EUR – Traded poorly in the afternoon yesterday after that squeeze 1.2925-1.2983 and with no bounce in asia/late ny above 1.2950 we aggress the stops below to 1.2887 low this morning. This 1.2880 lvl has held well since last friday however stops build below and with European PMI prints later any weak prints will be seized upon to aggress through this lvl. Below here 1.2830 (200 day) and 1.28 (range lows) will be key support into payrolls.
GBP – Construction PMI at 9.30. Cable took out some weak stops yesterday through 1.6150 but failed again at tech resistance 1.6180. That should set the top of the range today, with 1.6085 and 1.6060 short term support. EUR/GBP trading in an orderly fashion within 0.8000-0.8080. Range players though are getting positioned and some weak stops exist just outside the range now, so I wouldn’t be surprised if we get some ‘noise’, especially below. I look to pick up euros on dips to 0.7980, depending on price action if that mini flush out happens. NFP’s at 12.30 could give us something to play with but the data isn’t the game changer that it used to be.
JPY – At the recent highs as we walk in and ahead of payrols today (ldn high 80.34, NY 80.38). The continued grind higher again dragging more people in. The move is supported by stronger US data, with ADP and ISM both printing slightly better, as well we have the continued bad news coming from panasonic and sharp 2 big Japanese corps reporting heavy losses. Suggesting that the BOJ may be dragged into doing more to help these companies in the future. I think usdjpy remains supported into payrols possibly room to go in on new highs around 80.50, then its all about the data – TOPSIDE 80.65 (previous high from june) then 80.95 (weekly cloud top) key lvls to watch – downside 79.70 then 79.30. I went long around 80.00 yesterday with a stop in the short term at 79.60 and will add on stronger payrol data.
AUD/NZD/CAD – just when it seemed like we were finally taking out range highs in AUD, the USD catches a broader bid tone and we edge straight back into this dreaded 1.02-1.04 range. The whole commodity ccy spectrum still trades very well considering the move lower in EURUSD, no doubt a strong equities backdrop is assisting with the eminis impressively holding onto yesterdays gains. I have taken back AUDCAD shorts (stuck b/w a rock and a hard place at the moment this cross) and sold out the opportunistic longs in NZD after the buying the break yesterday, for now I am pretty square and happy to remain that way into payrolls. A quick glance at the orderbook –> 1.0360 should be well supported in AUD, we have more stops above 1.0420 topside now following the failure to ascend higher in Asia; bids in USDCAD 0.9950 and below, offers kick in 1.0010 and higher. Suggests to me more rangebound trading with very little s/l activity either side of spot; AUDNZD supply up round 1.26 figure, very little below in the cross with this in my mind looking quite vulnerable on a technical basis. Biased to see a strong payrolls print today; ADP print yesterday coupled with my inner-conspiracy suggesting Obama won’t allow a weak print days out from the election have be leaning this way. G’luck!
Scandies – EUR/NOK edging through support at 7.3500 right now and a close below here will target multi year lows at 7.2500. Price action is uninspiring though and the grinding nature of the move may have left some accounts sidelined. I look to sell/add to shorts into 7.4150 on the day. Some key events today with unemployment data at 9.00, (cons 2.3%) along with the Oil fund’s Q3 report and watch out for Governor Olsen on the headlines just after 12.00. EUR/SEK a little in limbo but I look to range play here 8.5900-8.6450. Overall I prefer a test of 8.5500 on a more medium term basis.
Barclays Capital