AUTOMOTIVE: Toyota (TOYOTA A1/A+/A+): Toyota Industries Targeted

• EURGBP is holding on to the bulk of this morning’s rally, currently up 0.35% on the session as we approach the Spring statement. As noted, the prospect of deeper fiscal spending cuts and slightly softer-than-expected (on net) CPI data have weighed on sterling.
• A retracement mode has remained in play in recent weeks, and price action late yesterday saw the cross dip back below the 50-day EMA, threatening to end the recent underlying bullish theme. However, today’s price action sees spot rise back above both the 20- and 50-day averages – which will keep the daily close significant for the cross. MA studies are in a bull-mode set-up suggesting the pullback from the Mar 11 low is likely a correction.
• This morning’s low of 0.8333 and 0.8321, a Fibonacci retracement, provide key short-term support. Overall, levels between 0.8300-0.8200 continue to represent the base of a longer-term range. Initial resistance is at 0.8395, before the key bull trigger at 0.8450, the Mar 11 high.
• Yesterday we noted how several analysts had touted the risks to EURGBP remain tilted to further strength. Notably, ING see upside risks extending beyond the recent 0.845 highs this week, while SocGen state there’s a good case for being long EURGBP here and remain bearish GBP vs. the Scandies. Furthermore, BBVA believe sterling will weaken for the rest of the year, particularly against EUR.

OI data points to a mix of net long setting (TU, TY & WN) and short cover (FV, UXY & US) during yesterday’s rally, with the former outweighing the latter.

• The net long setting in TU & TY futures provided the only positioning swings of any real note.