GBP: Opened early Europe at $1.5790, stg0.7896, GBP closed in NY at $1.5783, after recovering off pullback lows of $1.5773, seen after rate had pulled back from extended highs of $1.5805 (this move taking out barrier interest at $1.5800). Rate saw a high of $1.5792 into early Asia before drifting lower, the rate tracking euro-dollar moves as euro-sterling pivoted stg0.7900. Cable eased to a session low of $1.5765 before picking up fresh demand which allowed rate to recoup session losses and retest the early highs ahead of the European open. Euro-dollar slippage into early Europe weighed on euro-sterling, taking it below the Asian base at stg0.7896 to extend its pullback off stg0.7909 to stg0.7885. This move provided cable buoyancy, with demand late morning allowing it to clear Tuesday highs, tripping stops through $1.5810 to take it to $1.5817. Momentum quickly faded with rate easing below $1.5800 late morning, though corrective pullback was seen remaining shallow leaving upside in focus. FOMC Minutes after Europe close to determine next direction.
EUR: Opened early Europe at $1.2467, Euro-dollar closed in NY at $1.2470 after recovering from pullback lows of $1.2457 and having seen extended highs earlier in the session of $1.2488 on continued euro short covering. The negative close on Wall Street was seen souring the recent risk on tone, countering continued euro recovery with euro-dollar consolidating through a subdued Asian session between $1.2459/78. Euro-Aussie demand for ongoing unwinds provided the main support in Asia. Euro-dollar squeezed lower in early Europe, the market initially probing for stops below $1.2460 before extending the move to $1.2448. However, reported demand down to $1.2440 cushioned the move and allowed for a recovery, the rate pushing to a high of $1.2479 before encountering front run short selling. Lot of talk suggesting Dutch PB, semi-official and Asian sovereign sales placed between $1.2480-1.2500, the latter linked to protection of the topside of a $1.20-1.25 DNT structure (Sep5). Failure to push higher prompted spec longs to cover ahead of the NY open, though buoyant tone persists.
JPY: Opened in early Europe at Y79.27 and Y98.77, a negative start for equity markets added weight to dollar-yen on the Asian open and the rate headed lower to print Y79.16. Technical support from the Ichimoku cloud base and decent dip demand led the recovery back to opening levels, extending gains to Y79.30 where the dollar sat in a narrow range for the remainder of the session. Euro-yen opened at Y98.80 and mirrored the dollar move with trade stuck in a tight Y98.71-Y98.91 range. Dollar-yen opened flat in Europe, with lack of data release to drive markets flow remained light and the pair traded a Y79.24-37 range. Strong offers reported at Y79.50, ahead of techs at Y79.51/56 (Ichimoku cloud top, 100 dma). Support from the 200 dma at Y79.24, ahead of bids at Y79.20. Early demand lifted the cross to Y98.88, before easing on profit take sales, rate squeezed and extended losses to Y98.68. Dip demand recovered and the rate tracked euro-dollar’s bid tone flushing stops to Y99.02, before late exporter supply pared gains to settle at Y98.85 ahead of NY.
EasyForexNews Research Team