China rate cut provides backdrop for risk rally to start the week. We maintain our moderate stance (less than 1/4 of max risk) and hold on to our long USD position vs GBP, and our small USDJPY short.
{EU} EURUSD Flat => The Greek situation appears to be getting more stressed but it has not as yet applied any downward pressure on the currency. In the absence of real conviction and a less clear divergence story (for now) I have reverted to a flat stance and will just look for any short term opportunities that present themselves: First resistance at last week’s 1.0849 high , followed by 1.0900 with support at 1.0730 and 1.0680 .
{GB} GBPUSD Lower => Election getting ever nearer but polls still too tight to cause decisive turn in GBP and choppy range likely to persist until that dynamic changes. Data focus this week on BoE minutes and retail sales but as with the major releases last week impact likely to be relatively muted. Resistance should now come in towards Fridays highs of 1.5053 with support back at 1.4900.
{JN} USDJPY Lower => A glimpse of April survey data(Empire, Philly) wasn’t enough to comfort markets hoping for signs to confirm view that US 1Q temporary and in passing, with markets reacting accordingly, as USD ended softer on the week. Dips appear well supported for the time being, but with a series of lower lows/lower highs over the past week (119.68/119.07/118.79/118.57/118.52 vs 120.85/120.12/119.73/119.48/119.26) the path of least resistance still feels skewed lower. 118.15/30 will be the next region of support to respect on the move, and we retain our short bias targeting sub 118 over the next couple of sessions.