EUR – Closed in NY Tuesday at $1.3050 after recovering from a pullback low of $1.3010, the rate having seen highs of $1.3075 earlier in the day. The recovery into the close was seen on the strong close on Wall Street, the DJIA posting an all time high during the session. Rate dipped to $1.3042 in Asia before picking up fresh demand, the rate extending the recovery to $1.3069 before momentum faded ahead of Tuesday’s $1.3075 high. Rate eased to $1.3050 into early Europe before bouncing back through the overnight high and on to $1.3080. The rally met decent supply which pressed rate back to $1.3044 before it managed to correct back up to $1.3065, the recovery aided by strong cross demand, with euro-yen pushing above Y122.00 to Y122.08. Upside momentum quickly faded before rate drifted lower, moving through overnight lows at $1.3042 to $1.3033 in late morning trade. Move was seen influenced in part by cable’s deeper pullback, as euro-sterling met resistance into stg0.8650. Eurozone GDP release came in unchanged and had minimal impact. US ADP at 1315GMT next point of interest. Position adjustments seen ahead of Thursday’s ECB rate decision, with focus more on ECB Draghi’s press conference which follows
GBP – Closed in NY Tuesday at $1.5133, the rate having recovered off a NY session low of $1.5094 into the close. Cable had earlier in the day seen highs of $1.5200, reacting to the release of stronger than forecast UK services PMI which was seen offsetting recent weak manufacturing and construction PMI data and putting forecasts for QE extension away from Thursday’s BOE meeting. Cable recovery continued through Asia, pushed up to $1.5156 before momentum faded, though corrective pullbacks remained shallow. Euro-sterling closed in NY at stg0.8624, the rate having seen lows of stg0.8589 post PMI data, recovered to stg0.8632 before drifting off into the close. Trade in Asia was confined to a relatively tight stg0.8621/33 range. Cable edged up to $1.5147 in early Europe before turning lower, the move down initially influenced by euro-sterling edging higher, before momentum was boosted on the break below $1.5100. The break under $1.5090 took rate to extended lows of $1.5069 before demand emerged to cushion, aided by the cross meeting decent resistance into stg0.8650. Next support in cable seen into $1.5050, with $1.5037 (76.4% $1.4985-1.5200) seen key to expose recent lows at $1.4985.
JPY – Rate touched a session high of Y93.38 in opening Asian trade before getting pressed to lows of Y93.00, eventually settling around Y93.20 through the Asian afternoon. Traders noted that dollar-yen squeezed lower despite the Nikkei, like other Asian equity markets, trading positive, with main downside pressure seen from unwinding option structures, as well as some month/FY end repatriation flows. Euro-yen closed Tuesday at Y121.80, just off late recovery highs of Y121.87, with the corrective pullback extending to Y121.49 in early Tokyo before it edged back to settle between Y121.70/80 into Europe. Euro-yen pushed higher in early Europe, extending to Y121.98 before it was repulsed ahead of Y122.00. Dip to Y121.67 picked up stronger demand that took it to Y122.08 before momentum faded. Rate then drifted lower, with the euro seen under late morning pressure generally as traders were seen adjusting positions ahead of Thursday’s ECB rate decision/ECB Draghi press conference, with reports suggesting dovish undertones possible. Dollar-yen managed to extend its recovery to Y93.50 in Europe before it got dragged lower by euro-yen slippage, though met support around Y93.35/40.
EasyForexNews Research Team