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Spot Desk - Upside Room In AUDUSD
EURUSD was bid Monday but lacked follow through and has opened almost unchanged in Europe. We don't trust this move overall but may have to accept the bid tone ahead of the month-end. Keep it tight and stay flexible for now, only getting involved at the extremes.
USDCHF slipped to 0.9495 from 0.9560 Monday as the market wanted to buy Swiss francs for what seemed to be early transaction of month-end flows. The pair held the important support ahead of 0.9480-90. We expect similar moves today with very little in terms of data releases. Sell rallies to 0.9570-80. EURCHF remains stuck in the 1.0350-1.0420 range with limited interest; play this range for now.
Sterling broke higher late in New York and is starting to test the March highs. We still believe it's a sell up here but technically, there may be room towards the February high. Stay on the sideline today and watch if EURUSD gets capped before selling Cable. UK preliminary GDP will be out today.
USDJPY traded in an extremely quiet 18-pip range overnight with the market awaiting the BoJ decision on Thursday. Boy on dips ahead of the first bigger support around 118.80 with stops below 118.50, targeting Monday's highs.
AUDUSD turned bid late Monday when gold started rallying and broke above 0 .7850, where it was capped earlier this month. RBA Governor Stevens declined to comment on monetary policy ahead of next week's RBA meeting. The pair might still have some room on the upside but we prefer to start fading ahead of the March high of 0.7940 with stops above 0.8050.
NZDUSD is a touch higher as the US dollar came under pressure on Monday, but the market seems to be preparing for a dovish RBNZ tomorrow. AUDNZD has been steadily grinding higher. The next levels on the upside are 1.0455 and 1.0545. We see more room of position adjustments in Kiwi ahead of the meeting but expectations for a dovish RBNZ are accordingly rising.
USDCAD remains heavy as commodities are resilient. The pair is capped at 1.2350 and supported at 1.2060. There is a longer-term uptrend line around 1.1950. Enter fresh longs at 1.20, above the 38.2% retracement of the 1.0623-1.2836 move with a tight stop at 1.1925. Watch BoC Governor Poloz's comments later today.
EURSEK remains rangebound with steady buying interest on dips that get capped at 9.40. Watch Sweden consumer confidence and retail sales data today. EURNOK is holding the 8.30-8.55 range. It has been trading soft for the past few days with NOKSEK inching higher, which seems driven by the interest rate differential and oil having found some support.
Gold had a quiet start on Monday but then ran stops up to $1207.30 from $1188 as two massive buy orders hit the CME during the auction. This move came even though equities closed at an all-time high and Greece reshuffled the team for bailout negotiations. Despite the move today, we still recommend being short gold, with stops placed at the 1215/20 area, targeting 1180/1150 area.