EUR – Eur , helped by eur x selling, caught up yesterday with the broader usd move posting a low at 1.3161 – We saw corp and lev buying below 1.32 and it eventually fed through o/n with the rally to 1.3255 in Asia – Still in sell rally mode, if we do break Asia highs (1.3255) then room i think towards 1.3280 again but its a sell there with a stop at 1.3340 – if we can top here at 1.3260 area then look for 1.3190/1.32 as support again before that 1.3150 area on downside – Looking like we may consolidate now into the w/e so looking at 1.32/1.3280 range but will play from short side.
GBPUSD – Performed well, following yesterdays bumper Retail Sales release. Initially, I sold the spike higher into the 1.5470 region, but have since cut that position. Macro accounts were persistent buyers over the course of the day, and it seems GBPUSD was being bought against some USD longs being held elsewhere. I would still prefer to sell a rally, and to fade the 1.5550 – 1.5600 band seems like a fair proposition. 1.5606 had been the upper end of the range previously, and this area should remain rather pivotal. To the downside, expect some two-way activity around 1.5470, and then support at yesterdays 1.5415 lows.
EURGBP – Attracted Macro and Spec selling after Retail Sales, and has confirmed a failure at the upper end of the range at .8599. I have a general preference for buying weakness into the .8480 – .8500 band, though as has been the case for some time, there are more interesting opportunities elsewhere right now. Order book interest shows a general preference to play the range.
JPY – Wild ride still with RM and model demand strong taking us above 98.00 in the morning but the hard sell off in stocks and lev profit taking 98.00/30 eventually feeding through late in ny/early asia with the aggressive sell off to 97.25 (ny) and 96.86 (asia) – Demand remains though on dips as people look to get back into longs and with Nikkei reversing loses (-2% to +2%) we are quickly back higher – Expect 98.00/30 to again provide some decent resistance with a break above 98.60 necessary to see the next leg towards the recent highs at 99.35 (pre boj meeting) – Downside 97.25/30 should be decent support now on the day then 96.70/80 below.
CHF – Mainly a day of disappointment yesterday, lagging the overall USD rally usdchf never regained upside momentum post the SNB meeting as ntg came from it – Lev and bank names sold eurchf 1.2300-30 and eventually it knocked on to usdchf with the bigger sell off in stocks – Right now we finding support at 0.9240 area below there 0.9180/90 support – topside 0.9330 then 0.9400 resistance – I do think we will grind higher in usdchf but without any chf specific news its likely to be slow – Eurchf heavy 1.2330/70 area for now – downside support 1.2230/50 then 200 day at 1.2215 – I will take a stop on longs below 1.2190.
AUD & NZD – Small pullback for the USD o/n as some profit taking on USD longs filtered through. The main theme is still intact though and U.S FI stays hit. I expect today to be choppy once more as we head into the weekend. I’ll be waiting to ambush any protracted USD sell off but with wider parameters. AUD/USD is a sell whilst below 0.9410, NZD/USD sub 0.7940. I wont put myself in a position where I have to cut shorts in those pairs below those levels. Intra-day techs:- AUD/USD RES 0.9262, 0.9320, 0.9410 and 0.9435. SUPP 0.9165, 0.9143 and 0.9000. NZD/USD, RES 0.7810, 0.7850, 0.7900 and 0.7940. SUPP 0.7760, 0.7710 and 0.7635.
CAD – Canadian CPI (May) and retail sales (April) today at 13:30LDN. I think we still have more room to the topside in USD/CAD with previous highs at 1.0421 in sight. RM supply has been prevalent on this recent rally, but the pair remains well supported despite profit taking seen elsewhere yesterday. 1.0250 is once again the level to the downside will look to add on dips 1.03-1.0330 but following the FOMC and continued interest to buy downside AUD/USD and NZD/USD, it feels like there is a growing dislocation on the commodity side of things.
Scandies – A complete curveball from the Norges Bank yesterday: “the key policy rate will remain at the current level, or somewhat lower, in the year ahead.” The market was caught long NOK, and with the backdrop of Fed tapering developments, it turned into the perfect storm for USD/NOK, up 4% on the day. This is a significant development in the medium term and will take the opportunity to buy any dips in EUR/NOK back towards 7.80, risking 7.65, and 5.90 in USD/NOK. In EUR/NOK, 7.9810 should act as good resistance first off and beyond that looking to target 2010 highs at 8.2575. NOK/SEK now settled below 1.10 have cleared stops through 1.0950 late last night, and targets now have to be lows going back to 2007-2009 at 1.08. EUR/SEK underpinned by USD/SEK post FOMC, but highs from earlier in the month at 8.76 should contain us as I think we see some USD consolidation into the w/e.
Barclays