EUR – Profit taking at the back end of last week saw us dip 120 pip to that 1.3000/20 zone and despite trading heavy on the close in ny friday the bids remained then and on the open in asia – Some good eurjpy demand helping support eur today but order book suggesting that 1.3070-90 topside should be toppy first off – I bgt that dip friday looking to add into the stops at 1.2975/80 with a stop at 1.2935 – Like playing from the longside still looking for a fresh run at 1.3140/70 topside.
GBP – No U.K data today. GDP on Thursday is the economic release highlight of the week. Despite the equity related sell off on Thursday night, we still maintain ranges. Cable has cleared out the weakest of longs through 1.6000, EUR/USD bounces and it feels like we are set to resume mini trends higher, with the EUR leading the charge. Looking to my order book for clues and there’s little to make me jump on anything right here. Short term stops below 0.8100 in the cross and supply in cable from 1.6100, getting heavier as we move onto a 1.62 handle is the colour. I look to play cable in the 1.5990-1.6085 range. EUR/GBP should be a buy on dips to 0.8080 and a sell into 0.8190. Price action tells me that there has been supply near 0.8150 and if we break through that, then that 0.8190 should get locked on. Have a good week.
JPY – Continues its slow grind after that close above the cloud top at 78.90 and held very well into the risk wobble at the end of the week. People have bought the break of 79.50 and its important today that we make a close above the 200 day which is at 79.45 if we are to continue this upmove – People want to be long into the BOJ meeting on 30th and are being dragged on as we continue to break the tech lvls topside. Resistance is now here at 65-80 a clean break at 79.80 opens up a run at 80.50 – Looking for 79.40 dips to hold on the day a close back below 79.20 for me is a negative while a hold above 79.45 (200 day) is positive for a continued grind.
AUD (1.0314) – continues on it’s random walk, the failure to ascend beyond 1.04 figure means we have carved out a new 1.02-1.04 range for now. First support level comes in round 1.0302 (100dma), below here we get small trendline support round 1.0275/80 with some bids already in the books round here. AU CPI remains the domestic focus for the week, the budget last night still promised a surplus with Swan using this rhetoric to ensure the RBA has enough flexibility to cut rates in November (although is largely priced). We have small bids in the book below the figure, some decent stops come into play though below the above mentioned support round 1.0270. Topside quite thin, offers now being lowered to round 1.0350. Am square here, see little value getting involved mid-range. G’luck!!
CAD – The perfect storm for CAD at the moment it would seem, an overcrowded market long CAD all rushed for the exits last week with Carney talking down peoples rate expectations and on Friday a clearly leaked CPI number had the pair trading above 0.9900 before the print. The data itself was only marginally worse and given some of the names that have been buying USDCAD since 0.9820 over the past week I sincerely believe there is a one off flow/position cutting dominating proceedings. Some news articles citing the government rejecting the Petronas bid for Progress Energy muddying the waters as well this morning. BoC tomorrow should be interesting I have to agree with our strategy and think medium term benefits of CAD still exist but had my fingers burnt expressing this last week. We held crucial resistance around 0.9950 overnight and stops loom up towards parity and equally bids around 0.9880. Stubbornly short as a desk still but expect dips to be shallow leading into tomorrow. Above 0.9950 and it’s wrong. Good luck.
Resistance 0.9950 1.0000 1.0080
Support 0.9900 0.9880 0.9820
Scandies – Riksbank week is upon us and given the snippets of Ingves from last week peoples expectations have changed somewhat. The price action in EURSEK would suggest that a less dovish outcome is expected and I personally do not think they cut rates. Technically EURSEK looks well supported for now around 8.55 and there are stops higher though 8.61/62. I think for choice we take out these topside stops before Thursday but this rally should be sold into. Equally if we breach 8.55 might be worth selling to see if we gain any momentum. Square for now but looking to sell EURSEK at some point. I think NOKSEK might stabilise ahead of 1.16 for now but looking towards month end I am long EURNOK, will add back to 7.35 and will be bailing through 7.30, this is ultimately looking for a readjustment in Norges bank November purchases but also from a technical perspective think 7.33/32 should be good support so happy to lean against that given lack of fundamentals driving NOK at moment, should be interest to sell back to 7.42/43 initially. Good luck.
EURSEK support: 8.55 8.52 8.45 resistance 8.66 8.68 8.70
EURNOK support: 7.35 7.30 7.25 resistance: 7.45 7.48 7.50
Barclays Capital