EUR – It’s grinding higher but definitely lagging the eur ‘x. It seems corp offers in the mkt up to this 1.3400/05 resistance slowing the moving higher. For me looking for 1.3340/50 to provide support on the day and expect a break of 1.3400/05 and a test of 1.3450/1.35. I remain long and will now move my stop up from 1.3250 to 1.3315 and will look to add on a break at 1.3405/10.
GBP – UK retail sales 9:30. Sterling still under pressure. Decent breaks in EUR/GBP should keep us on a firm footing and support now 0.8325/33 and 50. Topside, clearance of 0.8400 yields 0.8506 2012 high. Cable targets its 200 dma at 1.5910, we just need to satisfy retail demand into 1.5950. 1.6040 now resists.
JPY – Mkt back on course buying usdjpy into the BOJ meeting on tuesday. Confirmation from Japanese officials that JPY weakness is still the key focus helping the rally. For now looking at 89.50/70 being short term support and expect an assault on 90.50/91 as we get closer to the meeting. Seeing strong RM demand now for the last 3 days and this to me confirms the trend change. Now stops on order book above the asia highs before selling 90.50/70.
Commodity CCYs – China GDP data overnight the focus and did slightly beat expectations at 7.9 compared with 7.8 despite the FT splashed with ‘China records slowest growth for 13 years’ headline, all relative I suppose. Still not an AUD focused world though and actually some decent EURAUD and EURNZD short covering from leverage players weighed on AUDUSD trading down to 1.0509 where there is and has been over the past 48 hours some decent local corp interest to buy related to tax deadlines. Might be a small flush out in AUD once this corp demand abates but still favour buying dips in AUD when you look at stocks so anything around 1.0480/70 on the day I think is a buy. NZDUSD a little bit lower overnight after a slightly disappointing CPI print but EURNZD the main catalyst taking out stops above 1.60 and also some AUDNZD buying on the break of 1.2560. USDCAD still a little sidelined and initially yesterday looked a little out of sync but don’t underestimate the power of EURCAD, CA bank offers taken out above 0.9880 but little follow through, think overall still like buying CAD if USDCAD gets anywhere near 0.9900 and overall want to buy AUD but all about EURxxx for now.
Scandies – Explodio in both EURSEK and EURNOK and decent short covering in EURSEK above 8.68 and EURNOK above the 200dma at 7.43 with both RM and model guys consistent buyers with us, expect both to be well supported for now and will look to buy EURSEK on the day around 8.65/66 and EURNOK around 7.43. Also sitting long some NOKSEK for more medium term position and think if this holds 1.1630/20 then should be room to squeeze and test 1.1750. As I have mentioned previously still happy to be fading EURSEK at some point at these levels for longer term move back lower but ideally would be doing this around 8.70/73. EURSEK support: 8.65 8.59 8.55 resistance 8.70 8.73 8.80. EURNOK support: 7.43 7.38 7.32 resistance: 7.48 7.50 7.53.
Barclays Capital