EUR – Closed in NY Friday at $1.3640, having corrected off US NFP react highs $1.3711. The boost from US employment report came as market reacted more to the upgraded back revisions. Euro-dollar edged to an early high of $1.3660 in Asia before turning lower, the move down seen on euro-yen reversing off highs as this rate failed again to take out Y127.00, and dollar-yen met stiff resistance ahead of Y93.00. Euro-dollar eased through minor support at $1.3630, extending lows to $1.3619 during the Asian afternoon, edging back toward $1.3630 into the European open. Recovery extended to $1.3636 into Europe but move quickly met sell interest as early Europe reacted to political concerns in Spain and Italy. Widening in those peripheral bond spreads weighed on the euro, with sales via the crosses acting to press rate below the Asian base, with triggered stops sub $1.3610 extending move to $1.3600. Second wave sales took rate below the figure and on to $1.3580 where it met stronger demand interest, though this only cushioned the move, recovery efforts holding heavy. Traders still seen favouring further upside progress ahead of Thursday’s ECB meeting, look to buy into dips between $1.3580 through to $1.3520, placing stops sub $1.3480.
GBP – Closed in NY Friday at $1.5693, just off traded lows at $1.5690. Rate had seen a sharp sell off Friday, the move driven by a resurgent euro-sterling, the cross pressured up to stg0.8711 as the euro was boosted post US NFP in a risk appetite rally, while sterling remained an outsider to risk benefits. Cable remained under pressure into early Asia, extending lows to $1.5683 before recovering, the underlying bearish tone remaining in place as rate settled between $1.5695/10 through to the European open. Euro-sterling recovered from its NY close at stg0.8688 to stg0.8704 in early Asia before it turned lower, the rate settling between stg0.8674/84 through the Asian afternoon and into Europe. The corrective pullback in the cross continued in Europe, traders noting that move was giving added strength to noted support at $1.5680 in cable. Middle east sovereign wealth fund demand in cable then took rate through its overnight high at $1.5710 and on to $1.5731 ahead of UK construction PMI release. A weaker than expected number only provided a slight dent to sterling, with demand taking rate on to $1.5638, while the cross pressed down to challenge support into stg0.8630. Despite this recovery in sterling the underlying tone remains negative.
JPY – Barrier interest at Y93.00 became the early interest in Asia with demand taking the rate to a recovery high of Y92.91 before it ran into strong sell interest. Traders reported ‘black-box’ supply (some linking this interest to sales of 10-yr UST’s) from above Y92.70 which provided added weight as the rate squeezed down to Y92.50. Euro-yen lifted to Y126.86 in early Asia before it tracked dollar-yen’s pullback to Y126.06. Recovery efforts were capped at Y126.50, though rate remained buoyed ahead of the European open. Dollar-yen opened on a bid tone in early Europe, the rate lifted to Y92.90 on demand from US bank names. Weak yen sentiment continued and the rate extended gains to take out the Y93.00 barrier, flushing stops on the move to print intraday highs of Y93.18, late dealings eased to Y93.07. The cross found support ahead of Y126.00 and lifted to Y126.40 on demand from a reported directional name. Dollar-yen’s break of the Y93.00 barrier extended to Y126.71, before profit take sales pared light gains.
EasyForexNews Research Team