Talk me a river, cry me a dollar

Antipodeans jawboning is all the rage these days and everyone is getting involved. The irony of having one of the highest overnight cash rates of the developed world and asking for their respective currencies to be trading lower seems lost on the likes of the RBA and RBNZ governors. At least in the case of Australia they’ve got the IMF looking over them and fighting their corner also, which could (doesn’t) add credibility to their “interventionist” chatter. But with all due respect to the Kiwi’s, when they start mentioning direct intervention in FX markets to devalue their currency, I can’t help but get the giggles. I mean are they going to get the sheep that populate their nation to sell their wool etc… You get the point, their central bank balance sheet is tiny and ineffectual.

Otherwise, overnight, the JPY continues to weaken as the weaker JPY, stronger Nikkei correlation is back in play (for at least this week) and with the bourse punching through the 15,500 level and everyone getting all excited about Abenomics once again, naturally we see the USDJPY and more importantly the other JPY crosses like GBPJPY, EURJPY, CHFJPY etc all punching well above their weight class. On the topic of the USDJPY however, option strikes and barrier knock outs/ins are all anyone is talking about at the moment as you’d appreciate and for the interim the interest at 101.00 is pretty damn large (rolling off this afternoon). Profit takers line up into 101.30 and dip buyers are seen into 100.80 and further into 100.50, looking for that push and stop hunt above 101.30/40 with targets around 101.80/102.30.

The EURUSD is pretty much doing what it says on the tin, which is behaving like a penny stock and becoming a day traders wet dream. Pity that’s the case given the supposed importance of the underlying fundamentals yada yada. Basically the EURUSD will run higher until someone mentions a December taper or negative rates again and then it will be all change. Looking for 1.3550 for sellers to join the party, small stops above and real weight to go at 1.3580. On the downside, well, there’s not really a great deal to talk about, outside of profit takers when and if they get a chance on shorts.

In the Cable, outside of having pretty damn good data of it’s own, the move in stuff like the GBPJPY and GBPAUD has buoyed Betty and see us currently making moves towards recent range highs and triple tops at 1.6280. I know for a fact a lot of sizeable Asian names are wearing pain on this, but they’re hanging in for now. Small stops sit under 1.6180, but buyers are noted around the 1.6150 area.

The Little Battler is on a hiding to nowhere and 0.9080 is legitimate as a target on momentum and model funds selling it. Stops on the topside aren’t massively spoken of today, however 0.9230 may see some shorts taking stuff back, while sellers will get involved again into that 0.9250 level.

Data on the day (with German IFO out of the way) see little on the slate with the exception of CAD CPI and retail sales this afternoon.

A word of warning, conditions are starting to get thin now once again in the market as the year draws to a close and the Christmas party circuit kicks off in full swing, so be careful and nimble.

Helmets on.