The USD still wearing the post NFP hangover pain

A Japanese holiday overnight as well as generally muted data releases in Asia have all combined to make it a quiet start to the trading week. As the market “recovers” from the standout (poor) NFP data released on Friday the theme for now remains one of overall USD bearishness. In truth this isn’t being expressed with any real magnitude but the tone is certainly present. First thing this morning the Cable seems to be the only recipient of pain as it came off rather quickly from opening levels and highs on reported GBP cross selling as well directly against the USD leg. Having settled down for now, we’ve seen little else by way of standout price action in any of the other major crosses.

The USDJPY continues its downward move for the time being as lofty heights seen last week are being consolidated and more notable banks are coming out with short USDJPY trade strategies. The downside line in the sand in the immediate near term remains 102.50/80 and I would expect forays down there to hold as the market awaits more US data to see which way the wind will blow.

The day ahead has little by way of any notable data releases so direction will likely be guided by natural flow in the market rather than any else too substantive.
Looking at some of the major crosses for the day, here’s what I’m seeing;

EURUSD: Sideways trade for the most part, however through the 1.3625 area could get a little messy as stops are said to be seen in and around. Once through there though (should it happen) buyers are likely to resurface once again into 1.3580 and certainly 1.3550. On the topside I know for a fact that Asian names are looking for 1.3700/10/30 before they start selling any more of the pair.

GBPUSD: Not unlike the EURUSD, in terms of sideways trade, with initially at least a downward bias. Buyers are lined up at previous support levels of 1.6400 and 1.6380 and all the way between. I join the happy throng with my initial bid just above the figure. Topside will have an initial tough time above 1.6480 on the day with 1.6450 capping recent bounces.

AUDUSD: After a rather impressive bounce after the NFP the topside seems like the path of least resistance for the time being and I’ve been hearing short dated at the money upside has been bought thus far in the options market this morning. First line in the sand is at 0.9080 with offers line up into that area, but in reality I think we have the chance of squeezing a little higher on the day with 0.9130 proving tough going if we can manage it.

On what should prove to be a rather quiet day, don’t forget those helmets.

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