EURUSD
Support 1.3740 1.3705 and resistance 1.3830 1.3960
Still clinging on to higher levels but price action is like a wasp in a jam jar. 1.3792/65/42 support but a little concerned that the market sits lazy long. I like the position but price action leads me to believe that we may be due a flush out first. IFO at 9:00 and durable goods, Michigan and inventories data from the states will all have an impact and will look to bob and weave around a core short USD view. Topside resistance 1.3832 and 1.3862. Daily trend resistance comes in at 1.3960 ish on my maps and looks a nice target…….evetually.
GBPUSD
Support 1.6120, 1.6095, 1.6030 and resistance 1.6225, 1.6260, 1.6300
The ranges have been contracting in recent sessions, and this morning’s advance reading of Q3 GDP should encourage a break from those parameters (particularly if a topside surprise). I remain long of GBPUSD, and will be looking to add to the position on any weakness into the 1.6138 – 1.6160 band. 1.6260 and 1.6381 remain the key levels overhead, and a weekly close above 1.6260 would be very constructive indeed for longs. Client flows have been rather light this week, though the theme if anything, has been one of faster money clients reducing longs on dips. Wednesday also triggered a fair amount of Spec selling below 1.6140, bringing me to the conclusion that the market is less long than at the beginning of this week.
EURGBP
Support 0.8485, 0.8450, 0.8400 and Resistance 0.8535, 0.8600, 0.8650.
Showing some signs of potential exhaustion yesterday at .8555, though a close back below the .8510 mark is required to reopen the downside. My sense is a lot of short covering has been done this week, and in the event of a topside surprise in GDP this morning, the down-move will be quite a vacuum. The main theme this week in terms of the composition of our flows, has been Spec short covering, and given the extent of the move, I am surprised we have not noted any really significant flows. Expect support at .8484 and .8441, with selling likely to emerge at .8555 and .8594. The advance reading of Q3 GDP will be released at 9.30 – Barclays Economics forecast a slightly below consensus outcome at .7 q/q (consensus .8 q/q).
USDJPY
Support 96.90 and resistance 97.90 98.50
Being gradually undermined by the generally weak tone in the USD and the recent poor performance in the Nikkei. The market remains long X-JPY to an extent, and on the day it feels like some more of these positions will be put to the sword. Against the USD, my order book also suggests selling to be done over the next .5pcnt to the downside, though some support should be evident at 96.57. To the topside, upward corrections towards 97.44 will likely be sold, with 98.19 forming the upper end of the near-term range. Client flows this week have been rather light, but have been skewed towards liquidation of JPY shorts.
AUD&NZD
AUD/USD trading poorly and probing the downside over the last few sessions. I’m still running long though after stopping myself out sub 0.9580 and then re-buying after a couple of notable buyers in good size emerged in NYK. Still, price action remains weak and conviction remains low. I’ll be out through yesterday’s low of 0.9570. Real money AUD/NZD buyers are now active with the cross continuing to perform well and above its 100 DMA at 1.1523. We look set for a look back above 1.1600. NZD/USD has suffered as a result breaking down through 0.8327 support, with 0.8268 next stop.
Skandies
No action around the twin cb day yesterday, with as expected outcomes and from both. EUR/NOK and EUR/SEK near the middle of recent trading ranges, 8.0730-8.2000 and 8.7335-8.8250. No significant data out today and I expect a calm ending to the week. Play the ranges.
CAD
Canada a new theme within G10 FX with a change in BOC tone sparking a weaker CAD. No point in fighting this move and it feels right, with an orderly ascent. 1.1400 looks like a buy for a test of the 2012 high of 1.0447. Daily trend resistance above there at 1.0479. Stay on target and be patient. EUR/CAD and GBP/CAD also in vogue and small but consistent buyers have been noted.
Barclays