains intact at 1.0280 and continued RM and macro demand 1.03-1.0330 remains the dominant theme. Mr. Carney will attend his last meeting at the BoC tomorrow (13:30LDN/08:30NYK), but no rate change or change in rhetoric is expected. If nothing else this meeting should act as a catalyst for discussion over what to expect from incoming Governor, Stephen Poloz, once Carney has emptied his desk. Volumes on VolT last week lend support to a continuation of the recent trend, but the recent 1.0393 high keeps us in check for now as range players and corp. names continue to sell any rallies above 1.0350. Beyond this, next resistance comes in at 1.04 then 1.0437/43(2012 highs). AUD/CAD continues to probe good support 0.99-0.9950 which has provided the low five times over the past two years and happy to buy this pair on dips with a stop below 0.99. Q1 GDP is released on Friday.
Scandies – Swedish PPI and trade balance data at 8:30. Stops triggered, (eventually) sub 1.1360 in thin Asian zone and looks good value to me down here with EUR/NOK at the upper end of its recent range. 7.55-7.58 is the sell zone for me in EUR/NOK and 1.1350-70 the buy zone in the cross risking 1.1300 for a short term test back up to 1.1460. EUR/SEK feels loose and will again be vulnerable to away from consensus prints in the data. We really are in a broad 8.5300-8.6500 trading range.
Barclays