EUR – Light squeeze off the lows at that 1.2990/1.30 support as eur x’s staged a decent recovery led by eurgbp- i have reinstated a short here at 1.3070 lvl against these m.a 1.3070/90 zone – will sell more at 1.31 with a stop above 1.3150 – Eventually think that if we can get through that cloud top at 1.2990 then room for a further sell off to 1.2850 as we go into the ECB meeting next thursday and mkt anticipates a more dovish stance.
GBPUSD – Has corrected from Thursdays 1.5201 lows, but should continue to find willing sellers on upticks. I have sold this minor correction, but intend to keep spot positions modest on the day, given the usual month-end volatility is afoot. Flows remain GBP negative overall, with Macro clients increasing activity over the course of the week. Expect some resistance around 1.5300, with 1.5346 marking yesterdays high. To the downside, support should be found initially towards 1.5201, with 1.5169 a notable previous low also.
EURGBP – Surprisingly well supported, with the suggestion being, that a one-off flow has underpinned EURGBP in the last 24hrs. I am square here, and for choice, would rather sell around current levels. Some Real Money selling has been evident on this rally, but volumes have remained rather low on the whole. Expect resistance towards the upper end of the recent range at .8599, with support likely at .8500-05 and then at .8470.
JPY – Another big bounce in the Nikkei and usdjpy follows it – this time taking out that 98.75 resistance on its way to 99.03 high – Coming into the month end still seems to be demand for usdjpy and with Nikkei support I think room to target 99.30 area (previous pre BOJ meeting high) – Downside now at 98.70 then 98.30 support on dips – For now while we sustain a move above 98.30 we still pointing to further gains – US data later in day in form of Chicago which had a high print last time so interesting to see the mkt reaction to today – For now target further gains into month end and looking to payrolls next week – expect exporters to take advantage of moves towards 99.50/100 to sell into.
CHF – Hold in at the top of the recent range, but expect some offers 0.9480-0.95, with support 0.9370/0.9320. Remain long and will add on the day at 0.9390 with month end models suggesting weak USD buy signals. EUR/CHF remains underpinned after good bounce of the 200dma around 1.2220, but stops now building 1.2220-1.2190.
AUD & NZD – Month end flows to dominate today. A Weak USD buy signal has been spat out by babbage here but I wont position on the back of that just now. Levels from yesterday still intact and I look to lean on the Oz 0.9325-50 on a pop. 0.9143 still the downside level to consider a breakout move. The bird should struggle to fly much above 0.7870-00 but 0.7940 is a stronger resistance level on the techs. 0.7700 remains tricky to crack below so far. More as I get it. Nice weekend.
CAD – USD/CAD remains well supported above 1.0420 with leveraged demand popping up 1.0420-50 yesterday to combine with the ongoing RM demand we’ve seen 1.0450-1.0490 since last Friday’s data. Month-end now in focus with early indicators suggesting a weak USD buy signal. If we can hold above 1.0380 through month-end then happy to maintain upside targets around 2011 highs at 1.0658, with resistance ahead of that at 1.05/1.0525/1.0555/1.06. Canadian April GDP at 13:30LDN cf. +0.1%.
Scandies – Managed to run stops in EUR/NOK back through 7.88 yesterday as the key theme remains RM re-entering long NOK positions both in EUR/NOK and NOK/SEK, which has now cleared out stops back through 1.11. Remain short EUR/NOK having sold the break of 7.88 yesterday and feels like we can test support at 7.81, but hold that position cautiously into month-end, with models suggesting weak USD buy signals and in USD/SEK especially there is good support 6.67-6.70. Retail sales from Sweden and Norway today at 08:30LDN and 09:00LDN respectively. Riksbank now at the forefront of people’s minds with roughly a 25-50% chance of a rate cut priced in for next week, and my feeling remains that EUR/SEK has more room to retest previous range support at 8.55 but think you may get a better opportunity to sell this pair 8.80-8.84, if the USD buying theme into month-end is to be believed.
Barclays