EUR – After Fridays break of that key resistance at 1.3400/10 Friday on the LDN open, rather quiet and rangey o/n in Asia stuck 1.3440/70 – I continue to like further upside but looks like we may need to be patient first today with cable breaking that support at 1.5750, usdjpy off the highs with Nikkei and eurjpy just looking like some profit taking first thing. Like to buy 1.3400/25 stop at 1.3350 looking for 1.3475 then a break ultimately of 1.35.
GBP – No UK data today. Well, we’re still on the ropes and leverage names continue to sell cable on the open, taking us to new lows. 1.5691 is the 38.2 fibo level and then 1.5618 trend line support. I have some small buyers lined up over the next 40 pips or so but nothing to materially change the tone. I expect continued supply from the leverage/real money community this week. EUR/GBP also struggles to pullback and has trend line resistance firmly in its sights at 0.8628 on the day. No reason to buy pounds….still. Levels: Cable, resistance 1.5757, 1.5780, 1.5830. Support 1.5691 and 1.5618. EUR/GBP: Resistance, well not a lot until 0.8628 and 0.8343. Support, 0.8530, 0.8485 and 0.8463.
JPY – After the extension through that 90.25 in ny/asia at the back end of last week we saw continued RM demand taking us back to highs around 91.20. We have seen a new high in asia this morning at 91.26 but no further follow through. With the Nikkeii off 1% we have seen profit taking from macro names off the highs. Looking at support 90.25/90.40 zone – going into payrols on friday i continue to be in buy dips mode looking for an ultimate test of 92.
AUD/NZD – good pocket of support in AUD down round the 1.0390-1.0400 level, below here we target the 200dma round 1.0310. I am square at the moment, looking to re-sell round 1.0450/60 on the day. We see stops starting to build below 1.0385 now, topside fairly clear. Not a great deal of domestic data this week, the focus will be the RBA next Tuesday though I don’t expect them to cut (c. 10bps of cuts priced). NZD opens the London session on good support, this 0.8350 level is proving quite sticky for now. Still run short the bird, you have a clear chop through either 0.8440 or 0.8480 so take your pick. RBNZ this week, data continues to remain poor but after the hawkish tone set last time round by Wheeler I wouldn’t expect him to back down from this stance any time soon.
CAD – continues to trade very poorly, barriers up through 1.01 figure were done on Friday with no follow through post. We see a bit of USDCAD supply on rallies from here, I don’t mind being short some AUDCAD and NZDCAD with both crosses up against some good resistance here. EURCAD looks set to fly to the moon, out of respect for the break dips back toward 1.35 figure should be bought for now. Resistance in USDCAD kicks in round the figure, and then some thicker supply as we approach 1.0130/40 zone. Downside support comes in at 1.0060. I think ranges will be tight today, I prefer to trade CAD through the crosses.
Scandies – Sweden, Trade balance, household lending and retail sales at 8:30. Scandies have been a little sidelined recently with EUR/SEK getting tired trading its range and EUR/NOK running out of puff on its topside break. I’ll play the reaction to the Swedish data and don’t think the market is particularly positioned in either pair. Levels: EUR/SEK Res, 8.7060, 8.7100 and 8.7200. Supp, 8.6630 and 8.6000. EUR/NOK: Res 7.4500, 7.4775. Support 7.4000, 7.3880 and 7.3500
Barclays Capital