EUR – EURUSD and EURxxx still bid to high heaven at the moment, decent two way over yesterdays month end fix but 1.3540 support held firm and we rallied into the New York close taking out stops through 1.3580 and 1.3600. Stayed above 1.36 in Asia with continued leverage demand for both EURUSD and EURAUD the stand out flows. We continue to like EURUSD higher and initially 1.3680 is the first target and will be looking to add to longs back towards 1.3580/1.36 on the day with European manufacturing PMIs the catalyst and then payrolls this afternoon.
GBP – UK Manufacturing PMI at 9:30. A morning full of PMI’s today as the dust settles from month end. As it turned out there were USD’s to sell and it showed up mainly in cable. Accounts are eager though to put on trades that make sense, long EUR crosses, short JPY and short GBP. There will still be demand should EUR crosses dip even on weak European PMI prints. 1.3470-00 is now key support in EUR/USD and price action remains constructive, with a surprising lack of retrace. Cable for me is a sell into 1.5895, (200dma) or 1.5910 but I’m little wary of robust EUR price action which could catch cable in its jet wash. EUR/GBP maybe a better way to express the GBP weakness idea. Levels though below a little vague. 0.8550, 0.8530 but really 0.8500 is the risk level. Topside and daily trend comes in at 0.8625. If that blows, we can go ballistic. The woolly jumper squad will be pointing to 0.8800 on their maps.
JPY – All about Payrolls today and what happens to US rates in the wake of the data, insatiable demand for USDJPY still on break of 91.60 and 92.00 and then Japanese lifer demand overnight. Expect leverage names to sell on disappointing numbers or any move higher in the unemployment rate but ultimately still want to buy 91.50/40 initally if we pull back otherwise barrier stops around 92.50 and 93.00. Weighing up the emotional fallout of buying at these levels or not being on everyone’s favourite trade is tough, still think we can go higher though. Binary event this afternoon, pay an offer then buy a dip. EURJPY on steroids, stops above 126 and we overall like EURJPY higher.
AUD/NZD/CAD – Feels like we continue to trade a 1.0380-1.0480 range in AUDUSD. We saw strong demand around 1.0390-1.04 yesterday morning before month-end USD selling gave a bit of impetus, but a lot of offers we had 1.0430-50 have now been cleared and overnight we have picked up stops in their place 1.0420-40. On the downside there are small stops through 1.0380 but beyond this we have good demand down to 1.0340. AUD/NZD ran stops through 1.24 and went on to clear the 2012 lows at 1.2370, spurred on by slightly disappointing China manufacturing PMI data and Wheeler comments which gave NZD/USD a lift to trade 0.8423. Kiwi should remain well supported for now on continuing bullish comments from the RBNZ but resistance up towards 0.8470-80 (2012 highs) should be reasonable given the magnitude of the move we’ve seen so far in 2013, above this we have stops in the orderbook through 0.85. Given this will be looking to get long AUD/NZD back down towards 1.23 as AUD/USD should remain supported with continued bullish rhetoric on EUR/USD. Corp supply continues to dominate in USD/CAD after a strong Chicago PMI number and good GDP print, first level of good support should come in around the BoC breakout level 0.9940-30 where we have good demand for a mixture of accounts. On the topside offers now starting to build 0.9990-1.0030. CAD Manufacturing PMIs out at 14:30GMT.
Scandies – Month end demand from the usual suspects in EURSEK took us up towards 8.65 yesterday before some much better PMI this morning straight away has sent us straight down to 8.6050. This more medium term failure at 8.70/72 rather concerning, for now sell rallies is state of play in both EURSEK and NOKSEK for sure. The first sell zone is 8.65/66 and there should be some wood to chop below 8.56 down to 8.50 which is next key level of support. Overall my bias in NOK is NOKSEK related, unemployment at 9:00, people like to sell 7.48/50 but equally good support around 7.40/38 but I prefer NOKSEK lower. EURSEK support: 8.58 8.55 8.50 resistance 8.65 8.72 8.75. EURNOK support: 7.40 7.38 7.32 resistance: 7.46 7.48 7.50.
Barclays Capital