EUR – Whippy in this 1.3250/1.3330 range as the mkt trys to work out the next move – Yesterday still some decent demand on the dip from RM and Corp a/cs in eur and eur x’s while topside still some offers lingering 1.3320/40. I remain long with a stop and reassess at 1.3250 looking for another run at 1.34. US housing starts and Philli fed later so looks like we maybe rangey until then.
GBP – No significant UK data today. BBG economic survey at 8:30. Sterling still under pressure but taking a breather ahead of important levels. EUR/GBP needs didn’t like it below 0.8280 and a variety of accounts bought from the lows yesterday. Medium term flows over the last few sessions point to a lower pound. 0.8325, 0.8333 and 0.8350 are the levels above to overcome. Cable should now harbour supply at 1.6030, 1.6063 and 1.6100. We need to crack the band of congestion at 1.5962-75 for the crosshairs to move to the 200 DMA currently at 1.5909. I expect more chop today, with perhaps a more definitive move tomorrow post retail sales. I still look to play ranges but run core short of pounds against AUD and EUR.
JPY – Some more positioning adjustments yesterday on the back of AMARI comments which saw us trade through support at 87.90/88.30 area to a low of 87.79. Some strong RM demand stemmed the tide of selling from lev, stops and spec a/cs and once we got back above 88.35 late in the afternoon the squeeze back higher began. Not suprisingly o/n AMARI backtracks/adds more colour on his comments from yesterday and USDJPY again responds accordingly with another run at 88.80. For now i continue to think mkt will look to be long into the BOJ meeting next week so dips will still be bgt so still room for further upside towards the recent highs at 89.50. On the day 88.30 then 87.80 key lvls downside while 88.80/00 contains a few stops topside
AUD/NZD – we have finally realised some volatility and traded a range in excess of 50 pips. Amazing! Incredible! Expecting BIG things today now, the order book has slightly changed complexion with bids creeping in down round 1.0485/80 for now. Aussie employment data was the catalyst, news on the London open of this $14b impairment charge taken by RIO certainly won’t be helping general sentiment. Topside a few stops creeping in through 1.0540, nothing in the way of offers until range highs at 1.0580. AUDNZD breaking through small support on the day here at 1.2520, I expect this to slowly edge lower but it will very much be a grind. Fairly square position wise in the antipodeans at the moment.
CAD – Continued lethargy in funds which is slowly grinding higher and looked like we might take out 0.9880 resistance yesterday as the crosses run out of steam a bit but alas we couldn’t do it, however the inability of USDCAD to make any sustained move below 0.9830 leads me to believe we will test the topside sooner rather than later. There will be stops above 0.9880/90 and think it could be worth buying the break of here looking for a test then of 0.9920/30 before I would look to resell. Orderbook has some RM offers building around 0.9900/10 but little else. Swathe of US data this afternoon, including housing starts, jobless claims and Philly Fed. Resistance 0.9880 0.9900 0.9960. Support 0.9830 0.9800 0.9730.
Scandies – Topsy turvy ol’day in Scandies yesterday, initially we walked in to EURSEK around 8.63 before some decent leverage demand took us quickly up to 8.67, then European corp supply (plus Reinfeldt saying he doesn’t see the strong crown as a problem) took us back down to sub 8.63 briefly in line with some good NOKSEK selling from leverage names on the false break of the 200dma around 1.1640/30. And to top things off good local demand for EURSEK into the WMR fix in the afternoon took us from 8.64 to 8.66 again, phew. Ultimately I think you can buy the dip down to 8.62 on the day with a 8.59 stop as I think for the medium term players we get better levels to sell EURSEK, ideally between 8.70/73. The Norges bank are giving the Japanese officials a good run for there money in terms of currency catchphrase, it was the turn of Olsen yesterday who said that it was too early to expect the Norges bank to change the rate outlook due to strong crown this was around the time EURNOK was testing 7.43/44 resistance therefore instigating a quick move back to 7.40, we have consolidated here for now and think 7.43/44 is short term top in place and people will be leaning against it with NOKSEK looking to regain ground above 1.1700. EURSEK support: 8.59 8.55 8.50 resistance 8.6650 8.70 8.73. EURNOK support: 7.38 7.32 7.28 resistance: 7.43 7.45 7.50.
Barclays Capital