EUR (1.2979) – we open this morning on the first support level of the day, this 1.2965/75 region was the ‘break-up’ level on Wednesday having failed to clear this a number of times prior. Eurogroup meeting starts today, this will be in focus but for the most part we don’t see much pain in either direction. Offers are starting to hit the books up round the Asia opening levels at 1.3020-40, sporadic bidding interest exists all the way down to 1.29 figure. Am sitting here small short from Asia, I have a bias to be fading this again round the figure today. Selling rallies is the name of the game. G’luck!!
GBP – No data from the U.K today, with just production data tomorrow as the domestic highlight. The good news from U.S employment data has finally fed through as USD positive, with U.S yields better paid across the curve. Good! The ‘risk’ trade takes a back seat as stocks trade sideways. Let’s hope this continues. So the USD reverses sharply after London disappeared for the weekend, leaving day traders at the station as the train pulls away. I was one of those who reduced my cable short above 1.6210 and found it difficult to hit a 1.6130 bid on Friday night. I expect offers to now be waiting between there and 1.6150. Downside levels to watch now are 1.6080 and 1.6050, a breach of which should yield a test of 1.5980. EUR/GBP a little back seated again as the focus switches to USD pairs. 0.8058 holds as support with 0.8115 recent high as resistance. Overall, I look to fade any USD weakness on the day. Have a good week.
JPY – A kneejerk spike in USDJPY after Friday’s number in conjunction with US yields was met with swathes of Japanese offers ahead of 78.90/79.00 and then a turn in stocks in the back in end of the New York afternoon aided by the South Africa situation took us back to 78.60. CrossJPY the biggest beneficiary last week but some selling on the open overnight has taken us back through 102.00. Some commodjpy stops also lurking lower this morning and elsewhere in the orderbook we got bids in straight USDJPY at 78.20/30. Think its still worth buying the dip in USDJPY especially on a 77 handle but for today 78.20/30 should be good support so will lean against that first off.
AUD (1.0164) – AUD closed below it’s weekly cloud for the first time since June, this firmly remains a sell on rallies with the Asia highs round 1.0180 being the first level to lob some out. There appears to be some support round 1.0150 for now, not here though with stops looming through the 1.0145/40/35 levels. We are picking up offers round 1.02 figure now, these are pretty consistent all the way up to 1.0260. Employment data will be the domestic focus for the week, until then I struggle to see AUD trading above 1.0280. I have taken half my shorts back from Friday, will run the rest up to 1.0280 having failed there 2x post payrolls. G’luck!!
CAD – Double whammy on Friday albeit slightly delayed one, both US employment and CA employment (with strong full time change +44.1) weighing on funds taking us from 0.9810/20 to 0.9736, we saw leverage sellers on the way down and then some US corp buyers come out the woodwork and started buying around 0.9740/50. Took back our short on Friday once these buyers popped up but still feel the backdrop is one that benefits the CAD bulls so will be looking to resell 0.9830/50 today risking 0.9900, in the spirit of if its not broken don’t fix it. AUDCAD continuing to find steady supply and think if you can be patient this downtrend looks quite nice, straight AUDUSD on quite important pivot around 1.0150/60 having closed below the weekly cloud so not getting too excited, would like to see some volume momentum to galvanise another leg lower in AUDCAD. Good luck.
Resistance 0.9850 0.9900 0.9930
Support 0.9730 0.9700 0.9680
Scandies – Nothing to really change from my strategy in scandies for the time being, EURSEK held support on Friday around 8.56/54 but still think its worth selling rallies back to 8.64/65 with a stop above 8.70. NOKSEK still holds in well and think on more medium term basis this has room to squeeze back to 1.17, will look to buy 1.1520/30 if we see it. EURNOK struggling for inspiration but orderbook still got eurnok offers back to 7.44/45 and think if we see it here its worth buying some NOK risking 7.50. Good luck.
EURSEK support: 8.55 8.52 8.45 resistance 8.65 8.6650 8.70
EURNOK support: 7.35 7.30 7.25 resistance: 7.45 7.48 7.50
Barclays Capital