A bunch of trading ideas and talk about a euro exit from the Journal.

• Canada April CPI 2.0% y/y vs 1.9% exp
• Spanish regions posting larger deficits
• Spanish bank losses larger than feared
• LCH hikes Spanish bond requirements
• Hollande: Spanish banks could tap ESM
• More reports of Greek exit provisions
• Mistranslation possibly behind Merkel Greek referendum suggestion
• JPMorgan sees 50% chance of Greek exit
• French bank may lose 9B euros if Greece bolts
• EU’s Rehn: Spanish banks don’t need EU aid
• HSBC might pull UK retail banking
• BOE’s Posen leaving bank
• EUR shorts hit record in CFTC report
• G8 underway, Obama and Hollande push for growth
• Copper turns negative on year, oil falls $1.40 to $91
• Facebook IPO disappoints, S&P 500  down 0.7% to 1295
• EUR leads, NZD lags

EUR/USD opened North America at 1.27 with a large option for the 10 a.m. cut nearby. Afterwards, the pair drifted higher to orders in the 1.2740 range. Later in the day, the euro surged higher on a likely combination of short cover and Brazilian intervention. EUR/USD nearly touched 1.28 before fading back to 1.2780 at the close.

EUR/GBP short covering kept cable in check in the 1.5780 to 1.5840 range. Broad USD selling toward the end of the day pushed cable toward the top end of that range.

USD/JPY pushed through the lower end of the day’s range below 79.18 but could get through 79.00.

AUD was carrying some upside momentum into US trading but the stock market soured on the Facebook IPO and risk trades retreated back toward session lows.

Have a great weekend.

After that doggy IPO. Shares closed at 38.23 after testing the syndicate bid repeatedly at $38.00 in the final few minutes of trade.

Have a good weekend all!

Euro zone must take decisive action and Greece must make up minds…

It may have, in a weird way.

For much of the week emerging market central banks have been selling dollars to cool off rallies against their local currencies. Sure looks like like Brazil’s central bank did the same, judging by the chart.

Not sure why that would send EUR/USD soaring but the just trying to add two and two together.

Brazil often diversifies reserves as the Asian central banks do, so that would make them a EUR seller, but maybe someone got their wires crossed…

The EURUSD is closing the week on the positive side of the fence. On the chart above the price moved higher on (I guess) comments from EU leaders (Monti/Hollande).  The power of some well chosen words can do wonders on a Friday afternoon.

Anyway, the move higher improved the technical picture at the weeks close (after a pretty bearish week overall).  In addition to staying above the 100 bar MA on the 5 minute chart, the surge higher moved (and closed) the price above the 100 hour MA  for the 1st time since May 2nd (at 1.2742).    That level will be eyed on Sunday evening (ET time) when the markets open again.  On the topside, resistance on Sunday will come against the 200 hour MA at the 1.2842. 

Weekly futures positioning data from the CFTC Commitments of Traders report:

• EUR shorts at 174K vs 143K prior
• JPY shorts 34K vs 41K prior
• CHF shorts 27K vs 16K prior
• AUD longs 5K vs 25K prior
• CAD longs 51K vs 60K prior
• GBP longs flat at 25K vs 25K prior
• NZD longs 2.5K vs 6K prior

The data is as of the close on Tuesday.

Naturally this leaves the euro more vulnerable to a short squeeze but the market has been extremely short euros all year and hasn’t rushed to the exits.

Australian dollar longs have now been flushed out so further declines may be more gradual.

Smart money seems to like EUR/GBP shorts so the bounce late in the week might be a good spot to get short.

Terrible week for oil as it bounces around in the final hour of trading. After falling as low as $91.08, it has rebounded to $91.59 but is still down $1.00 the day and 4.6% on the week.

It’s the third consecutive week of declines and wipes out all the gains since November. Technically, $75 is looking possible but the next level of support is $88/89, which is the 61.8% retracement of the Oct-March rally.

Weren’t we told earlier today by Olli Rehn that Spain did not need European help? Let’s get our stories straight chaps…

Flew through resistance in the 1.2750/60 area and surged as high as 1.2787. A close above that area might suggest a more significant corrective bounce ahead.

The bounce from ahead of 1.2626 support at 1.2640 this morning suggests that area is now an even more formidable zone.

Looks like a sudden case of cold feet ahead of the G8 summit this week. If that is the case, we may see weakness early on Monday as the market puts bearish EUR/USD bets back in place.

Everything? Not sure Frau Merkel agrees.

Hollande says there will be a European members meeting at the G8…

Just imagine how strong it will be when Spain unravels!

Nothing on the wires that I can see to prompt this pop…Just a headline from Italy that the property tax will raise EUR 21 bln.

The IMM is closing for the week shortly; perhaps someone down there decided to square up…

Offers still clustered from 1.2740 to 1.2760.

Copper has extended its 1% decline today and is now in negative territory for the year. On the week, it’s down 5.8%. Other industrial metals like nickel and aluminum are up today but Bloomberg’s base metals index is up just 1% on the year.

I have frequently noted the recent correlation with CAD and copper and this points to a tough road ahead for the loonie.

The G8 Summit at Camp David in the US is underway and will continue tomorrow.

Obama met with Holland today and afterwards the US President said he’s looking forward to discussions  about a “responsible approach to fiscal consolidation that is coupled with a strong growth agenda.”

The emerging battlelines show the France, Italy and the US pushing Germany to be more flexible on austerity. Germany fought back yesterday with a Merkel spokesperson saying EU leaders agree austerity and growth are compatible.

There may be some talk of funds for the European Investment Bank as a growth mechanism but it’s unlikely that anything will be announced.

It’s unlikely that anything will be said that moves markets but if Germany seems to back away from the strict austerity plans in place, it would be positive for risk trades, commodities and even the euro.

A change in tone from Germany is unlike at the moment because it would upset the Greek elections. It’s in Europe’s best interest to scare the Greek public into voting for New Democracy and Pasok, rather than Syriza.

What a soap opera….

As the wiggles turn into waggles intraday, the price has broken below an intraday trend line support and looks toward the 100 bar MA at 1.2714. The price has not been below the 100 bar MA since 4 AM  ET. The next support comes in at the 1.2700 (38.2% of the days range) and the 200 bar MA (green line) at the 1.2695 currently.

On the hourly chart the price has been able to stay below the key 100 hour MA so far today (blue line in the chart below). The price has gotten with 5-6 pips of the key MA which is the closest it has been since May 2nd.  The market has a decision to make early next week – either move above this moving average and continue the correction higher, or continue the trend to the downside.

With Greece on the brink and the contagion unknown the expectation would be for the 2012 low of 1.2623 to be in jeopardy at some point next week.  This is key support that provided support bid today.  I will be watching that 100 hour MA for clues for bullish or bearish clues in the short term.   Stay below and the reality of a break is sooner, rather than later. Move above, and the break is delayed until further notice.

The steady drip of bad Spanish news continues…

The week is coming to a close and the GBPUSD has settled between the 100 and 200 bar on the 5 minute chart.   The price took a look below the 50% and 200 bar MA for a minute or so (at 1.5783), but selling dried up on the first look. Now the price, off the retest of the 100 bar MA at 1.58067), may look to take another look below that intraday support level as clock ticks toward zero. 

For the week, the high was reached on Monday morning in NY and after a sideways action into the London morning trade on Tuesday, trended to the downside for the rest of the week. Overall, 275 pips have been lost at the current market. The high to low range  was about 390 pips. Not  bad. 

The decline took the price below trend line support, the 38.2% of the 2012 range, the 100 and 200 day MA at the 1.5825 area and today through the 50% of the years trading range (the price could not stay below this level at the 1.57659).  A move below this level will be the next downside target followed by the 1.56398 level where lows from February and the 61.8% of the move up this year is located. 

On the hourly chart, the price started the trend on Monday/Tuesday with sellers against the 100 hour MA. The decline was steady.  Today, the price moved above the trend line resistance  and remains above that trend line but the resistance against the 100 and 200 day MA is taking precedence.

• Greek people don’t need euro referendum

Syriza leader Tsipras says Merkel will get her answer on June 17 (the day of the next election).