EUR – Closed in NY Wednesday at $1.3226 after easing off an extended recovery high if $1.3254. Rate established an early base around $1.3220 in early Asian trade before edging to $1.3246 on the back of euro-yen demand (cited for Wednesday’s spike higher in thin markets). The rally met US name supply which allowed it to ease to $1.3224. Another brief rally to $1.3238 quickly faltered before rate again found support back at $1.3224. Rate was trading around $1.3225/30 into Europe’s return from their Christmas holiday break. The recovery gained a boost from European buyers with rate lifting to retest Wednesday’s highs. The eventual break above, with triggered stops through $1.3260, took rate on to challenge technical resistance at $1.3274 (76.4% $1.3309-1.3159), touching a high at $1.3275 before drifting off. Corrective pullbacks have remained shallow through the European morning, buoyed by ongoing demand for euro-yen. US Fiscal Cliff comments into the afternoon session to take over directional impetus
GBP – Closed in NY Wednesday at $1.6141, having pulled back from session highs at $1.6171 and was seen recovering off $1.6109 into the close. Rate continued its recovery into early Asia, edging to $1.6140 before easing and finding a base at $1.6125. Cable settled between $1.6130/40 for most of the overnight session, dipping to $1.6127 ahead of the European open before edging to $1.6133 into London’s return. A softer yen the main driver of direction over the last few days, with the euro the main beneficiary. Cable continued to struggle to take full advantage of the situation and thus allowed euro-sterling to extend its recent recovery to stg0.8209 (Weds), touching stg0.8204 in early Asia, extending to stg0.8216 in early Europe. However, resistance between stg0.8210/20 countered this move and allowed cable to play catch up on euro-dollar, the rate edging to a high of $1.6191 ahead of the New York open, as the cross slipped back under stg0.8200. Thin, end of year conditions have left markets open to order driven trade, though focus will turn to US ‘Fiscal Cliff’ discussions going into the US session.
JPY – Dollar-yen continued its march higher Wednesday, pushing to a high in this session to Y85.73 as markets reacted to the new Japanese administration’s comments on yen strength. Rate closed in NY Wednesday at Y85.63, with early Asia taking advantage of the extended rise to book profits and ease it to Y85.48. Euro-yen saw highs Wednesday of Y113.39, closing NY at Y113.23. Rate tracked the early dollar-yen dip, easing to Y113.03 before strong CTA demand emerged to punch this rate higher. Stops triggered above Y113.40-50 provided the momentum to take rate to Y113.65, the move taking dollar-yen to Y85.87 with an Asian corporate a stand out buyer. Rate settled between Y85.75/80 into Europe. Another round of profit take sales into Europe squeezed it to Y85.59 before fresh demand emerged, as euro-yen found bid interest around Y113.50. Dollar-yen recovered to Y85.80, while euro-yen extended its recovery to Y113.84, meeting resistance from offers between Y113.85/114.00. Yen remained soft ahead of the NY open but could be open to another round of profit taking before it resumes its trend.
EasyForexNews Research Team