Janet confirmed while we wait for Mark and Mario
Australian trade data was perhaps the only real standout piece of news to hit screens overnight as it came in better than expected with a narrowing trade deficit thanks in large part to fewer imports, all in all shrinking significantly since the July blowout print seen last year. Oh and of course, we now have a fully confirmed new FED chair, Janet Woody Yellen. Otherwise it was a quiet old night as few US participants have been able to make it to screens due to inclement weather and their Asian counterparts are only just getting back to desks themselves. The USDJPY continues (for now) to play the Nikkei game and with the bourse looking a little weaker overnight so too did we some strength in the JOY and thus a dribble lower in the USDJPY. This however has been seen by many as an opportunity to play the JPY via crosses like the EURJPY, GBPJPY and the like.
On the day we’ve got Euro zone CPI flash estimate across screens and some will be looking for signs of further faltering inflation as a cue ahead of Thursday’s ECB meeting. Further out we’ve also got both CAD and USD trade balance data in the North American session.
Lots of tier one shops out there calling for another round of stronger USD early in the year and that being the main theme as we head further in. I’m not sure and frankly remain unconvinced (well at least for now). In line with this of course they are also calling the EURUSD, Cable and AUDUSD lower. The little battler has cause all of its own to be lower, not at all related to the purported USD strength we should apparently expect. While the EURUSD, well simply, it’s the same tune being played over and over. Get short EURUSD and hold on for the wild (not) ride. I’m not an advocate of being short the EURSD, but having said that, I’m not rushing out to buy it either. Instead I’m just collecting splinters (for now). And the Cable, well, I like it higher and for once in FX land data actually supports the case.
As far as levels on the day;
EURUSD: 1.3600/1.3590 is apparently full of interested bids and those Asian names short form 1.3620 yesterday will happily buy them back at 1.3580 given the chance. Not much else out of my contacts regarding interest in the pair other than to say that there isn’t much by way of sellers until (if) we see 1.3680 and higher.
GBPUSD: 1.6380 has good buying interest and that extends into 1.6350. On the topside nothing by way of profit takers or anyone too keen to sell it before 1.6480.
AUDUSD: Purported local demand into 0.8900/10 has kept the little battler supported this morning, however, if that bid gets pulled I suspect 0.8870/80 gets a rather quick look for stops.
Helmets on and good luck out there today.