G10
EUR (1.2889) – Super Friday looms tomorrow, but before Spain grabs the limelight we still have 24 hours to navigate through choppy waters. We sold a very decent chunk of Euro on the lows yesterday, it wouldn’t budge and as such went long on this underlying bid tone. We have sold our longs out first thing this AM, and are now square looking to trade range extremes. 1.2830-25 remains key support below, there are further stops building here now so I don’t expect it to hold as well today should we test this level. Topside we see some interest to sell EUR round 1.2910/20 with this being the first real level of note above having failed to rally through here yesterday morning. Square cash here is the safest bet, I don’t have a particularly strong conviction either way. G’luck!!
GBP – GDP and current account data at 9.30. No great plan on the day with choppy ranges and diminishing liquidity over the last few sessions. My main thought though is still Europe and despite ESM allocations and scale, it seems the political/social issues are going to continue to be a drag. I’m sticking to playing ranges with a bias to short risk. Cable supply into 1.6220, with corp type sellers noted should top out the pair, with tech support 1.6130 and 1.6080. EUR/GBP should see supply into 0.8000 but my books are a little skewed with stops higher and bids below. I still favour selling into rallies risking 0.8060. Tech support at 0.7935, 0.7900 and 0.7880. GDP is worth watching out for but I don’t think the market will run too far on an out of consensus print. I’ll stick to the levels above whatever it comes in at. Good luck.
JPY – Orderbook bias is still to buy USDJPY back to 77.10 (the post FED low), Japanese names are buying back to 77.50 but USDJPY itself still relatively quiet and trading in wake of EURJPY. EURJPY has stops lurking below 99.50 and better offers up to 101.00. Will still look to buy dip in USDJPY back top 77.50 for now but stop needs to be below 77.10, a convergence of barrier action and stops below 77.00 could make for some nasty price action and galvanise the BoJ, worth buying some topside if we see USDJPY on a 76 handle. Good luck.
AUD (1.0404) – the 50dma at 1.0428 halted the Aussie’s momentum overnight, there is still some supply lurking around here so I don’t envisage us powering through this level at any stage today. Downside remains quite thin, the 200dma down at 1.0343 held v well yesterday with a lot of mkt participants selling a false break and subsequently getting chopped in Asia. Still remain biased to sell rallies, nothing has fundamentally changed this week to alter my view. NZD remains turbo charged, I am still long AUDNZD (albeit just) thought admittedly my confidence is waning with energy prices off (NZ being net energy importer) and milk prices quite robust certainly being a net +ve for the bird. I will put my stop now at 1.2550 where we see some very decent trend line support. Am small short AUD here, will add on rallies up to 1.0460. G’luck!!
CAD – USDCAD reached our first sell zone yesterday around 0.9850 led by some decent corp buying into the afternoon fix and stops triggered above 0.9840, have sold into this move and now sitting core short with a stop above 0.9900. EURUSD bouncing off support aroundthe 2900 dma around 1.2825/35 certainly helped USDCAD drift lower overnight but next 48 hours of month/quarter end fix noise might cloud the picture a touch but happy to be short. Orderbook has some RM offers around 0.9860/70 and some bids back to 0.9780/70. US Durable goods and jobless claims this afternoon. Good luck.
Resistance 0.9860 0.9900 0.9930
Support 0.9750 0.9680 0.9650
Scandies – Another set of disappointing data from Sweden yesterday with confidence this time languishing causing EURSEK to spike from 8.47 to 8.51 but fresh selling from RM names saw us back below 8.48 overnight. There are more stops below 8.44/45 and still better offers around 8.54/55, expect EURSEK to squeeze into month end with usual names buying but think people will take this opportunity to reinitiate shorts especially if we find ourselves above 8.55. NOKSEK briefly touched 1.15 yesterday but has since backed off to 1.1450, still core long this pair and happy to add back to 1.14. EURNOK support around 7.35/36 looks strong but with retail sales and unemployment data tomorrow today should be fairly quiet. Good luck.
EURSEK support: 8.45 8.42 8.38 resistance: 8.56 8.60 8.65
EURNOK support: 7.38 7.35 7.30 resistance: 7.48 7.50 7.55
EM
ZAR – USDZAR held up like a champ yesterday despite a generally weaker risk sentiment, trading an 8.1870 – 8.2610 range JHB. Again we ended the day better sellers of USDZAR as offshore and local names seemed very comfortable selling the pair towards the 8.2500 level. This morning sees USDZAR open at 8.1950 and for now WGBI related flow seems to override the turmoil in the local labor market as well as the general USD demand across the board. USDZAR feels heavy at the open and this could be the day the pair finally test lower with 8.1200 the first line of support, from there 8.0500 becomes the next level. That being said it seems the whole world is short USDZAR heading into WGBI and although we’ll remain short the pair we remain cautiously so. Busy day on the data front with PPI data locally, EZ Consumer Confidence as well as a host of data out of the States.
Barclays Capital