EUR – Still happy to play long eur against 1.3450 with a stop at 1.3420 for now – we seem to be range playing as we go into month end – yesterday rm buying on the dip below 1.3490 while rallies at 1.3510/20 were capped by corp supply – Today some cpi data in Germany and then pce and Michigan in the states, as well as some fed speakers – As we approach month end mkt looking to next week with ecb and payrolls on the horizon mkt will be looking to see anything guidance on another ltro and whether the recent claims data in states feeds into higher payroll. For now long while above 1.3450 like to fade any move topside again to 1.3530 then 1.3570 initially.
GBP – Carney does not see a case for more QE according to the Yorkshire post. I knew I should have subscribed to the YP along with the FT and WSJ. The reaction was cable from 1.6050 to 1.6133 and the cross through support and trading down to 0.83615. Partly due to poor liquidity but also because the pound has been floundering at sea for the last few days. It will certainly suit anyone who started to preposition on the month end demand chatter but I don’t see the headline as that much of a shock. So what now? Well, I was expecting the bid tone to firm up today in the pound but not like this. Expect cable buyers now to be lurking at 1.6088 and 1.6067 with cross offers starting to appear 0.8392-00 and 0.8415. 1.6163 post FED high in cable and 0.8356 in the cross are the levels to watch if the pound keeps its legs. No major data releases due from the UK today.
JPY – After the squeeze yesterday as mkt awaited news from GPIF from their press conf the post effects were to retrace against 99-98.50 – despite the disappointment we hit some rm bids at 98.50 again and held here again o/n – topside contains exporter offers as we go into Japanese half year end starting at 99.00/50 so any squeeze to there should be capped initially – overall I think mkt has reduced longs yet price action hasn’t really followed through to the downside – repatriate /month end is Monday if at all and I think mkt will be keenly watching for any dip to buy into as we look to what ABE announces from gvmt stimulus on Tuesday. – Prefer to play from long side wrong in short term below 98.20 but ultimately below that 97.75 low from fed last week – topside while offers should cap us into Monday I think room to extend post that date.
CHF – RM and corp supply as we go into month end capping us on rallies – we have managed to failed on the mini squeezes to get much above 0.9120 so pressure still to the downside – stops await below this triple low at 0.9075/80 before next support at 0.9050 and then years lows at 0.9025 – topside resistance is 0.9130/50 – CHF KOF out stronger at 1.53 but no real impact other than a quick 5 pip dip – Eurchf closed well below the 200 day (now at 1.2305) o/n and we edging lower slowly against rm buying into the downmove – I expect further chf demand into month end but like the idea of a long usdchf against the years lows at 0.9025 into next week in anticipation of stronger payrolls.
AUD/NZD – Choppy price action within ranges continues to be the overall theme but the Kiwi is starting to show some signs of strength. AUD/NZD has slipped from just shy of 1.14 to where we are now, mainly due to NZD outperformance over the week. 1.1266` support has just cracked and now we eye up recent multi year lows at 1.1200. For the Oz, I don’t expect any particular move until possibly the RBA next Tuesday. NZD/USD feels like it wants to take a look above 0.8327 resistance, with support now at 0.8300 and 0.8268. Flows and orders have been light and don’t paint a compelling picture.
CAD – We tested resistance at 1.0350 yesterday afternoon after some demand in to the 4PM benchmark, helped by strong US jobs data. We sit in the 1.0280-1.0350 range and think we hold that into next week. I am still happy to buy dips in USD/CAD down to 1.0280 with a stop through 1.0250, with topside targets still in place 1.04-1.0420 where there is supply building in the orderbook.
Scandies – NOK has regained some ground after an exaggerated reaction to a disappointing AKU unemployment print on Wednesday, but today’s headline September unemployment print will be more important (cf.2.6%). The weak side in EUR/NOK remains to the top where there will be more pain if we can test the year’s highs at 8.1660. Beyond here 8.22/25 is resistance but I am now looking to fade any move higher as this move is looking overstretched. Swedish retail sales is out at 08:30LDN cf. 0.4% mm but I don’t see too much reaction as NOK continues to dominate the Scandie space. EUR/SEK should find support around 8.60/62 but more broadly we still sit in a 8.55-8.70 range, and while NOK/SEK continues to be well supported against 1.0710 and 1.0650 I see more chance of EUR/SEK testing resistance at 8.70.
Barclays