JP Morgan: Asia Pac Morning Commentary:

USDJPY

Good morning from JPY

Another rangy day without any improvement on the USD front. 1m USD bills sell off, VIX rally indicating a risk off scenario but USDJPY is lagging due to less momentum players pushing the market and also the consistent buying out of the Japanese real money community at these levels with the Nikkei supporting as well . Seems patience needed to wait for good entry levels, today will be waiting for any Japanese buyers to emerge and wait for a rally towards 97.20 to sell and 96.50 to buy. I must admit that I was looking to buy at these levels to get back long but it doesn’t seem to be the time yet.

EUR

Risk on risk off and the DC will be center of the focal for the headline pair. EUR marched from 1.3570 to 1.3607 in London but pared back the most of gains in NY as Obama phones Boehner to say no for the negotiation. Hence we are still in the range trading mode from the long side respecting 1.3550-1.3610 range defined for the time being. There is some values in EUR below 1.3550 but ample supply will be resting on 1.36 handle with all the eur crosses supplier on top as well.

GBP

GbpUsd came off to 1.6019 and EurGbp jumped up to 0.8469 on the back of BOE’s LTRO that was reported by Bloomberg. But it came back to a neutral level, since the action is usual operation. EurGbp resistance is 0.8480 and 0.8505/15 and support will be 0.8405. So the cross will stay in a range, but slightly down side risk. However, GbpUsd has resistance 1.6125/35 area, and we will stay this range until stronger UK numbers.

EurChf and UsdChf moved higher early London time. UsdJpy came back from 96.55 to 97.05/10 level. But top side is limited of Eurchf . I set range as 1.22/1.24 Eurchf and stand aside. While US government shut down, EurChf and UsdChf will stay heavy.

AUD

AUD…Risk trades poorly again overnight in the North American session as little to no progress made on a resolution. The break above recent highs in the local unit was unable to be sustained and little in the way of meaningful data today to inspire a break either side of recent ranges. Westpac consumer confidence locally to look forward to, expect recent improvements to continue. Look to buy into a move below 9400 and sell rallies back to 60/70, still very much a range trade till tomorrows all important jobs data.

Support…9380/90, Resistance…9480/00.

NZD

NZD…Moving in line with overall risk sentiment, trading poorly into the NYC with its antipodean cousin. Little to add from what’s mentioned above, unless headline driven hard to see new range today. Card spending will be watched coming off 0.8% mkt looking for 0.3%..recent run of data as we all know has been extremely strong, so see no reason for a shock here to the downside. OV house prices later but that story is well known and new measures will take time to rein that in (if at all).

Support…8260/70, Resistance…8350.

AUDNZD…attempted to move above 1.1400 however the weight of risk aversion halted progress. Expect a grind higher and still looking for a move to 1.1450 ahead of AUD jobs, but isn’t the time to mortgage the house on it. Remaining nimble the main game for traders at the moment. Support 1.1330/40 Resistance 1.1400/20

CAD

Funds finally chewed up thick offers around 1.0330/40 and popped to 1.0374 as Obama flipped the risk sentiment around despite the domestic strong data (housing start at 193k) but VIX spiking through 20. 1.0350 now becoming a good support and now the range has shifted from 1.0290-1.0330 to 1.0350-1.0390. We should now see some momentum buyers on dips towards 1.0350 and intraday I will collect those with stops just below 1.0330. Will see if vol pick up further to support the funds.

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