EUR – Rallies remain limited for eur as we open today just above the recent lows at 1.3057 (asia low). Seemed to be eur x selling that weighed on eur yest as RM and spec names sold. Leading to some short term stop selling back below 1.31 on stronger US data – Corp demand has been around this 1.3070/90 area mixed around the tech support of the 50/100/200 day m.a but Stops starting to build below 1.3050 now and look vunerable initially. If we do clear 1.3050 next lvl is cloud top on daily at 1.2990/1.30 which should provide good support initially. Topside 1.3100/10 resisatcne in short term before that 1.3150/60 area that capped us yesterday.
GBPUSD – A seemingly frustrating week for our client base, with those that had sold below the 1.5370 area, later buying back above 1.5450 on Tuesday. The quiet grind lower in EURGBP has made GBPUSD shorts a little tricky, but ultimately, I do expect further losses. I am square for the time being (ex some downside structures expiring at the end of August). From here, I would suggest fading strength above 1.5450 and then again on any rally towards Fridays 1.5531 highs. To the downside, expect support ahead of Mondays lows at 1.5343.
EURGBP – Testing the lower end of the short=term range at .8469 – we have seen persistent interest from our client base to sell EURGBP in the last 24h. I am square here, but for choice, would sell any intraday rally back towards the .85 mark. A close below .8469 is required to open the downside a little more, but really, there is not too much on the horizon to warrant genuine trending conditions in EURGBP.
JPY – Continues to trade whippy on a 97 handle. Interesting to see that stronger US data yesterday got a positive reaction suggesting that if stocks stabilise then usdjpy can gain further traction topside – For now however too early for that – For now though Exporters happy to sell rallies above 98.00 capping us while RM names on the bid 97.00/30. Lvls to watch 96.80 and 96.30 important downside while topside congestion at 98.30/70 area
CHF – USD/CHF struggling to get through 0.9380-0.9410 region of resistance, capped by pressure on EUR/USD against 1.3050/60 but with EUR/CHF still well supported above the 200dma at 1.2217, feels like we should test 0.9480 but USD profit taking on rallies limiting for now – downside 0.9280 and 0.9230. Early indications suggest there is likely to be some USD buying into month end, but things should become clearer by the end of the day.
AUD & NZD – Erratic price action within relatively small ranges has been the theme in these recently. 0.9200-0.9300 for the AUD/USD and 0.7700-0.7800 in the bird with short term charts resembling seismographs prior to a large eruption. What sparks the volcano to blow its top is unclear but nothing serious lurks on the data front this week. We’ll be watching yields, equities and EM and no doubt those guys will be watching G10FX. So, play those ranges and keep out in the middle. Gillard news just out seemingly points to an election being called a month or so earlier than Gillard planned but market impact on the AUD is muted.
CAD – as expected there was a flush out yesterday in USD/CAD back towards support at 1.0440/50, trading down to 1.0457, but RM demand popped again in the same region (1.0440-80) as on Friday, post data. Strong US data gave the pair a pick-up yesterday afternoon but above 1.0530 there was some profit-taking from leveraged names and for today feels the 1.0450-1.0560 range should contain price action as we consolidate at these higher levels. The 2011 high at 1.0658 still remains the upside target but will require a solid US GDP print today (13:30LDN) ahead of Canadian GDP on Friday if we are to sustain this move. 1.0380 still remains the crucial level to the downside, where we have good stops for a range of names. Still some interest from the RM sector to sell AUD/CAD 0.97-0.9750, but would like to see a close below good support through 0.9650 to signal further downside.
Scandies – EUR/SEK delivered yesterday after good local RM supply 8.83-85 provided the momentum, helped by some broader USD profit taking yesterday morning, no exception for USD/SEK and USD/NOK. Norwegian employment data at 09:00LDN will be the focus as EUR/NOK continues to whip around in a broader 7.95-8.05 range, but the topside still remains vulnerable as we continue to see good leveraged demand on dips, and yesterday saw the first signs of some corp interest to buy EUR/NOK at these higher levels 7.97-7.98. 8.2575 remains the medium-term upside target but feels like we need to clear stops through 7.88 first. The way things are trading, it feels like being short NOK/SEK is not a bad trade despite continued RM demand 1.0980-1.1020, and will look to fade 1.1030-60 with a stop above 1.11, looking to test longer term stops 1.0850-1.09.
Barclays