EURUSD
Topside: 1.3810/30
Downside: 1.3700, 1.3650
Few data points today pre FOMC later – CPI in Spain and Germany where low prints suggest ECB may need to react later in the year. ADP around midday and then FOMC tonight. While I think a dovish outcome is expected tonight from FED, mkt feels like it has reduced USD shorts in last 2 days. Eurusd now against support at 1.3700/20 which should hold so bought some EUR here will add more at 1.3715 with a stop below at 1.3650 – looking for a move back towards 1.3810/30 lvl topside initially.
GBPUSD
Topside: 1.6115/19
Downside: 1.6020/30
Finding buyers ahead of trend support, going back to July 9th (1.6020/30). I have re-instated a long position close to these levels, risking 1.5975. In the event a close below 1.6020 is achieved in the days ahead, I will turn neutral and expect GBPUSD to slide back into its multi month range. To the topside, I would expect sellers ahead of the 1.6115/19 pivot, which marks the lows seen in the middle of last week. Client flows have been super light in recent sessions, though Spec selling has been the theme if anything.
EURGBP
Topside: 0.8585, 0.8652
Downside: 0.8539, 0.8519
Touched as high as .8585 on Monday, and I would suggest between that level and .8652 would represent a good opportunity to sell EURGBP. The ongoing discussion around yearend Corporate buying, means my conviction is low however – I would prefer to operate in both the EUR and GBP against the USD. To the downside, I would expect buyers to emerge between Fridays low at .8519 and Mondays low at .8539. We have not been part of this reported Corporate buying since the beginning of last week, but instead, have noted HF and Real Money interest to sell EURs.
JPY
Topside: 98.50/70
Downside: 97.90/98.00, 97.50
Model/CTA demand took over from buying from Japanese investors, RM and retail yesterday between 97.75-98.00, and has been sustained in quiet mkts o/n. 97.90/98.00 Should now act as support on dips in short term before 97.50 and now looking at 98.50/70 as pivot lvl topside. While continue to have a long bias, also feel that we are in a 97-99.50 range so again at 99.00+ expect offers from japanese retail/exporters. ADP data and FOMC tonight should have some impact, but in the main expecting usdjpy to remain supported.
CHF
Topside: 0.9000/20
Downside: 0.8891
Up against initial resistance now at 0.9000/20 after a nice cleanse of any shorts off lows at 0.8891. Orderbooks clean leaving us dependent on data – For choice i would prefer to sell here with a stop at 0.9050 looking for a move back towards the lows. Eurchf ultimately holding in nicely but up against resistance now at 1.2375/85 so expect us to run into corp selling topside which will cap us , while 1.2325 is support downside.
AUD/NZD
AUD
Topside: 0.9548, 0.9570/80
Downside: 0.9500
NZD
Topside: 0.8272
Downside:0.8213
You may have missed it but NZD had a quick round trip this morning with MOODY’S SAYS DISCUSSED CUTTING NEW ZEALAND FROM AAA, headline causing NZD/USD to trade from 0.8262 to 0.8212 and then straight back to the 0.8260’s again on this one- MOODY’S, DJ MOODY’S EXECUTIVE SAYS COMFORTABLE WITH NEW ZEALAND’S AAA RATING. Fun and games. That ratings change would only put Moody in line with other major rating agencies anyway. Whichever way you slice it though, you can’t take it as a positive for the NZD. Short term resistance is right here at 0.8272-80, with old support and this morning’s low at around 0.8212/13. AUD/USD had one last look lower down to 0.9460 as Stevens’ comments continued to be digested but price action seems driven by short term stops rather than fresh quality selling. In fact a number of buyers popped up after that dip o/n. I like long AUD/NZD again, risking 1.1460 or 1.1430 for another look up to 1.1600. AUD/USD itself should base out now having taken out the last of the stops and now pushing through 0.9500 again. 0.9548 and 0.9570/80 topside levels to recapture. RBNZ tonight and the market seems to be looking for a more dovish tone from Wheeler. I doubt whether his view on a lower ccy will have the same impact as governor Stevens though but let’s see.
CAD
Topside: 1.0468, 1.0550
Trendline resistance is being checked out at 1.0468 in USD/CAD but we have yet to post a close above. The tone is still a weaker CAD though and expect chartists to start calling for 1.0550-1.0600 strategy targets. EUR/CAD maybe a safer bet through FOMC risks, with support kicking in at 1.4350, 1.4310 and 1.4175. 1.4720 topside resistance/target here.
Skandies
No material change from yesterday’s commentary. Still within ranges but look for data from Norway today, (retail sales and unemployment) and Fridays PMI from Sweden to turn the volume up. 8.7100-8.8250 eur/sek, 8.1000-8.1650 eur/nok. Play the ranges, react to data.
Barclays