EUR – Remain long looking for a break at the top end of the recent range (1.2800-1.2990/1.30) a break I expect to yield 1.3050/70 before backing off again – Some model demand at current lvls helping support the move along with the general trend lower in European yields. On the day 1.2950 then 1.2920 supportive – topside 1.30 then 1.3050/70 key.
GBP – Inflation data and ONS house prices from the U.K today. We still tread ranges set from Friday and in fact broader ranges set from the middle of September. The EUR still dominates sterling and the focus is still with the single currency. Will Spain request a bailout? I don’t care and don’t think it’s such a big deal, especially now that everyone has been talking about it for weeks. More important for the greenback right now is the spectre of Asian USD recycling, as reserve managers intervene in their ccys and have USD’s to go once more. This is probably what has been going through the last few sessions and why price action in EUR/USD especially, has turned up out of the blue. With that in mind, I won’t be looking to play cable from the short side until 1.6170-00. Dips to 1.6020 are probably good value pre BOE minutes tomorrow. EUR/GBP could benefit from a move higher in EUR/USD as cable may lag. 0.8040 support, with good resistance at 0.8115 still (200 DMA/previous high).
JPY – Took profit on some longs yesterday as we reached that first lvl at 78.70/80 however i continue playing from the long side still with an initial target of 79.20/30 – The fact we have managed to open above this 78.80 lvl this morning is a good sign for a push higher – however that 79.25/30 contains japanese offers. Downside 78.40 then 77.90 key support lvls.
AUD (1.0274) – nothing new out of the RBA mins, more a reiteration of the previous dovish rhetoric we heard from Stevens and Lowe last week. As such, the market seemed to be fully priced with the price action in spot reflecting such. We have cleared through most of our resting offers overnight, only stops remaining through the figure now with offers kicking in above 1.0335/40. Am short against range highs here, but confidence is not high with the USD looking vulnerable across the board. Nothing in the books below until we get back down to 1.02 figure. G’luck!
CAD – Peripheral to a lot of peoples concerns at the moment, I still believe this is an environment where CAD should benefit and such sold straight USDCAD this morning after it looked like some overnight EURCAD buying from 1.2660 to 1.2730 has propped up the pair. Orderbook has more offers back up to 0.9850 and then some stops above. CADJPY remains pretty well supported below 79.80 but mainly the USDJPY leg looking to attack crucial resistance up at 79.20. Should be some corp demand in funds below 0.9750/40 which should offer pretty good support on the day. CA manufacturing sales and US CPI this afternoon. Good luck.
Resistance 0.9840 0.9850 0.9900
Support 0.9730 0.9700 0.9680
Scandies – A lot of local corporate interest yesterday to sell EURSEK on break of 8.66, stops below 8.64 also aiding the move lower set the tone yesterday with SEK benefiting for most of our session. Stalled slighted overnight ahead of 8.60/58 support but I think there will continue to be interest to sell rallies with a stop above crucial resistance around 8.70. I tend to believe in this strategy for the most part but looming Riksbank next week may change that. Saw a little bit of selling of USDNOK yesterday but on the whole NOK remains a bit quiet, NOKSEK selling towards 1.1700 should stall in large move lower in EURNOK, people will look to buy if we see it around 7.35, myself included. Good luck.
EURSEK support: 8.58 8.52 8.45 resistance 8.68 8.70 8.74
EURNOK support: 7.35 7.30 7.25 resistance: 7.45 7.48 7.50
Barclays Capital