EUR – Risk appetite stalled in early Asia and despite the strong rally in Wall Street the pair was pulled lower by sharp cross supply, predominantly in euro-yen. Euro-dollar extended slippage and triggered a series of stop-loss sell orders down to $1.3130, printing session lows of $1.3124. Demand in the dip cushioned moves and the pair later recovered to $1.3140. Early demand from Reserve names lifted euro-dollar to $1.3152 in Europe, before profit take sales pared gains. Support in the dip cushioned, Asian sovereign demand gave a further boost and the rate extended to $1.3170. Fresh supply checked moves, market sentiment turned and the pair squeezed lower flushing stops through $1.3120/10 to print lows of $1.3107. Late trade nudged to $1.3114 but the underlying tone remains soft with bounces seen shallow. Data release light in the US today with highlights from ADP Employment change at 1315GMT, followed by the weekly Initial Jobless Claims at 1330GMT.
GBP – Asian trade opened flat and the upward momentum seen in yesterday’s session stalled despite the strong close in Wall Street. Cable was tied to a narrow 20 pip range, before a number of euro-dollar stop losses triggered by euro-yen supply added weight. The pair slipped to lows of $1.6202, found support in the dip and later bounced to settle around $1.6225. Euro-sterling opened heavy and as risk appetite faltered slipped through stg0.8100, flushing stops on the move to lows of stg0.8094. Cable extended gains in early Europe to $1.6241, but soon slipped to $1.6230 as traders positioned ahead of UK PMI Construction data. A weaker than expected release pressed to $1.6220, sharp euro-dollar supply added further weight and the pair printed lows of $1.6192. Euro-sterling initially lifted to stg0.8110, before sentiment turned and the cross flushed stops on the move to stg0.8085. Support seen at stg0.8062 (12 Dec low), a break opens strong demand into stg0.8050.
JPY – Trade volumes continued light and with Tokyo out on holiday risk appetite faltered despite the strong close in Wall Street. Euro-yen opened heavy and flushed some weak stops through Y114.95, extending losses to Y114.70 on Hedge fund sales. The cross made an attempted recovery but met strong head winds, fresh supply added weight to print Y114.47, before late trade settled around Y114.65. The early cross supply pressed dollar-yen to Y87.09, dip demand recovered and the rate extended the slow grind to Y87.30. Dollar-yen opened flat in Europe as traders reported of continued light flow. Market moves were dictated by the cross and the dollar slipped to Y87.15, profit take sales added further weight to Y87.00. Euro-yen trade was tied to a narrow Y114.40-80 range before late slippage in euro-dollar pressed. The cross squeezed to Y114.30, extended losses and flushed stops on the move to print lows of Y113.95 and sits heavy. Support seen on the downside at Y113.80, stronger behind at Y113.50 with more stops set.
EasyForexNews Research Team