EUR – Dragged by eurjpy earlier in the week now its catching up to the general improved risk sentiment and squeezing the week shorts put on pre/post draghi at the start of the month – After closing back above the 200 day (1.2805) we havent looked back running some stops there at 1.2900/08 – For me decks much clearer and we have room to 1.2930/50 topside , while 1.2830/50 should provide support now on dips – IFO at 9am will provide a further focus for the day – Bias still favours higher on the day so look to buy dips to 1.2860 while 1.2950 should cap us.
GBP – BBA loans for house purchase 9:30. Thanksgiving hangovers, a light data day, with German IFO the highlight at 9:00 and noticeably thinner liquidity set the tone for the day. So, find the weak side. EUR/USD stops going pop as I write this through 1.2900. USD/JPY longs may also be vulnerable but for the fact that the market may also be eager to buy a dip. Cable and EUR/GBP will probably just wash around today. 1.5977 and 1.6000 resistance, with 1.5920/10/00 support. EUR/GBP sell zone 0.8087-0.8100 on the techs and I’m already fading as it seems we are only up here on the back of EUR/USD stops. Back through 0.8065 and we could drift into 0.8030. I’m going to keep it fairly light today, with market vulnerable to news headlines.
JPY – Disappointing price action on the break of the fibo lvl at 82.70 yesterday – Heavy buying 82.55-84 didnt lead to us following through and taking out barriers 83.00+ in thin thanksgiving mkts. Instead we saw a London afternoon slide back lower – O/N the Abe WSJ article getting some attention where he softens his aggressive tone slightly – Ultimately i continue to think usdjpy is a buy on dips, and if we do see a move through the lows o/n at 82.18 that 81.50/81.80 provides good opportunities to buy as we get closer to the elections. Added to longs on break of 82.70 yesterday and to date disappointed – very much about if we can get back above 82.50 on the day as longer we don’t may lead to a deeper correction.
AUD – AUD nudging against range highs at 1.0425/30 here, we see a lot of 2-way at this exact level in the book but run into consistent supply immediately above. I don’t expect any follow through today on a break of this level, as such am happy to fade it on any squeeze above 1.0425/30. AUD continues to remain extremely rangey for the most part, I would not recommend buying/selling perceived ‘technical breaks’ in the current environment. In fact, I would look to fade these as per the strategy today. Have nothing to add on NZD – it will continue to trade in line with AUD until we get some domestic NZ data to shake things up. AUDNZD remains a sell round 1.2760/70, but at this rate a 15-20 tick intraday move would be welcomed.
CAD – Steady as she goes at the moment in USDCAD, retail sales yesterday came out a little worse than expected 0.1% compared with 0.5% f/c but other than that a quiet session flow wise. Still lots of corp interest to buy funds between 0.9950/40 and then stops below the 100dma at 0.9935. This was coupled with some leverage selling of USDCAD yesterday which was absorbed quite easily and as such EURCAD took some of the strain with EURUSD holding in well, more stops await above 1.2900 and then better offers ahead of 1.2950 in EURCAD. CPI today out of Canada so fingers crossed this kicks things into gear, still on buy on dips mode in funds but more as a function of playing the range rather than any bullish USD conviction. Resistance 1.0000 1.0050 1.0100. Support 0.9930 0.9900. 0.9880
Scandies – EURSEK on the move it would seem, some European corp selling yesterday and some lazy longs bailing on the break of 8.60, think there should be support back to 8.55 and certainly 8.50, NOKSEK has stops building back through 1.1710/00 and may help the selling of EURSEK if we breach there. EURNOK also looking to test recent range lows and important support around 7.30/28, think its still worth buying both EURSEK and EURNOK on dips, will look to buy EURSEK around 8.55 and already bought some EURNOK and will add at 7.30. EURSEK support: 8.58 8.55 8.50 resistance 8.65 8.68 8.72. EURNOK support: 7.30 7.28 7.24 resistance: 7.40 7.45 7.50.
Barclays Capital