EURUSD – Squeezed yest as few shorts covered after the hold above 1.2800 and seeing further covering today on ldn open as we open above 1.2880 resistance – I have sold some here looking to sell some more at 1.2920/35 area with a stop above 1.30. Eur x’s led by eurchf and eurjpy supportive so far above 1.24 and 130 respectively – Little again on data front and while mkt takes off some long usd post payrols i think that we into fade territory again for eur. Looking for a retest of 1.28 and ultimately 1.2740 – topside resistance 1.2910 then 1.2950.
USDJPY – While struggling yesterday as mkt started to reduce usd longs post payrols i liked the fact we held the top of the daily cloud at 100.80 with japanese investors and spec names supporting us there. With Nikkei and asia stocks all up today jpy x’s have pushed on and expect these to be supportive – 101.50 (asia highs) first target tospide then 102.30. Downside 100.80 key then 100.30
GBPUSD – Continues to recover some of the losses from the second half of last week. If the downside is to remain direct, 1.5009 should hold on a closing basis in my opinion. That level marked the March lows, and was the lower end of the previous range. So far this week, flows from our franchise have been more two-way, with some Real Money buying having pressured some shorts. I have sold this rally, happy to leave a stop-loss above the 1.5025 area, expecting another test of the years lows at 1.4831 soon. Below 1.4831, 1.4687 will offer the next downside target, with some other resistance found at 1.5080 (Fri high).
EURGBP – Trading in a rangy fashion, albeit at higher levels. A grind higher in EURGBP remains my base case but I do not expect impulsive gains for the time being. For choice, I would buy between .8570 and .8590, though I do expect equally good resistance between .8635 and .8645. Thus far this week, we have noted Real Money supply in EURGBP, whilst Systematic accounts have shown a preference for buying. UK IP is due at 9.30 Ldn, consensus expectation is for 0.2pcnt m/m -1.5pcnt y/y.
CHF – Usdchf has remained firm throughout the post payrol move in USD with eurchf taking up most of the slack trading yesterday through resistance at 1.2385/90 to a new high at 1.2450 today – I remain bullish on usd and eurchf and look for usdchf to remain supported at 0.9580/00 on RM demand with the general risk sentiment and eurchf to remain supported against 1.2390 – then 1.2330 targets 1.2470 then 1.2525 topside – Usdchf 0.9580 then 0.9530 key downside lvls targets 0.9725 then 0.9800/40 (old range highs)
AUD&NZD: The market feels like a coiled spring this morning, with accounts running very short of AUD and to a lesser extent NZD both against the USD in the crosses. Fast move already with AUD/USD putting on 50 pips fast and popping through 0.9180 resistance. Recent EUR/AUD longs also getting waxed. It does feel like the market in general is getting concerned with the pace of the general USD move leading into tomorrow night. 0.9150-60 should hold us now for a move above 0.9200. More short will run for cover if we crack 0.9225. A move through there will be a correction and I’ll look to fade towards 0.9250-0.9300 should we see it, or hit the bid should I sense the move has run out of steam. NZD/USD now clear of 0.7820, has 0.7900-15, 0.7940 and 0.7980 resistance. I don’t see us into 0.8000 territory and will fade risking that level.
CAD: Slipping as commodity ccy’s in general shake out some shorts and the USD has a retrace. Fast money sellers already hitting the bid and stops are lurking down to 1.0450. 1.0500 the first level of support on the techs but I don’t see demand until the low 1.04’s. Topside resistance kicks in at 1.0560 and 1.0580-90 for shorts looking to take a ride on a correction today. Feels like we play for a flush out and look to bargain hunt USD’s should it happen.
Barclays