G10
EUR – The rollercoaster continues – starting to get to that point where the mkt needs to stand on its own with all the gd news out post BOJ easing, leaving us with a China pmi again below 50, tensions between china and Japan and talks of downgrades to Australia’s aaa rating – Seeing some early usd buying against eur, gbp and aud and for eur it feels like we are right on the pivot downside at 1.2930/50 area – some stops have been taken but more lie below this 1.2950 support – topside need a break back above 1.3030 to unwind this early morning nervousness – PMI’s in Europe out first off to give us further direction, followed by markit pmi and phili fed later in ny – mkt definitely has the jitters this morning so the data will have an impact – play 1.2950-1.3020 initially and see how the data plays out.
GBP – Opening back below 1.62 after the USD rally overnight. It has been frustrating but finally cable is making a move lower and I am trading GBP from the short side, downside targets are now formed at 1.6145 and 1.6070. EURGBP I expect to test the support at .8000 and should this region hold we could see a faster move to the downside in cable, a break below will open up the .7965 support. The cable order book is actually better bid towards 1.6150 with stops gathering back above 1.6250, EURGBP book is much better offered with good supply .8040-8100. Today we have Retail sales at 9.30, GBP levels to note 1.6145 and 1.6240, EURGBP .8000 and .8060. Good luck.
JPY – Poor price action post the BOJ easing – we didn’t take out the daily cloud top (79.27) we couldn’t hold above the 100 day m.a (79.05) and we hit a wall of profit taking out of Japan sending us all the way back to 78.30 and ultimately 78.03 this morning – While I imagine much of the pain has been taken there are still stops below 77.90/78.00 support so room today for a further extension which is a buy against 77.60 – topside 78.50 has provided Japanese offers and stiff resistance o/n so bounces for now should be limited to that lvl.
AUD – Topped out at 1.0497 yesterday and the Asian session has seen a sharp retracement. Confusing price action despite the better than expected China data, although a media report stating the S&P suggest Australia’s AAA rating is at risk if the level of AUDUSD does not fall in line with the terms of trade. So we have now taken out support in the 1.04-1.0420 band, I am not fading this price action yet and think we can pull back further to 1.0340 (61.8% fib of 1.0165-1.0625). The order book lacks direction from here, flows were skewed to USD buying overnight. Support 1.0380 and 1.0340 Resistance 1.04-1.0420 and 1.0494. Good luck
CAD – My desire to sell a rally in USDCAD diminishing by the day, yesterday we traded from 0.9740 up to 0.9770 back down again and now testing 0.9790 as we walk in with the USD climbing off the canvas and fighting back. CrossJPY selling off yesterday kick started proceedings and despite an ok close in stocks overnight things are not looking that rosy and it’s difficult to ascertain exactly why. Stops building in USDCAD above 0.9800 and then offers ahead of 0.9850, relatively orderly in funds at the moment and maybe a stretch back towards 0.9850 would be more encouraging to initiate shorts but think this depends on whether EURUSD stays above 1.2950. US Jobless claims, Philly Fed and leading indicators this afternoon. Good luck.
Resistance 0.9800 0.9850 0.9900
Support 0.9730 0.9680 0.9650
Scandies – SEK outperformance at the moment perplexing a few people, I think a combination of the looming crucial resistance around 8.68/70, local corporate and rm selling on the break of 8.60 and general EURxxx weakness at the start of this weak goes some way to explaining this recent sell off. Yesterday’s leg lower triggered by stops on the break of 8.53/52 and a left hand side WMR, we were a better seller around these levels for some RM guys out of NYC. I think from here you can sell back to 8.55/56 or buy it back to 8.45/46, still like playing NOKSEK from the long side with a 1.1350 chop. EURNOK looks like it has good resistance around 7.48/50 and few bids ahead of 7.38/40 but on the whole sidelined. Good luck.
EURSEK support: 8.46 8.42 8.38 resistance: 8.56 8.60 8.65
EURNOK support: 7.42 7.38 7.30 resistance: 7.50 7.55 7.60
EM
ZAR – USDZAR struggled to squeeze lower post the Lonmin settlement and spend yesterday trading an 8.1600 – 8.2800 level, never looking comfortable at the lows. Flow wise it was a busy one with a host of clients active on both sides of the market, on the day betters sellers of USDZAR. MPC day in the Republic and the Rand opens at 8.3400 as a combination of bad data and stops catapult USDZAR from last night’s 8.2450 JHB close. Price action is terrible and with USD bid across the board we’ll stick with a long USDZAR position, adding on dips towards 8.2800 for a retest of the 8.4000. Keep an eye out for PMI data out of EZ, Initial jobless claims and Leading indicators out of the States and the all important Interest rate announcement locally.
Barclays Capital