EUR – Closed in NY Friday at $1.3343, after rate had been pressured to a session high of $1.3366 on reaction to the wider than forecast US trade deficit. Rate eased to $1.3335 ahead of the Asian open but move quickly picked up fresh demand that took it back to $1.3366. A brief pullback to $1.3353 again met willing buyers, the demand this time taking the rate to $1.3404. The move up was given added momentum as euro-yen moved through barrier interest at Y120.00, with barriers at $1.3400 also taken out. Upside momentum quickly faded above the figure, with long covering ahead of the European open allowing rate to drift back to $1.3385/80. Rate continued to drift lower into early Europe but buyers were waiting to pick up euros on a dip into $1.3350. Rate touched $1.3348 before bouncing, macro demand from around $1.3360/65 taking it to $1.3380. Release of weaker than forecast Eurozone IP data had little negative effect, with buyers soaking up any react sales before taking it to extended recovery highs of $1.3390. Rate then drifted below $1.3380. The underlying tone remains buoyant ahead of the US open.
GBP – Closed in NY Friday at $1.6132 after rate had struggled to take advantage of the risk-on reaction to the release of weaker than forecast US trade data. The rate had seen an initial spike to $1.6170 on data release, only to fall back to $1.6089 as euro-sterling extended its recent recovery to stg0.8287. Cable recovered to settle between $1.6130/40 into the close, while the cross drifted back to stg0.8272. Cable dipped to $1.6118 into early Asia, as demand emerged again for the cross that took this rate on to stg0.8298. However, failure to break above stg0.8300 allowed cable to recover and push up to $1.6156, settling between $1.6135/45 ahead of the European open. Euro-sterling was holding around stg0.8292 into Europe. Weak output data Friday in the UK continued to place an anchor on any cable gains, with sterling retaining its underlying soft tone into Asia. Cable tracked euro-dollar’s early Europe corrective pullback, touching $1.6115 before demand emerged. The recovery in cable was slowed as euro-sterling bounced off its pull back lows of stg0.8280, cable faltering around $1.6138 before getting shoved back to $1.6111 as the cross took out barrier interest at stg0.8300 (high stg0.8303).
JPY – Japan holiday led to a slow start in Asia, early demand emerged to take out the Y89.50 barrier, this triggered stops and added momentum to print highs of Y89.67. The dollar move, along with the buoyant tone in euro-dollar, allowed euro-yen to extend its recent recovery, taking out barrier interest at Y120.00, before the rally faded above Y120.10. Japan PM Abe comments that he desires ‘a person who can carry out bold monetary steps’ as the next governor of the BOJ was seen adding further negative weight against the yen. Profit take sales later eased to Y119.90. Dollar-yen opened flat in Europe before the pair headed lower on cross supply, fast money added further weight and pressed to Y89.32. Support in the dip cushioned moves and lifted to Y89.45, before fresh sales pressured to Y89.30. Euro-yen extended the corrective pullback off overnight highs to Y119.27 in early Europe, before lifting with euro-dollar on macro demand to Y119.68. The rally stalled and late trade eased to Y119.50 ahead of NY.
EasyForexNews Research Team