EUR – Closed in NY Friday at $1.3320 after rate had seen a pressured corrective pullback to $1.3280, recovering to $1.3332 before drifting off into the close. This corrective drift continued into early Asia before meeting decent demand placed into $1.3300, the rate finding an early base at $1.3302 before edging back to $1.3331 where it again met resistance above the $1.3330 level. Rate settled back between $1.3316/28 into early Asian afternoon trade before coming under late sell pressure which eased it back to $1.3308. Rate recovered to $1.3318 into Europe with further demand able to take rate on to $1.3332 before reported sell interest above $1.3330 again capped, this time at the late NY recovery high of $1.3332. Rate reversed lower as the euro came under general sell pressure, the rate moving down to retest earlier lows but bids into $1.3300 cushioned this move at $1.3303. Cross plays, linked to position adjustments ahead of Tuesday’s BOJ monetary policy announcement, provided the main drive, though rate remained restricted between $1.3300/1.3335
GBP – Closed in NY Friday at $1.5864, just off traded lows of $1.5853. The close Friday below $1.5910 (200-dma, today at $1.5909) was seen opening potential for a challenge on Nov lows at $1.5829. With this in mind cable came under pressure in pre Tokyo trade, extending its corrective move to $1.5838 before buyers emerged to cushion the dip and take rate back, settling between
$1.5862/74 through the Asian afternoon, trading around $1.5871 into Europe. Euro-sterling took out barrier interest at stg0.8400 in early Asia, as it traded up to stg0.8406. However, protection of next barrier at stg0.8410 countered any further upside progress. The resulting corrective pullback continued into Europe, taking rate through Asian lows at stg0.8390 to stg0.8379, which in turn provided cable with some buoyancy as it extended its recovery to $1.5893 in Europe. However, sterling’s recent negative undertone remains in place with focus turning to Friday’s release of Q4 GDP data. Apart from the recent release of poor UK data, the market is seen looking for clarification on the UK government’s relationship with the EU going forward (Friday’s Cameron speech on this subject was postponed due to the terrorist situation in Algeria).
JPY – Dollar-yen picked up fresh demand in early Asia to print Y90.25. However, the early rise met reported US investment house supply, suggested to be linked to interest rate product structures. The sales eased rate below Y90.00, Japanese lifers added weight through Y89.85, flushing stops on the move to Y89.43. Euro-yen lifted to Y120.24 in early dealings, before profit take sales pared light gains. Cross supply extended losses to Y119.08, where the rate found support ahead of Y119.00 and bounced to Y119.30. Dollar-yen opened flat in Europe, before heading lower in tandem with euro-dollar to Y89.33. Tech support from the 5-day ma cushioned and the rate later recovered to Y89.47. Euro-yen made a show under Y119.00 on the earlier mentioned euro-dollar sales to Y118.87, dip demand bounced and extended recovery pullback efforts to Y119.35. Late trade squeezed lower to Y119.00 and with NY out for Martin Luther King Jr day volumes expected light for the session.
EasyForexNews Research Team