EUR: Opened early Europe at $1.2830, Euro-dollar closed in NY Friday at $1.2835, just off session lows of $1.2822 seen following the release of stronger than forecast US employment data. Early NZ/Sydney took advantage of thin conditions to probe for stops below the NY base, triggered sales took rate to lows of $1.2808 before profit take demand edged rate back above $1.2820 into the main Asian session. Rate edged on to $1.2840 on Goto-Bi day demand for euro-yen into the Tokyo fix, but this recovery proved short lived as market reacted to a WSJ story suggesting the ECB was reconsidering E80bln of held Spanish bills used as loan collateral. Euro-dollar sank to $1.2816 before bouncing above $1.2830 ahead of the European open. Euro-dollar extended recovery into early Europe to $1.2843 before fresh selling emerged. Rate dropped to $1.2778 as a reported barrier at $1.2775 was targeted. Strong demand ahead cushioned then allowed rate to recover to $1.2807 only for late morning sell interest to reemerge and place that barrier interest back in the spotlight ahead of the NY open.
GBP: Opened early Europe at $1.6030 and stg0.8004, GBP closed in NY at $1.6021, just off session lows of $1.6008 after the dollar made decent gains following the release of better than forecast US employment data. Rate retested the NY low into early Asian trade, as it tracked the early dip in euro-dollar, with recovery meeting initial resistance at $1.6030. A brief dip below $1.6020 attracted fresh demand that took rate to extended highs of $1.6036 ahead of the European open. Euro-sterling was held within a tight stg0.8000/11 range through Asia. Cable edged up to $1.6039 in early Europe only to be pulled lower by euro-dollar slippage, though euro-sterling breaking under stg0.8000 diverted part of the pressure. However, cable was squeezed to $1.5989, despite the cross easing to stg0.79855. Recovery in the cross back above stg0.8000 restricted cable recovery to $1.6005 before it eased lower again into UK services PMI data release. Weaker than expected data prompted sterling sales taking cable down to challenge support between $1.5980/70. Swiss sales extended move to $1.5962 edging back to $1.5980.
JPY: Opened in early Europe at Y80.37 and Y103.64, Dollar-yen opened in Asia at Y80.43 with trade tied to a narrow 10 pip range. Risk appetite increased and support from macro accounts, aided by fixing demand linked to Gotobi day lifted to Y80.57, before running into strong exporter supply ahead of Y80.60. The rate eased off highs and extended slippage to Y80.35 ahead of Europe. Euro-yen traded flat throughout the Asian session stuck in a tight Y103.07-34 range, looking for direction. Dollar-yen opened soft in Europe and ground lower on early cross supply to Y80.26, dip demand bounced but with recovery attempts seen shallow the rate pressed to Y80.20. Support seen from the 5 dma at Y80.07 ahead of bids into Y80.00. Euro-yen made a show under Y103.00 in early trade, stops flushed through $1.2800 in euro-dollar added weight and the cross printed Y102.60. Asian sovereign demand led recovery attempts to Y102.80, before the pair slipped to re-test the intraday low. The rate last trades Y102.63 and sits heavy with support seen into Y102.50.
GOLD: Spot gold prices have recovered to around unchanged levels after briefly trading through Friday’s low of $1673.94/oz. Gold prices extended lower, during the early stages of the European cash equity opening, to make a session low of $1672.75/oz, as safe haven bids for the US dollar continued to hamper metals prices ahead of Tuesday’s US General Election. Metals brokers report limited activity this morning, with some short covering accounts seen working bids around $1661/62. Offers are noted above at $1685 and also $1693/94, with heavy resistance anticipated at $1700. Spot gold now trades at $1679.10/oz, up $1 on the session.
LOOKING AHEAD:
– The Americas calendar starts at 1330GMT, with the release of Canada’s September Building permits.
– The US data releases start at 1430GMT. As for all weekly data for the latest period, numbers in the US are likely to be skewed by
the aftermath of Hurricane Sandy.
– At 1500GMT, the October ISM non-manufacturing index and the October Employment Trends Index are released. The ISM non-manufacturing index is expected to fall to a reading of 54.5 in October after rising to 55.1 in September.
– Overnight, San Francisco Federal Reserve Bank Pres. John Williams speaks at 0100GMT.
EasyForexNews Research Team