Whispers of a cliff, screams of repetitiveness; FX as we know it
Walking in this morning, we are overall little changed from the Friday close as the week ahead promises to be rather dull for the most part, thanks largely to the US holiday season.
With the Yanks out on half days on both Wednesday and Friday and off for a full turkey roast on Thursday, punters will likely be huddled around the old wireless waiting for more careless whispers pertaining to the fiscal cliff.
We saw what a few sound bites on Friday afternoon could do to a nervous market that ultimately wants to retain an underlying positive bias, and thus we bounced nicely off the lows and more importantly avoided that close below 1342 in the SPX which I was harping on about last week. For now the upside is the path of least resistance for the index, but just as important as a close above 1342 was (is), so too now is a daily close above 1380 as confirmation that near term downside danger is behind us.
On the news front, little if anything to really note over the weekend and certainly even less so thus far today. The usual rumblings about whether Germany will pay Greece, whether Greece will call anyone else Nazis, will Spain ask for OMT help, will Italy stop living in a dream world thinking it’s so much better than its other southern neighbours etc etc.
With regard to levels and general price action today... For the most part sideways is the most succinct way of putting it as ranges defined last week look to hold (for at least the early part of this week).
EURUSD: Topside offers sit around the 1.2800 mark and are layered into 1.2825 or so, in with stops also. While downside has some (not overly convincing) bids into the 1.2720/00 area.
GBPUSD: 1.5930 will be the first hurdle with stops above but at current pace it looks like it wants to give it a nudge through. Sellers line up into the 1.5950/80 area, hoping for another leg lower. Equally there are now some light stops on the downside below the overnight low at 1.5880 area.
AUDUSD: You had to be quick and it was a day early, but having tested the 1.0280 area on the downside, the little battler took a healthy bounce out and now trades back into the 1.0400 handle with offers again in the usual place (1.0430).
USDCAD: In a thin market, below 0.9980 could get ugly (or at least as ugly as anything in USDCAD ever is) and we could trade 0.9950 pretty quickly. Down there I dare say fresh bids will appear for another assault into 1.0030.
Quiet one out there today folks, so helmets at the ready and good luck.