EUR – Closed in NY Tuesday at $1.3082 after rate had bounced off pullback lows of $1.3029 to push above $1.3100, marking highs of $1.3103 before drifting off into the close. Rate consolidated this move in early Asia within a range of $1.3075/85 with an afternoon lift taking it up to $1.3085/91 ahead of the European open. Moves were again influenced by yen action, with some positioning (which may already be activated) ahead of tonight’s FOMC Minutes (though traders note that this release could prove a little stale after the recent release of NFP, Fed speakers since the meeting and action by the BOJ last week). Rate came under pressure into early Europe, trading down to $1.3173 before it met strong demand into the dip. Rate recovered to $1.3082 before momentum picked up and allowed for a move back above $1.31 to retest Tuesday NY highs at $1.3103. Rate continued to claw its way higher, overcoming tech resistance at $1.3114 (38.2% $1.3711-1.2745) but rally fading made the eventual move to $1.3122 sticky before it drifted back off toward $1.3100 late morning. Japanese hunt for yield continues to be cited for euro-dollar’s buoyant tone, via euro-yen buys. Offers seen from above $1.3120 through to $1.3150 ($1.3148 100-dma, $1.3154 55-dma).
GBP – Closed in NY at $1.5322 after rate had been pulled higher by euro-dollar’s stronger rally, cable bounced off $1.5281 to a high of $1.5342, before it drifted off into the close. This recovery in cable trailed euro-dollar, the rate failing to break above Friday’s post NFP high of $1.5364, which in turn allowed euro-sterling to push to session highs of stg0.8552, having seen lows earlier in the day of stg0.8508. Cable drifted off into the close, with the corrective pullback extending to $1.5313 in early Asia before fresh demand emerged. Sterling-yen demand was again linked to the rate’s recovery, cable pushing to highs of $1.5340 before rally faltered and rate eased to the $1.5320 area ahead of Europe. Cable picked up fresh demand into Europe, the rate edging back up to retest overnight highs, extending topside to $1.5342 but Asian offers between $1.5340/50 countered. Failure to make an impression on this resistance eventually led to spec longs to cover back and press rate back to the $1.5320 area late morning. Euro-sterling extended its recovery to stg0.85595, faltering ahead of recent highs at stg0.8560 before it drifted back to stg0.8545 late morning. Cable bids $1.5310/00, stronger into $1.5280.
JPY – Dollar-yen opened on a bid tone in early Asia and lifted to Y99.26 on leveraged names, rate was unable to consolidate gains and pressed lower on Asian bank sales to Y98.93. Support in the dip cushioned and aided by Gotobi demand for the Tokyo fix dollar recovered to Y99.20, before settling in a tight range. Euro-yen tracked the move and slipped to an early low of Y129.40, before bouncing to Y129.60. Yen weakness continued in early Europe and after initially slipping to Y99.05, dollar-yen bounced on demand from real money. Euro-dollar’s clean break of $1.3100 provided the momentum for euro-yen which extended through Y130.00, flushing stops on the move. Risk appetite increased and the cross took out the Y130.50 barrier, before a bout of profit taking pared some gains. Dollar-yen tracked the move, aided by macro demand extended to Y99.53, before it too pared light gains. The yen pairs remain in consolidation mode and head into the NY session at Y99.40/Y130.20.
EasyForexNews Research Team