EUR – Grinding it out as mkt dragged back into buying eur first as we take out lvls at 1.3020/50 and then back on action from FED. Where the explicit targets on employment and inflation were the added extras to the mkt. Today support is 1.3040/50 then 1.3010 topside this 1.3100 has capped us in ny and o/n and offers still seem to be there today as we went and took a look on the ldn open. Through there I expect further buying and the lvls at 1.3140/70 (oct/sept highs) are now clearly defined. Mkt definitely doesn’t feel like it has long eur on in anything meaningful and a break of these topside lvls will definitely drag people in especially going into the end of year.
GBP – CBI trends data at 11:00. The pound remains near the bottom of this list of interesting currencies as the JPY, EUR, CHF etc take the limelight with their own particular stories. I don’t see this changing for now and expect flows to remain light for the near future. My order book is pretty thin too with not much interest until cable gets well onto a 1.62 handle. So, general sentiment and moves in other ccy’s will drive price action. Cable levels: resistance 1.6176, 1.6220 and 1.6275. Support 1.6065, 1.6020 and 1.6000. EUR/GBP support 0.8085, 0.8062 and 0.8030. Resistance 0.8125 and 0.8165.
JPY – It took its time yesterday to go higher after we broke up above 82.85 early in the ldn morning but the follow through since the clean break of 83.00 has been substantial o/n – We have seen gd 2 way o/n with japanese investors buying against various diff a/cs taking profits on longs, however the buying dominates. Looking at 83.20/25 as the downside lvl to watch first off and then 82.85/83.00 – topside stops sit on the books 83.70-84.20 topside and so close to the japanese elections this w/e it feels like these are vunerable in the next 2 days. Remain long looking for 84.00/20 to reduce.
CHF – SNB meeting at 08:30GMT. EURCHF remains well supported but levels intact topside at 1.2135 then 1.2160 and September highs at 1.2185. SNB not expected to raise the floor but this will be their first official opportunity to respond verbally or otherwise to actions of Credit Suisse and UBS. All stops in our orderbook remain below 1.2010, but expect to see some stops through 1.2060-40 below the original breakout level following the Credit Suisse news, but we have some light demand at these levels in our orderbook. USDCHF has found some support right ahead of stops 0.9250-30, next level of support 0.9215 around the October lows. The 0.9250-0.9200 region has been pretty sticky this year, capping the move higher a couple of times in H1 2012 and then acting as support again a couple of times through Q3/Q4 2012.
AUD – AUDUSD holds in well having had a little blip up to 1.0586 after Bernanke had his say, saw consistent leverage profit taking pre FED yesterday which was the stand out flow and orderbook a little quiet, still offers up to 1.0600 then stops above and few bids back below 1.0510/1.0500. The greenback has had a bit of a flogging over the past 48 hours so expect small consolidation at some point, still happy to buy a dip in AUDUSD though and will look to do so around 1.0520/00 initially, NZDUSD made a fresh 2012 high yesterday at 0.8478 and the demand insatiable. Finding it difficult to fight this move for now given the nature of some of the buying, if anything would like to buy AUDNZD around 1.2450 if we see a continued pullback in the cross.
CAD – Funds remains well offered in an environment conducive to risk and one where Bernanke has his hand firmly on the printing presses after last night. We continue to see a decent supply of USDCAD from model and RM clients via both voice and ecom, there are certainly more exciting trades out there but short USDCAD for now still makes sense and offers building in the orderbook around 0.9890/9900 should cap us on the topside for now. Maintain the grind lower in USDCAD for the next week or so barring any negative fiscal cliff headlines we can avoid. Support comes in around 0.9800 but think we take a look at 0.9750 in the next week. CADJPY on the charge primarily thanks to one leg it must be said but now targets initially 85.15 and 85.80, big risk event this weekend but still looks like a buy on dips for now. Good luck.
Scandies – EURSEK caught the market completely off guard yesterday, including myself. A combination of a market short after assuming the pension payment flow had all been done (which clearly it hadn’t) and also some decent corp buying (Renault selling its stake in Volvo taking the blame) took us up through stops above 8.68 and briefly above 8.74 overnight. The close above the 200dma yesterday was significant and with CPI and employment data today and the Riskbank next week my desire to fade has diminished somewhat. The data this morning should set the tone and given 40bps of cuts is priced in for the next two meetings the market is expecting disappointing data. The move in EURSEK clearly galvanising NOKSEK as well taking out stops above 1.1810, think this is starting to look a little overstretched up towards 1.1900 and will look to sell some cross here if we see it. EURNOK being dragged higher by the EURSEK demand but not the focus for the time being, offers still around 7.36/38 and bids around 7.30/28.
Barclays Capital