EUR – Big week for fx this week with all the CB meetings and payrols data, as well as month end – Last week saw a further squeeze in eur to 1.3299 high with some stronger data and a further unwind of usd longs – Cant help think mkt is pricing for a more dovish fed and will be disappointed in that fashion – It will be a timing issue but think you look to fade the rally in eur a look to be short over FOMC and into ECB – Resistance is at 1.33 and still offers at these lvls then 1.3335 trendline resistance off the years highs. Support is 1.3240 then 1.3170 on downside – I expect eur to be back towards 1.31 again as we edge towards the end of the week.
GBPUSD – Continues to gyrate around Fib resistance at 1.5394 – I expect further consolidation, between now and this week’s global macro events that begin on Wednesday. 1.5435 marks the recent high, and should attract selling interest, whilst support should be found between the 10dma at 1.5308 and Fridays low of 1.5356. Client flows have been balanced in the recent past, though volumes have been on the low side.
EURGBP – Washing around within an .8575 – .8647 range. I have no strong view in this cross right now, and I am happy to fade either side of the range. Corporate buying has largely been offset by Leveraged and Real Money selling interest recently, though again, this pattern has generally been on low volume. *UK Mortgage approvals data is due at 9.30 Ldn, consensus is 59.7k. CBI reported sales will follow at 11.00, where consensus is +10.
JPY – Kuroda speech contained ntg really of note o/n – other than suggesting things moving in the right direction. Leading to further unwind in Asia post Fridays’ low close in NY below 98.50. On the plus side we stopped short of the 97.50 lvl (base of daily cloud) – However with most of the big events Wednesday onwards the concern is that we get a further clean out of longs towards 97.00 (weekly base line) and base of the 97-100 range. Currently long i will rethink below 97.50, although overal i think we hold 96.80/97 until wed adp data /FOMC.
CHF – Further unwind last week of usdchf longs – the move below 0.9280 taking me out of my own stop. We just playing the lower 0.92/95 range. Problem is for me nothing changed – I think mkt is pricing a more dovish fed than they are likely to get and that we should rally towards the end of the week. 0.9260 support then 0.9180 below that – topside targets 0.9370 then 0.9430 – ultimately 0.9530 remains the key lvl topside – Eurchf drifted lower at the back of last week but held ahead of 1.23 – support is 1.2300/10 then 1.2270 below that before the 200 daya t 1.2235 – topside looking at 1.2410 then 1.2485 as resistance.
AUD & NZD – Lack of any real direction at the moment with AUD in particular trading in erratic fashion inside of 0.9130-0.9320. Flows have been light and mixed and it feels as though we will be at the mercy of the next general USD move, possibly post FOMC on Wednesday. The domestic data highlight is going to be the PPI print on Friday morning. For now I will look to play a 0.9200-0.9300 range. NZD/USD has managed to set up base camp above 0.8050, thanks to RBNZ and subsequent pressure on AUD/NZD. No real momentum for now though and we need to get through 0.8125 for another leg higher. A more Hawkish FED could see fresh longs heading for the exit below 0.8000.
CAD – USD/CAD once again well support against 1.0250/60 and happy now to re-initiate longs with a stop through 1.0230 ahead of the FOMC on Wednesday. For USD/CAD in particular, there has been a lot of supply over the last week from RM names, but has been a very slow grind and has been absorbed well as we now see corp. names emerging on the bid 1.0260-90 as well as ongoing macro buying. We have Canadian GDP on Wednesday, which will be well watched after the storming Retail Sales numbers last week but market focus will be no doubt on FOMC. To the downside, 1.0140 is a key level as that was the start of the recent bout of CAD weakness, while to the topside targets still re#main 1.0320, 1.0350 but ultimately top of the previous range at 1.0440.
Scandies – Walk in to some early demand for EUR/SEK and top of the range at 8.65 feels vulnerable, with stops for a few lev names building above there. This comes on the back of strong RM and corp demand for EUR/NOK throughout last week and feels like the market is looking to get some USD longs back-on as we head into FOMC as many feel the market has overpriced the dovishness expected on Wednesday. Some corp demand for USD/SEK and USD/NOK also emerged overnight and from the off feels like this will be the way for the week, but beware of USD/NOK back through 5.85 as some spec stops building through that level. Swedish June Retail Sales up at 08:30LDN (cf. 0.3% mm, 2.1%yy) but the USD will remain the broader them this week, especially given the way EUR/SEK shrugged off last week’s unemployment and confidence data. I will look to buy dips in USD/NOK 5.88-5.90 with a stop through 5.85, looking to target 6.02/6.10.
Barclays