EUR – Euro-dollar closed in NY Monday at $1.3162 after trade through this session was contained within a relatively tight $1.3150/79. Trade through Asia was also confined to a tight range, restricted to $1.3156/78, opening into Europe around $1.3172. Asian traders noted offers in place ahead of $1.3200, with an Asian sovereign said to be a seller here and drawing front run sell interest ahead. Barrier interest is also said to remain in place at the figure (Monday pre open trade at $1.3205 disregarded), with stops building above $1.3205. Bids remain in place between $1.3150/40, sovereign and semi official bids seen in this area Monday, and with some dollar intervention buying from Asian sovereigns overnight was expected to prompt recycling euro-dollar purchases into Europe. Rate came under pressure in early Europe, the rate retesting overnight lows at $1.3156 and again met decent demand here. Rate bounced to $1.3175, with a slight drift to $1.3170 drawing semi official buying which took rate on to $1.3187 late morning. Sovereign buying again seen as the main upside driver, but protection of a $1.3200 barrier providing the next hurdle.
GBP – Closed in NY at $1.6202 after rate had seen extended recovery highs of $1.6217 during Monday trade, pulling back to $1.6193 before recovering into the close. Rate dipped to $1.6195 in opening Asian trade before attracting demand which lifted it to an initial high of $1.6213. A dip to $1.6203 attracted another round of demand and lifted rate on to $1.6218, surpassing Monday’s high but failed to pressure reported offers at $1.6220 and the stops above. Rate held firm in early Europe trade, with moves taking direction from euro-dollar as the cross held around stg0.8125. Cable tracked euro-dollar lower, retesting overnight lows together before picking up fresh demand, the rate breaking above $1.6220 ahead of UK inflation data as euro-sterling squeezed back under stg0.8120. Data was seen inline with expectations, which prompted little reaction, though rate was able to extend recovery to $1.6226 before meeting offers placed between $1.6225/30. Pullbacks so far remain shallow with attention turning to the cross as it recovers ahead of NY.
JPY – Opened in early Europe at Y83.98 and Y110.59, Following on from Monday’s volatile action, as markets reacted to the weekend LDP/NKP election win, dollar-yen and euro-yen were sidelined through Asian trade Tuesday. The dollar was tied to a narrow Y83.83-84.08 range with demand from Japanese names taking the rate through Y84.00, exporters later capped moves. Euro-yen was confined to a tight Y110.35-75 range. Markets now on wait and see as the BOJ policy board meeting moves into focus Dec20. European trade continued light as the dollar remained in consolidation mode, holding above Y83.85. The Asian high at Y84.08 provides initial resistance, ahead of offers at Y84.15/20. Euro-yen extended the corrective pullback off highs in early Europe and ground to lows of Y110.40, support in the dip and aided by semi-official demand recovered to Y110.70. Late profit take sales eased to Y110.60, focus remains on the $1.3200 euro-dollar barrier for direction. Resistance seen from the Asian high at Y110.75, strong offers behind into Y110.95/00.
EasyForexNews Research Team