EUR – Stuck in a 1.3020/1.3120 range, while risk sells off and commodities get hit. Ultimately happy to sell rallies towards 1.3150 with a stop above 1.3220 looking for that move back towards the 200 day at 1.2910 again. However for now need to be patient – Orderbook bare until selling 1.3140-70 topside or bids 1.3000/20 downside.
GBPUSD – I retain a core short and will add to the position, on any correction back towards the 1.54 mark. My central scenario is for a drift lower in GBPUSD, but overall 1.5000 – 1.5450 should contain trading until further notice. The MPC Minutes for March, due tomorrow, do have the potential to accelerate the down move, and I will be watching closely for any specific comments on the implications of the remit adaptation. Expect support between 1.5249 and 1.5270, with selling interest apparent between 1.5385 and 1.5400.
EURGBP – Further grinding gains my preference here, though there is very little to go for in truth. I am square, and would advocate buying any dip into the .8490 – .8510 band, with good selling likely to be found on the approach to .8601 resistance. Corporate demand vs. Real Money supply the ongoing theme, though volumes have been very low in EURGBP since the middle of last week.
JPY – wild ride overnight, admittedly I am slightly confused as to what this should be doing today. 97.71 remains the first hurdle (o/n highs), there appears to be some small resistance here thus far this morning though for the most part the book has thinned out considerably in the past 12-24 hours. 95.80 was the overnight low, a lot of barrier interest was cleared on the run lower so more broadly speaking I still like selling JPY but would prefer to see a dip back toward 96.80 before getting comfortable enough to dip my toes back in. Will keep a close eye on headlines out of the US, I expect these will become more frequent as the US awakes round midday London time. US data out at 1.30PM BST.
AUD & NZD – Big ranges set since we called it a day in London yesterday. In what felt like a delayed reaction to gold slipping below 1400-1430, AUD and NZD finally took a hit. AUD/JPY was the main casualty, taking out stops as we traded from around 102.00 on the London close to 98.75. Models were seen selling AUD/USD through 1.0350 taking us to a brief low of 1.0291. NZD/USD followed suit reaching a low of 0.8378. RBA minutes were broadly as expected, with no change in bias from the board. So what now? As long as commodities stay back footed I’m playing AUD and NZD from the short side. AUD/USD needs to stay below 1.0415-25 for a move back to 1.0250 and I’ll look to lay into a 1.0380-00 blip. NZD/USD isn’t so enticing, as recent Insurance/longer term and bond flows could still be waiting to trip up shorts. AUD/NZD should remain pressured, with a close below the 2010 low of 1.2100 signalling further losses medium term. 1.2320 resistance in the cross.
CAD – Continued buying of USDCAD above 1.0200 in the wake of massive losses in Gold, we took out some stops above the 1.0230 payroll level and saw some leverage buying out of the US but ran into a little bit of supply around 1.0250. Clearly people glued to the next move in Gold but does feel like funds is a buy on dips for now, on the topside 1.0350 resistance is key not sure this is quite in the cross hairs yet but with other commodes winging around 9% a day its worth considering! Initially you can buy funds back to 1.0200 on the day risking 1.0160 but ultimately the catalysts are elsewhere. Support: 1.0150 1.0080 1.0000. Resistance: 1.0250 1.0300 1.0350.
Scandies – Granted I can understand why Gold is stealing the headlines at the moment but Oil isn’t too far behind having come off quite hard but the relative ccy impact compared with what bullion is causing is minimal! Given last weeks inflation data and now oil slipping I think EURNOK should be back at 7.58/60, sitting long EURNOK and crossNOK for this reason but fully aware that patience is needed. 7.52 held last week so should be some stops above here which if breached could take us to 7.56. EURSEK rallying before the Riksbank tomorrow on some position squaring, I don’t have a particularly strong opinion on what could take place policy wise, few people maybe pointing towards lower rate path but I can’t help but think if we see it above 8.40/42 there will still be more than enough interest to sell especially if NOKSEK starts to tick lower. Sell on rallies still the state of play for now. EURSEK support: 8.30 8.25 8.18 resistance: 8.40 8.42 8.46. EURNOK support: 7.45 7.42 7.40 resistance: 7.52 7.56 7.60.
Barclays