10 January 2012 at 9:42 GMT
We continue to trade sideways for the most part despite the market's best efforts to find a definitive direction and headlines to hang its hat on. Equities across the Asian space closed in a small flat to minor positive, having take their lead from the US overnight.
There were no outstanding data prints last night that would give any real impetus to direction in today’s session. Jostling for a clear run continues and yet volumes remain incredibly low (US equities for instance are 30 percent down on December volumes). Even the beginning of the US reporting season has done little to drive this market with Alcoa last night reporting after market close a loss of 3c EPS as expected by the street.
Looking further ahead today the calendar remains relatively light with only US wholesale inventories and CAD Housing starts prints being those of any real note later in the session.
On the crosses, the EURUSD continues to drift waiting for the likes of Merkozy to actually put something tangible to the market so that it can make its move (in either direction). Levels for this cross equally remain unchanged and until such time as there is a definitive breach and close above the 1.2830/50 levels or alternatively on the downside below 1.2530/00 we will continue to meander in this desert of apathy.
In the AUDUSD, a better building approvals print overnight gave the little battler a small nudge higher, taking it out of its intermediate support zone of 1.0180/0230 into overnight highs of 1.0330. Therein you have a range of play for the day. Fading rallies is not suggested as for the time being in drips and drops this thing looks like it wants to make another run at that triple top of around 1.0450/80. Having said that dips are looking more and more shallow and generally behaviour in this (high) beta cross is broadly mimicking the general current confused price action in the wider market. Clearly the EURAUD is the main beneficiary of the above factors.
The USDCAD is more and more a USD leg story for the time being and while we know that Gold is hanging in there and oil prices are being held hostage by Iran, we too are in a narrowly confined range of 1.0130/50 by 1.0350.
The Cable is as yesterday stated a function of the EURGBP cross at present rather than being a standalone performer in its own right. Levels for this cross remain broadly unchanged.
Yesterday's resignation by Swiss National Bank chief Hildebrand has unwittingly put some further downside pressure on the EURCHF peg (not sure why) perhaps as some pundits out there choose to now test the SNB’s resolve to defend its 1.2000 line in the sand. While he may have quit, surely he was not the sole proponent of this floor and thus the SNB (for the sake of what’s left of its credibility) will of course defend this level.
Folks, I’m just sitting here waiting for things to settle down or at least turn into something discernible so that perhaps we can really get this year off to a real trading start rather than trying to second guess irrational moves. Until that happens, helmets on and good luck.