Market still looking for that elusive consensus trade

Japanese traders returning from a long weekend punished the Nikkei, taking the bourse lower by over 2.3% on the session while the JPY tried to play the correlation but unconvincingly so. Having said that though, the headline USDJPY pair does trade higher this morning running into first purported resistance at 103.80 and stalling there at first attempt. Elsewhere slightly mixed data out of the land of Oz saw the little battler take another leg lower overall and continues to trade heavy for the European morning. The EURUSD on the other hand took a leg up first thing today on comments from Nowotny which in their entirety amounted to nothing new or concrete but enough to send the unified currency higher against the greenback where it ran into a solid line of offers into 1.3700. UK Inflation data printed this morning and proved to be the lowest in 4 years and the first time the indicator has reach the BoE target in about as long. Printing 2%, the Cable which shot higher on thin stop hunts and buy the rumour, sell the fact price action printed a high of 1.6447, to then come straight back on the release. Confusion it seems, reigns supreme for now.

With morning data releases out of the way the market has for now settled into a coma of sorts and awaits US data in the form of retail sales and business inventories this afternoon. Many are looking for some sort of confirmation out of the latter set of results for further tapering at the upcoming FED meeting in a 2 weeks time. Anything to confirm or refute at this stage seems to be what the market is looking for. In short a catalyst so as to form a consensus view.

As far as levels on the day are concerned;

EURUSD: I still remain mildly bullish the cross on the “take your brain out and trade” basis. With that in mind, the market sits somewhat short on the day having lost EUR against the USD into 1.3700, and apparently the same Asian names have more to go higher, but they’ll run into uncomfortable buyers on stops sat at 1.3715/20. On the downside shorts will be very happy to see 1.3605/15 print so as to square up. Personally I think they’ll need to buy them back sooner if they can…

GBPUSD: Equally I remain bullish the Cable, however form a risk/reward perspective fancy it lower before I commit in any real size or conviction. I’m looking for (albeit not today) 1.6300 or thereabout s to start building positions for 1.6450. On the day though, stops now reside under 1.6375 and buyers come back once again into 1.6330/40. The topside has nothing but profit takers and fresh shorts into 1.6430/50.

AUDUSD: You may notice a theme here… I too am smalls bullish the little battler, but think it has the risk of a swift move to 0.8980 before buyers resume. We’re range bound overall, but more topside works needs to be done in the cross before I can call the consolidation on the top end complete. Sellers join the party topside into 0.9040/50 and again into 0.9080 as per yesterday.

In the interim, helmets on and good luck out there.