EURUSD
Support 1.3750, 1.37
Resistance 1.3792, 1.3850
Relatively calm price action compared to other USD pairs and we hold onto most of the post payroll gains. Whilst above 1.3700 I will remain long EUR/USD, as bad news from the states is the most compelling story in my mind. Conviction levels will remain low though and the moves elsewhere with a big dent in the ‘risk on’ trade will be on people’s minds. I’ll stick to my guns here though looking for a move to 1.3860 initial target. Good broad based buying of spot and interest in topside structures in the options space yesterday must be taken note of. My order book shows the market getting slightly long with stops on a 1.36 handle and profit takers into 1.3850. Mortgage applications at 12:00 and import prices at 1:30.
GBPUSD
Support 1.6115, 1.6063
Resistance 1.6260,
For now, has been rejected from the recent high at 1.6260 (1.6258 the Asian high), with GBPJPY having taken some material strain. I remain very bullish of GBPUSD and I am not too surprised to see the market making hard work of the 1.6200-50 band. Eventually however, I have to believe GBPUSD is heading higher and I intend to persist with long positions via cash and options. 1.6115 represents some short-term support (yesterdays low), and below there, 1.6063 marks the high seen after the UK Employment Report last week. Flows since NFP have been skewed towards GBPUSD buying, however USD selling has been focused upon the commodity-linked currencies in the main.
EURGBP
Support 0.85
Resistance 0.8530,0.8555
Probing above the high from 1.5 weeks ago, we are seeing some light short-covering this morning through .8510. The persistent bid tone in EURUSD since NFP, has encouraged EURGBP higher and the market has been trading this pair from the short side. I am not heavily involved in EURGBP right now, but for choice would seek to fade strength into the .8535 – .8555 band. Support will be found at .8484 and at .8441, where European Corporates have been noted buyers in the recent past. The Bank of England Minutes for the October 9th Meeting will be released at 9.30. Barclays Economics expect a unanimous decision to keep policy on hold, with the bank rate at .5pcnt and QE at 375bn.
JPY
Support 97.28, 97.00, 96.57
Resistance 98.00, 98.55, 99.00
a wave of Spec and Leveraged JPY buy orders being triggered here this morning, as one of the more-popular recent G10 positions is liquidated. In the melee, there has been some evidence of longer-term Real Money clients buying into this X-JPY weakness, but our order book continues to point to further losses on the day. The next material USDJPY support is 96.57, though significant bidding interest is reportedly between 96.50 and 97.00 away from us.
AUD/NZD
AUD:
Support 0.96 0.9560
Resistance 0.9755, 0.9795
What a night! More towels getting thrown into the ring last night as USD shorts got battered. The initial wave of USD selling settled down but then stronger Oz CPI brought even the most reluctant participants into play before Chinese news hit the wires. Reports that Chinese banks have triple the anticipated write-downs ahead of a fresh wave of defaults. This sent the Shangcomp into a tailspin and saw AUD and NZD longs head for the exit. AUD/USD after breaching the 200dma traded from 0.9758 to 0.9631 and NZD/USD from 0.8544 to 0.8392. What a mess. So what now? Well, I expect a nasty few days ahead as participation levels drop in these. Initial levels NZD/USD 0.8390 and 0.8354 support-resistance 0.8436 and 0.8450. AUD/USD 0.9632 and 0.9600-06 support-resistance 0.9679, 0.9701 and 0.9750-58. I run short USD’s but more against the EUR at present. I’ll look to buy AUD on dips risking 0.9590. Buckle up though.
USD/CAD
Not much to see here with ranges still uninspiring. 1.0276 support still intact with 1.0332 resistance. Play that range for now. More later if I see it.
Skandies
Riks and Norges bank tomorrow and the whole focus will be on those. NOK/SEK longs are being lightened up ahead of the show, taking EUR/NOK out of support 8.0730-8.0800. Today will see further position adjustments but ranges, EUR/NOK 8.0730-8.1750-EUR/SEK 8.7300-8.8200, should contain us on the day. The market feels like its getting ready for dovish rhetoric from the powers that be tomorrow, especially with SEB revising down it Norway GDP forecast.
Barclays