EUR – Well eur finally came lower yesterday, playing catch-up to the broader usd strength theme. The close well below the 200 day and below 1.2950 unleashing fresh selling from model and lev a/cs. It stayed offered despite a wave of usd selling yesterday afternoon with 1.2890 /1.2900 providing decent resistance, as it has in Asia. Downside support is at 1.2840 and expect that to be key again today. I think mkt will pay attention to US cpi (due to fed disinflation focus) and claims again today so think eur trades a 1.2820-1.2900 range until this afternoon when we get the data kicker to support the recent usd strength or see a pullback into the range. Currently sq eur but will sell 1.2890 and 1.2930 with a stop above 1.2960.
GBPUSD – Continues to gyrate around the key 1.5200 – 30 band of support. Flows were a little more balanced on Wednesday, with some Real Money buying offset by Systematic selling. My sense is we are set for a shift into a new lower 1.4832 – 1.5227 range, though today, the US data-flow is likely to dictate. I am short and will add to the position if a close below 1.52 is achieved. GBP is currently trading more resiliently than most other G10FX against the USD, and until a local catalyst emerges, that is likely to remain the case. Next downside target will be 1.5034 (4.4 low), with firm resistance on the approach to yesterdays 1.5272 highs.
EURGBP – Firmly back into the well-trodden range, having attempted a topside breakout on Wednesday. This cross will remain sidelined for the time being, with extremes at .8398 and .8416 likely to be faded. I am square here and expect focus to remain elsewhere, where more interesting opportunities exist. Leveraged clients were operating on both sides on Thursday, whilst Corporates remain persistent sellers of EURs.
JPY – Stronger Japanese GDP print o/n showing things are improving in Japan, but still early in the cycle. Usdjpy has managed to hold onto 102.00 as it held 101.80 in LDN yesterday – I think until this afternoon we are in a holding pattern 101.80/102 should contain the downside while yesterdays highs at 102.77 should cap us in the short term. Expecting the CPI/Claims data to be a focus and if usd supportive I expect new highs towards 103/103.50 again – Stop on the books now above 102.80 – downside on a weaker print has stops building below 101.80 before bids come in at 101.30/50 area.
CHF – Gd follow through yesterday morning after the break up above 0.96/0.9625 in ny – model and momentum a/cs all buying usd and eur against chf, however with eurchf failing at 1.2525 resistance usdchf topped ahead of 0.9750 and fell back into the middle of the recent range with lev profit taking dominating. Since then we have settled down and holding at 0.9640 o/n in Asia. If this uptrend is to continue then I expect 0.9640/25 to be the buy zone on dips and looking at 0.9590 to hold on the downside before a fresh assault back at 0.9750 and higher. Topside 0.9720/50 resistance now – in eurchf 1.2390-1.2420 short term support some big lvls topside at 1.2550/1.2569 (old spike high) if this breaks I expect weaker chf to dominate but until we do its a fade against these lvls topside.
AUD & NZD – AUD/USD breaks 0.9850 as short term players get stopped through the level. 0.9828 low and will be interesting to see if we get any kind of bounce to indicate that was a pure s/l run. Lack of domestic data and only HSBC flash PMI of any real consequence for the rest of the month tells me we focus on the USD and commodity markets. Tech levels are little vague all the way until 0.9660 on the downside. Topside resistance now 0.9850 and now 0.9920 set up with some supply noted yesterday. Feels like we play it from the short side still although I find it difficult to sell dips. I think the pace and one way nature of the move since 1.0200 has left the fund community with much smaller positions than they wanted. AUD/NZD also breaks 1.2000, taking us out of the recent range. 1.1935 next support in the cross. NZD/USD a little sidelined but will shadow any general USD move. 0.8280 good resistance. We need to crack 0.8150 for further losses.
CAD – As AUD/USD runs stops through the 2008 highs at 0.9850, AUD/CAD in focus through parity and for now this seems to be keeping a lid on USD/CAD which still seems to be lagging the USD strength seen across the rest of G10. Canadian March manufacturing sales disappointed yesterday afternoon (-0.3% vs. +0.6% cons) and the market clearly thought that was going to be the catalyst for some catch up in USD/CAD. We cleared earlier day highs at 1.0211 to trade a high of 1.0220, which will now be first levels of resistance in the pair, but soft US IP was the gate crasher at the USD party. Despite this the USD holds in well overnight and I sit cautiously long USD/CAD looking first to test 1.0220 then April highs at 1.0295. First support comes in at 1.0152 which was the previous high on the month and then the 100dma at 1.0103.
Scandies – Norwegian GDP at 9:00. The focus will be on the NOK today and that GDP release. We have struggled to move out of tight ranges since the Norges bank announced rates on hold and good news on the domestic data front. 7.5175-7.5570 has pinned us for the bulk of the last week. 7.5770 above there should be met with supply. NOK/SEK shook out some longs yesterday and more stops are probably lurking sub 1.1375. GDP will decide the next leg but real money profit taking above 1.1450 has squashed the up move and tech break of 1.1410. EUR/SEK disappointed yesterday as we retraced all gains made by the pair post Swedish CPI. It felt like the move back through 8.5800 was another stop loss run, helped on its way with short term NOK/SEK longs getting waxed through 1.1400. Suggest we are at the mercy of NOK/SEK again but 8.5750-8.5800 now support with resistance established at 8.6550.
Barclays