EUR/USD Continues to crater, tests $1.2900 area with a print or two possibly below. Stops sub $1.2920 added momentum and weak stock backdrop today damping some of the risk-appetite that materialized Tuesday. Other risk favorites also under pressure as stocks wilt and as positions are pared back in early new year chop. Further stops sub $1.2900 with last week’s lows at $1.2858 a nearby destination, albeit with bids layered sub $1.2880. EUR last $1.2902.
EUR/JPY tracks EUR/USD through support to fresh session lows Y99.06, before bouncing to Y99.12 in thin markets. Technicals at Y98.81 which holds the 2% moving average envelope provides support ahead of strong demand at Y98.75/70 (Y98.71 – 2 Jan 12 low).
USD/JPY holds Y76.75 after seeing recent prints just atop Y76.80, the USD able to exert some strength here even as the yen gains some lift as a safe-haven currency, part of the “ugly” race, quips one trader, noting JPY and USD, as well as GBP and CHF, have become safe-haven destinations despite well understood “flaws” or weak points that each has. Earlier lows in the pair minted around Y76.60 and talk from various directions underscores a thicket of bids from that low down to Y76.00 with various accounts listed among the buyers. Talk earlier mentioned offers above Y77.15/20 but more recent talk, and price action, suggests supply is positioned atop Y76.90. USD last at Y76.75.
EUR/CHF UBS strategist Geoffrey Yu notes that UBS went long the EUR/CHF cross earlier this week, with a topside target of Chf1.2500 and a stop at Chf1.1900. UBS does not think that the SNB will allow the cross to break below the Chf1.2000 floor (established Sept 6, 2011). The market eyes Friday’s CPI release (UBS economists look for CPI to
drop to -0.7% y-o-y vs consensus at -0.6%). “…A weak print is likely to reinforce market opinion that the SNB could eventually raise the currency floor, both to ward off deflationary pressures and to boost Swiss economic activity,” Yu says. The cross holds at Chf1.2180
EasyForexNews Research Team