EUR – Feels set for another day in dullsville, with little in the way of data to focus on. Illiquid, choppy price action is expected as interest levels are set to be low. Order wise I have supply into 1.3200 and above and very light bids below. Suspect 1.3060-1.3200 will be the fences at either end of the paddock.
GBPUSD – Directionless for the time being, with 1.5158 – 1.5346 likely to contain trading until further notice. I am square, happy to operate flexibly within this range, and client activity remains equally neutral. Q2 GDP (Thurs) will be the next local driver of note, otherwise I expect broader risk sentiment and the USD’s performance to dictate.
EURGBP – Failed to sustain price action below the .8600 pivot, and so a drift back into the range seems likely. Overall, Leveraged supply of EURGBP should persist on rallies, but a clear close below .8600 is needed to open further downside targets. .8575 remains good support, and below there .8509 should encourage buying interest. To the topside, .8629 and .8647 offer immediate resistance.
JPY – 99.60–100.74 marks the Asia range, and there is little on the horizon to suggest we will venture outside of those parameters today. Overall, we are persisting with USD longs and expect topside progress towards the 103.00-60 band over time. On the day, I would advocate buying weakness towards the lower end of the short-term range, and buy again if Spec stops in the 99.30-99.60 region are triggered. Client flows have been fairly neutral in the recent past, with Leveraged clients noted proactively trading around long positions. Real Money demand has also been a recent theme. Resistance, 100.74, 101.05 and 101.53, support, 99.60, 99.47, 99.04.
CHF – Stopped out of USD/CHF back through 0.94 overnight and more stops about back through 0.9360. Ultimately still like to play USD/CHF from the long side but happy to take a breather whilst we regroup with volumes remaining subdued. EUR/CHF demand still remains prevalent 1.2270-1.23 don’t expect to fill that demand anytime soon.
AUD & NZD – Expect another quiet session from the antipodeans today. The CPI print on Wednesday morning from Oz will give us more of a clue regarding RBA monetary policy and short term direction. Until then expect price action to go sideways with maybe some demand from shorts looking to reduce risk going into that event. 0.9235 tops us for now but through there 0.9260 and 0.9300 resist. Support at 0.9194, 0.9140 and 0.9110. NZD/USD feels like 0.79/0.80 until further notice, although the RBNZ on Wednesday night is an event to consider.
CAD – USD/CAD came under pressure late on Friday despite a slightly softer CPI data (mm 0% vs. cf. 0.1%, core mm -0.2% vs. cf. -0.1%), but holds 1.0350 support for now with some corp. and real money demand still about the market 1.0340-50. Lows from earlier in the month at 1.0325 remains the bigger support level to the downside, with stops building below through 1.0320 and 1.0280. Whilst feels like there is more downside pressure at the moment, I don’t see any catalyst to really drive the pair down there and at most I see a small flush out down to 1.0330/40. Top of the range still remains 1.0445/50 having topped there numerous times last week and for now I am sitting long against 1.0320 looking to retest that level. Canadian Retail Sales tomorrow at 13:30LDN.
Scandies – Very quiet in Scandies now with no domestic data due out until Swedish confidence data on Thursday. EUR/SEK cleared stops back through previous lows at 8.6104 and for now remains under pressure with some leverage names starting to lower their offers 8.61-8.62. EUR/NOK still holds in against range support at 7.83 but also feels under pressure as we continue to see RM supply of EUR/NOK and USD/NOK. Expect another day of tight ranges but still look to more downside in EUR/SEK, looking to retest June lows around 8.55.
Barclays