EUR – Closed in NY at $1.2931 after rate had bounced aggressively off initial Draghi react lows of $1.2745 to $1.2949, consolidating this recovery into the close. All focus overnight in Asia was on yen, with trade in euro-dollar contained within a tight range of $1.2920/38, opening Europe around $1.2925. Rate continued to drift lower into European dealing, touching a low at $1.2901 (23.6% $1.2745-1.2949) where it met solid support sitting ahead of $1.2900. Several attempts to break below failed and eventually prompted short term specs to cover back which drove rate up to $1.2832. Rate eased off highs into EZ retail sales data, the weaker than expected number squeezing it from $1.2926 to $1.2920, but dip quickly attracted buyers and edged it to $1.2934 before again easing off to $1.2925. Overall trade has been fairly subdued with rate continuing to consolidate Thursday’s recovery ahead of this afternoon’s release of key US NFP data. Bids remain into $1.2900 with the 200-dma close behind at $1.2894. Stops noted sub $1.2890, with key support area seen back at $1.2840/20. Resistance $1.2950 with stops above. Further offers $1.2970/80.
GBP – Closed in NY Thursday at $1.5234, after bouncing off Draghi inspired lows of $1.5051 to a high of $1.5245 as rate tracked euro-dollar’s sharp bounce, with strong demand for sterling-yen (general strong sales of yen) aiding the recovery. Euro-sterling through Asia was contained within a range of stg0.8485/96 leaving cable to take direction from euro-dollar moves, though with most attention remaining on yen both pairs were left on the sidelines, cable being held overnight between $1.5215/43 as it consolidated Thursday’s move. Cable tracked the early downside pressure on euro-dollar into Europe, extending its corrective pullback to $1.5199. However, the dip attracted fresh demand interest which took rate up to $1.5236, holding around $1.5230 in late morning trade. Trade has been fairly subdued, making for a typical pre NFP type market. Euro-sterling was able to extend the base of the overnight range to stg0.8478, holding back around stg0.8485 late morning. Cable offers seen at $1.5245/60 ahead of $1.5280. Support remains around $1.5200 ahead of $1.5170 with stops below.
JPY – Remained under pressure in early Asian trade with dollar-yen able to extend the post ECB Draghi rally from its NY close at Y96.36 (session high Y96.42) to bring pressure to bear on the reported barrier level at Y97.00. A strong Nikkei open took out the barrier, but this move met strong take profit sell interest that eased rate back to Y96.64. Option gamma demand cushioned the move and allowed for another assault on the Y97.00 level, this time taking the rate on to highs of Y97.19. A slump in longer-dated JGBs pressed the dollar, profit taking from exporters/banks/hedge funds added further weight and the dollar quickly slipped to Y96.14. Euro-yen fell from Y125.60 to Y124.38 on the move. The yen pairs opened heavy in Europe and the dollar slipped on sales from a directional name through Y96.30, fresh supply emerged taking the rate through Y96.00 to lows of Y95.85. Euro-yen fell in tandem and made a show under Y124.00 to Y123.87 on the move. Demand in the dip cushioned allowing a recovery, which later extended to Y96.20/Y124.30 ahead of the US employment report at 1230GMT.
EasyForexNews Research Team