USDJPY initially moved up to 114.40 today on Japanese benchmarking demand as well as firmer equities. However, equities quickly turned around, and along with the market selling yen crosses, USDJPY dipped down to a low of 113.465. There isn’t much support until 113, so we favour selling the pair around 113.70/114.00, with a stop above 114.20, targeting a break of 113.
EURJPY: Look to sell on any bounces up to 127.20/40, with a stop above 127.50, targeting a move towards 126.50, followed by 126.00.
USDCHF has been trading in a reasonably tight range for last few sessions. There’s key resistance at 0.9900 and selling toward that level remains our favourite play. Support lies around 0.9840/0.9810 for now and given the uncertainty in risk, we see a test of the downside again at some point. EURCHF flows have been very light. The cross is supported at 1.0980/1.0950 with resistance at 1.1050/1.1090.
Cable traded 1.4277-1.4515 yesterday, initially trading to the high but then falling down to the low after January CPI data was digested by the market. The pair has moved lower to 1.4255 today. Look to sell on spikes to 1.4370, with a stop through 1.4450, as there seems to be more room to the downside for the current move. Support at 1.4250, 1.4150 and 1.4080; resistance at 1.4370, 1.4450 and 1.4500.
EURGBP closed above 0.7800 yesterday and looks likely to move up towards the recent high of 0.7895. Support at 0.7600, 0.7525 and 0.7500; resistance at 0.7851, 0.7900 and 0.8000.
NZDUSD has broken below the trendline dating back to January on a combination of disappointing New Zealand data earlier in the week, US dollar strength, and risk coming under renewed pressure. There is a growing risk that the pair will test the January low of 0.6350. Support at 0.6500 and 0.6410; resistance at 0.6610, 0.6680 and 0.6725.
USDCAD price action remains tightly correlated to moves for oil. We expect oil trading will continue to be choppy, and therefor think USDCAD trading will also be choppy. Look to fade rallies above 1.3900, with a stop through 1.4050, targeting a move towards 1.3750.
EURNOK hasn’t reacted very much to the renewed oil selloff relative to price action in other commodity currencies. There is therefore the risk of another test to the upside. However, we would look to fade moves to 9.68/9.75, with a stop above 9.80, targeting a move towards 9.55. Support at 9.5700, 9.5300 and 9.3800; resistance at 9.6500, 9.7500 and 9.8000.
EURSEK: The reduction of longs following the interest rate cut by the Riksbank remains the main EURSEK theme. There is little point in fighting it, and we expect 9.40/9.43 to hold on the downside. We expect to see a fresh test of the pre-Riksbank high of 9.5350. Support at 9.4300, 9.4000 and 9.3500; resistance at 9.5350, 9.6150 and 9.6800. (UBS)