15 February 2011 at 8:55 GMT
It was a relatively tight Asian session last night, following on from what was an incredibly dull European session. Chinese data came in bang in line with expectation after numbers were leaked and happened to be exactly the same as what was officially released last night. One can’t help but think that the Chinese had a hand in this themselves….
I’ll get to levels in a minute but want to draw your attention to 2 things. First off the very heavy data slate today both from Europe and the U.S., highlights of which are: U.K. CPI, U.S. retail sales, the Riksbank decision, and German and French preliminary GDP prints.
Meanwhile, the other matter is (and I still bang on about this) the DXY coming into crucial levels. Keep an eye on the 78.90 and 79.10 levels as topping out for this recent bout of USD strength and heading lower on its way for consolidation of the right shoulder.
In line with this I could be interested in the EURUSD on dips into 1.3420/30, with stops below 1.3345.
On the Cable, ahead of the CPI print I look for interest at 1.5980 and 1.5930, with tight stops below 1.5907, targeting a move back into 1.6150.
The AUDUSD could be expressed via options and investors might show interest in the March 2 1.0100 Calls at 47 pips (spot ref 1.0015) and disinterest in the 0.9800 Puts (same date) at 26 pips.
USDCHF also could fall into line with this broader move and therefore I look for spikes into 0.9790 or close to fade this rally with stops above 0.9837, targeting a return to 0.9550 overall with 0.9680 as the intermediate target.
I have yesterday closed my AUDJPY and USCAD positions with small profits (nothing to write home about) as I simply sat on them too long for little reward and wanted to free up my attention to other crosses.