EUR – A slug of EURxxx buying yesterday morning primarily in EURJPY and EURCHF by corporates helped support EURUSD in line with better than expected PMIs across the board. Some spec USD buying and magnetic stops around 1.3315/20 saw EURUSD test the lower end of the recent range before NYC came in and USD selling for the WMR benchmark took us to 1.3373. In short , a chopfest. Orderbook has good offers around 1.3400 and further stops below 1.3290/80. It remains a sell on rallies but will only be playing at extremities at the end of this week. Best of luck
GBPUSD – Has traded a rather narrow range in the last 24h. Leveraged and Corporate demand has been noted sub 1.5575, though 1.5610-20 is offering good short-term resistance (1.5608 and 1.5610 were the lows from Monday and last Friday). I am square at current levels, though for choice, would prefer to sell a rally above 1.5650, expecting 1.5752 to continue to form the upper end of the broader range. Any loss of 1.5496 (low last Thursday), would suggest the downside could begin to develop, and I do think the market will soon start to focus on Governor Carneys first speech since the QIR (with a bearish bias), which will be on Thursday 29th.
EURGBP – Has failed between .8573 and .8577 in each of the last three trading sessions. I think rangebound trading will continue, with .8510-.8580 the near-term parameters. I sold the rally into the .8560-.8575 band yesterday afternoon, and I will retain that position into this morning’s second reading of Q2 GDP. I have been a far better buyer of EURGBP this week for Corporate activity, and I do have a bullish tilt to my order book. Personally, I prefer to sell rallies however.
JPY – Stopped on the expected resistance at 99.15 (high traded on 5.8), but does trade very constructively overall. Having tried a small short position yesterday morning, I covered back on the breach of 98.66, which was last week’s high. I do note this morning, that my order book has a curiously bearish slant to it, with selling to be done over the next .5pcnt to the downside. I am square now, but would expect any correction back to 98.50 to attract buyers. X-JPY is likely to take direction from sentiment in other core markets, but certainly has some tailwinds for the time being. Client flow has been low volume in the last 24h, though the general pattern has been Real Money supply vs. HF demand.
CHF – A mix of corporate demand below 1.2300 and spec profit taking ahead of 1.2360 has framed things in EURCHF recently. We saw some good RM demand for USDCHF on the break of 0.9250 yesterday via voice and ecom but offers around 0.9290/0.9300 helped capped things. We sold USDCHF for the afternoon WMR benchmark and would still look to reload longs around 0.9220-00 on the day but lurking in nomans land here really with most desirable stop on longs should be placed below 0.9100 which would be south of a decent band of support loaded with corporate demand. Patience needed, best of luck.
AUD/NZD – Another volatile overnight session for AUD/USD after we cleared some stops back through 0.9020 trading a high of 41. We continue to be better sellers of AUD/USD on rallies for lev names and first downside targets are yesterday’s Asia lows at 0.8932. NZD/USD has struggled against 0.78 and we saw good two-way interest ahead of this level yesterday along with demand for EUR/NZD 1.7020-50, and once again this morning that 0.78 level was the low and is now very good support. I remain short AUD/USD with a stop above 0.9040 still and will look to sell the break of 0.78 in NZD/USD with a tight stop above 0.7830.
CAD – Weak retail sales data (-0.6% vs cf. -0.4%) did little to help the already under pressure CAD, as we bought a very good amount of USD/CAD 1.0490-1.0510 for a mix RM and spec names pre-number and then were paid for even more 1.0515-30. 1.0608 (July highs) now firmly in sights but some profit-taking 1.0560-80 to get through first. GBP/CAD has become a popular trade this week with models buying the break of the Q2 13 highs at 1.6260 then again through 1.63, with 1.6475/65 representing the top of the 2010-2013 1.52-1.65 trading band. There are stops building below 1.0480 in USD/CAD from a lot of names who bought the break of 1.05 whilst I think 1.0430/40 I think should be the correct stop if looking to take on 1.06+.
Scandies – Swedish unemployment data didn’t disappoint (7.2% vs. 7.6%) which was followed by good demand for SEK, in particular vs. the USD 6.52-53. I stopped out of EUR/SEK back through 8.74 but NOK/SEK was the stand out mover as the market took on 1.07 barriers and couldn’t manage a bounce back above 1.0710 post-expiry. We are now probing big levels in NOK/SEK having cleared previous lows around 1.08 that go back to 2005 and the 2004 low at 1.0287 now looking like a possibility whilst 1.05 is likely to be the first good level of support. We bought a lot of EUR/NOK 8.11-8.1350 as the cutting continues on longer-term short positions; 8.20-8.25 will be a good region of resistance (series of 2010 highs). I think for today you buy EUR/NOK on dips down to 8.10/12 with a tight stop through 8.0850 and EUR/SEK I’ll be looking to sell on rallies above 8.72 (risking 8.75) and will add on any break below 8.67.
Barclays