EUR – headless chicken trading continues, this is certainly being exacerbated by liquidity with year end flows pushing this round wildly. I have no strong views, and even less inspiration to trade this. Long gamma is king in these conditions, some great intraday opportunities to job this are being presented. We are picking up more stops below this key 1.3180 level, topside very thin. Have a bias to see this lower today, that said selling here is not really the right level. Happy to sit on the sidelines and see how this all pans out – judging by the px action over the last few days, strap yourselves in. One sneezes and this moves 20ticks at the moment.
GBP – UK GDP at 9:30. Participation levels and liquidity have dropped off a cliff since lunchtime yesterday. It looked for all the world that EUR/USD would be sitting on a 1.33 handle and cable testing 1.6310 again. Instead, the buyer went away and a few sell orders went through state side in EUR/USD and you could see the lack of depth in the market. The subsequent sell off in stocks in another, out of the blue move, has put the USD on a more solid footing. A few stops below recent lows in EUR/USD make me wary of trying a long again for now but I’ll see what flows start to go through this morning. Today could be choppier than a night out with Hong Kong Fuey. Cable levels: support 1.6240, 1.6190 and 1.6155. Resistance 1.6300, 1.6310. EUR/GBP 0.8110-0.8165 range.
JPY – A lot of profit taking in USD/JPY early doors yesterday in London below 84.00 which was then followed by very good macro supply overnight after US headlines at similar levels. For now 83.85 acts as good support containing the move yesterday morning and overnight in Asia. Stops looming just below here before we pick up demand back towards 83.50. Expect to see good supply on rallies from Japanese names and those taking profit back up to 84.50. EUR/JPY stops sit below 110.60 which could come under pressure if EUR/USD has a go at stops below 1.3180.
AUD – I expect this to hold above the 100dma for the remainder of 2012, as such I will be buying dips down to the figure from here. I’ll be keeping positions light, this is no time to be hitting home runs with liquidity still very poor. Bids kick in 1.0420 and lower, topside offers round 1.0520 so a lot of air between spot and our resting supply. AUDNZD continues to squeeze higher following the weak GDP print out of NZ – this has further room to run, though as with most things AUDNZD related unless privy to the flow it can trade quite irrationally.
CAD – CAD – saw some RM demand yesterday around 0.9880, taking profit after the last NFP/CA payroll numbers. We continue to hold against resistance 0.9890-0.99 and continue to make new highs on the week but still some supply 0.99-0.9920 in the orderbook for now, before we hit stops through 0.9930. Liquidity not great and feels like US fiscal cliff news will dominate price action despite a strong US GDP print and CA Retail sales yesterday. On the downside, bids have been raised now start from 0.9870 through to 0.9840.
Scandies – Norwegian Unemployment at 9:00. All about the SEK yesterday as EUR/SEK slips almost 20 big figs on the week with little bounce. 8.5900 now key downside support. Longs bailing from the 8.7250 topside break and fresh macro and prop selling has kept the pair under pressure. 8.6700-8.7000 should now harbour supply. Despite the trail of weak domestic data recently, its seems like the SEK maybe one of the currencies in favour going into next year on a more medium term play. Look to play from the short side in EUR/SEK. EUR/NOK still confined to 7.32-7.42 for now.
Barclays Capital