Sovereign players have been very busy in the cable over the last week or so and more orders are being reported.

It’s unlikely that Asia will witness any big moves today but if cable does rally and stall at 1.5515, then you’ll know that the offers are decent in size.

EUR/CHF will begin the new month at fresh record lows and this may encourage some of the bigger macro funds to join in the rout, those that aren’t already involved that is. I think it was Paul Tudor-Jones who said that his best trades often came when he realised he was wrong and then doubled up in the other direction. Well I’ve been very wrong on EUR/CHF for the last 10 big figures but I certainly don’t have the stomach to reverse strategy and double-up.

Regarding USD/JPY, if the BoJ don’t turn up to defend recent lows at 83.50 then I think we can ignore their blusterings (in fact most of the market seems to be already doing so). As Jamie mentions below, if corporate Japan are still on the offer then this pair is probably set for lower levels.

GBP seems to be losing a bit of its recent glitter whilst the EUR and AUD are jogging on the spot.

Good luck today.

84.50 has held again in USD/JPY but dealers tell me that there were no unusually large bids at the level.

USD/CHF is the other pair to watch today with increasingly pivotal support now at 1.0200/20. A clean break below there will likely increase bearish momentum yet again.

EUR, GBP and AUD have all traded in 10 pip ranges for the last 2 hours.

The jigsaw puzzle is looking a little closer to completion after overnight trade. I am now tending towards the USD-bearish camp rather than the full on risk aversion view after the EUR/USD managed to break above its short term resistance and cable also managed to break higher. The fact that neither could maintain it’s gains is a reflection on the indecision in the market generally. USD/JPY and USD/CHF remain the two lead pairs.

There is a big level looming in USD/CHF so I’ll collate that information and report shortly.

Good luck today and TGIF.

Quick gap higher in the cable and the stops above 1.5525 were triggered in typical Asian trading session fashion. The sell orders on the way up through 1.5500 were not as large as had been anticipated and now the stops in both GBP/USD and GBP/JPY are leading the charge.

Cable has been quite well bid throughout the morning session and dealers tell me that the offers on the interbank machines aren’t particularly large. Let’s see if they get bigger as we approach 1.5500.

• EUR/USD has seen very large Sovereign plays either side of a 1.2590/1.2730 range
• Big hedge funds have been buying USD/JPY; this could be partial profit-taking on existing shorts or it could be fresh longs
• Two other big funds have been selling GBP/USD and GBP/CHF
• More money continues to flow into the CHF from all directions

What I glean from all of this is the following (presuming you are a follower of flows); if you are putting on a risk-aversion trade then you should sell GBP/CHF wheras if you’re looking to put some risk back on then you should buy EUR/JPY.

 All of this will of course change when the next big flow hits the market.

There were reports yesterday of some solid sell orders starting at 1.5480 and the fact that the overnight high was 1.5478 would seem to confirm this. The offers are layered from 1.5480 through 1.5510 and stop-loss buy orders are reported starting above 1.5520.

• EUR/USD: Sovereign names both sides; bids at 1.2580/90, offers 1.2720/30
• Cable: Two large hedge funds have been main sellers over last 48 hours. Offers still noted around 1.5480. Downside seems fairly light until stops noted below 1.5290.
• USD/JPY: Trailing stops noted above 85.00; Corporate offers starting at 85.25/40. Not hearing much in the way of bids at this stage.
• USD/CAD: Sovereign sellers noted overnight at 1.0650; further offers starting at 1.0700 (same names who bought at 1.0200 and below)
• EUR/CHF: Option protection ahead of 1.3000

• EUR/USD: Sovereign bids reported 1.2600/15
• Cable: Sovereign bids being currently filled around 1.5425
• AUD/USD: Solid bids around .8825; stop-loss sellers below .8810
• USD/JPY: Semi-official bids expecetd around 84.75; stops expected below

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