EUR – So eurusd demand at 1.2900/20 never got filled and with eurjpy buying again supporting eur into a short market post the weak PMIs and ifo yesterday we walk into ldn open with a stop run 1.2995-1.3015. 1.3020/30 still remains the lvl topside in short term and I continue to think the mkt chops around – so looking at 1.2950/60 now as support before that 1.2920 – topside above 1.3050 mkt will start to get nervous about a deeper squeeze.
GBP – UK GDP at 9.30 and all the chatter is of a higher print. Sterling has performed well over the last 24 hours, with a stale long EUR/GBP market partially flushed out. 0.8115 now remains important topside resistance and the techs target a move back through 0.8000. I think EUR/GBP is the trade, taking out the flip-flop USD price action that has become so equity focused. I run short cross into the release but am a little wary of short term market positioning that may have jumped onto the GDP chatter bandwagon. Anything but an extremely strong print could see a bout of weakness, all be it short lived. I really don’t have a strong view on what the number will be and will trade the reaction. Cable supply into 1.6100 on the books and retail sellers appeared yesterday as we traded just shy of 1.6050. 1.6085 and 1.6110 topside tech resistance. Support at 1.6020, 1.5960 and 1.5920.
JPY – Well since mondays break above the 200 day (79.48 today) we have pretty much been stuck 10 pips around 79.85. However despite some gd exporter selling and rm/lev profit taking we have held like a rock at 79.70 on the downside weathering x jpy selling/equity sell off – Today we get the bounce and its whether we can sustain the break at 80.00 and push towards 80.50/80.70 topside. Nikkei printed more detail on BOJ action next week at 10 trl JPY and 700 bln jpy stimulus package all towards the top end of expectations. On the day 79.70 remains short term support before that 79.45/50 break up lvl – topside looking at 80.65 as june high before the top of weekly cloud at 81.00. I remain long and try and keep the patience to move with the grind.
AUD (1.0367) – sound like a broken record, but 1.02-1.04 remains the range for now. We have good supply up to the figure, chunky stops kick in through 1.0420/30/40. Trade the extremes until proven wrong. NZD topical in the wake of the RBNZ last night, nothing really new to report though it certainly wasn’t as dovish as mkt participants had expected. AUDNZD held resistance round 1.27 figure perfectly, downside nothing in the books now until 1.2550 where we run into a few bids. 0.8240 is first resistance level in the bird, we see some supply creeping into the books directly above here. G’luck!!
CAD – Nigh on impossible to trade usdcad at the moment, traded through 0.9900 yesterday taking out some corp demand we had in our orderbook to a low of 0.9889 and the market looked happy playing the pair from the short side after the BoC. The MPR in the afternoon threw up another curve ball with Carney saying the case for the adjustment of interest rates is less imminent coupled with lower CPI and growth projections. This sent USDCAD from 0.9915 to back above 0.9950 with people throwing the towel in all over the show. The 100 dma and 200 dma still come in around parity which is an important level of resistance we have stops above here. Patience is being tested and I think now really more about whether stocks can hold above 1400 and what eurusd has in store for us. Square for now, below parity tentatively short hoping Carney has had enough of putting forward his two cents. US durable goods and jobless claims today. Resistance 0.9970 1.0000 1.0080. Support 0.9880 0.9820 0.9800.
Scandies – Riskbank day is upon us once again and after yesterdays shocking confidence data EURSEK looks like it will test this key 8.70 resistance level today regardless of the outcome, but the price action on last months rate cut (a quick 5 big figs higher on the morning but 15 big figs lower over the next week) is not to be sniffed at. I personally do not think they cut today so what’s more important is what they signal into year end where a cut is almost a guarantee according to rates. I think people will look to fade SEK weakness but given the importance of this 8.70 level a sustained break above here basically eradicates the summer move down to 8.20 so it really is all about what Ingves and co do. EURNOK maintains its bid tone and keeps being bought into the afternoon fix, happy to buy a dip (if it ever comes!?) back to 7.42/41 I think 7.48/50 should hold firm at first go. NOKSEK purely dictated by the Swedes today, bids around 1.1550 and stops above 1.1680/90. Good luck. EURSEK support: 8.59 8.55 8.52 resistance 8.68 8.70 8.74. EURNOK support: 7.35 7.30 7.25 resistance: 7.45 7.48 7.50.
Barclays Capital