BoA Japan: Watch Kuroda Tomorrow:
Bottom Line: Kuroda is scheduled to speak tomorrow at 11:30am TOK. He will be speaking at Kisaragi-kai which sometimes holds speeches by policy makers. It will last about one hour with Q and A. The discussion title is not announced but last time he spoke last year he talked about economics and monetary policy.
From Yamada San: He usually speaks in the context of what he has been saying but given this is right after the BoJ’s action it will be interesting to hear his thinking around the decision on Friday which resulted in the unusual 5-4 splits.
GS: G10 FX SPOT TRADER VIEWS POSITIONING => We currently favour USD longs across the G10 spectrum (vs EUR, JPY, NZD). In GBPUSD, we’ve rotated from cash into a month-end downside option.
Short EURUSD => In EURUSD we like to sell at levels of 1.2520-40, with key levels for the session: On the topside, 1.2530-35 are the Asian highs and support comes in at 1.2470 and then 1.2439 (YTD lows). S/L trailed to 1.2560-70.
Long USDJPY => We believe market positioning has still room to grow and the like the pair higher in the next few days. Levels for the session are: support at 112.80 and then 112.50, with resistance at 114. S/L 112.20.
Short NZDUSD => Here we still rather play straight short NZD vs USD than vs AUD for now. Levels to watch: support at 0.7705/15 (cycle lows), resistance at 0.7880 (Friday’s high).
Short GBPUSD through Option => We rolled majority of cash shorts into end of month downside option. Levels to watch: support at 1.5900-20 with topside resistance 1.6020-40.
Citi: Overnight – AUD provided the excitement overnight as a host of data pushed pair to a low of 0.8644 (close to Oct low @ 0.8643). RBA unchanged statement seemingly helped the Aussie to recover and our Asian trader sold the uptick.
USD took a bit of a breather in the Asia session and you can argue that with ECB and FOMC ahead this is to be expected.
Similarly in USDJPY we saw Japan come back after a long weekend and buying interest dominated (could very well be retail taking profit on the their carry positions ?), Nikkei posted similar retrace after being up as much as 4.1% intraday is now down to a more reasonable 2.7%. We would still buy into dips in USDJPY down to 113.20.
If you’ve missed it there’s quite some focus from our TECH team on CAD : USDCAD is now approaching the trend highs and is in danger of breaking out. Should we see a rally through 1.1385, a test of 1.15 is likely to be seen in the near term followed by a move to the 1.17 area, probably by year end. I have charts and more details if you want/need them.
Barx: Massive 5 yards of 1.2500 expiries today suggests a Malcol Mclaren style 1.2475/25 buffalo gals around the outside session ahead till we clear that 3pm hurdle. Bigger picture – still in sell rallies mode 1.2440 /1.2550 on the wide. While 1.2550 caps on a close we are headed lower towards 1.2360/80 area probably 1.2240. Supports 1.2475 1.2440 1.2390 1.2330 1.2240 – resistances 1.2535 1.2550 1.2600 1.2665.
Eur/Chf 1.2045/65 – $/Chf 0.9600/75 on the wide.
$/yen 114.45/50 114.80/85 and 115 barrier zone the topside hurdles – supports 113.25 112.80 112.55. Eur/yen 142.40 143.00 143.50 143.85 resistance – supports 141.80 140.60 supports.
Cable struggling topside as the cross finds demand into 0.7800 – resistance 1.6015/20 1.6045/50 while that caps look for retest 1.5940 probably 1.5855/75 area. Topside loss of 1.6050 on a close concerns for 1.6125 flush. Eur/£ 0.7800 0.7770 0.7755 supports – topside 0.7830/35 0.7850/55 resistance
Oil Crude supports 77.28 2012 lows then 74.95 2011 lows with 73.625 50% of the rally 32.4 – 114.85