EUR/USD – creeping higher amid light flows, trades to $1.2757 area but appears to be already losing momentum, still well shy of the early highs at $1.2785 seen in European dealings. Talk pegged Asian sellers into the high and one US trader arguing against “conventional” wisdom, says the EURO doesn’t trade like the market is short of the pair, bounces are not sustained and EURO sellers quickly emerge as rallies fade, the sellers looking to “scalp” slow bids while also “recycling” EURO bought earlier in the day. While no offers reported this side of $1.2800, traders will expect some supply into the high area, though we have heard talk of stops up there.
USD/CAD – friday’s U.S. non-farm payroll report, showing an increase of 23,000 manufacturing jobs after “four months of little change,” raised another red flag for the Canadian manufacturing sector, analysts said. A marked rise in U.S. competitiveness and an overall softer USD against some currencies in the years since the subprime mortgage crisis, has meant that U.S. and other global firms have begun to think about relocating jobs, especially manufacturing jobs, back in the United States. See MNI mainwire story at 2:06 pm ET for details.
USD/JPY – Japanese markets reopen Tuesday after being closed for Coming of Age day Monday and dollar pair remains locked in the middle of the day’s range, below Y77.00 and perhaps a disappointment to bulls after the pair failed to hold a Friday rally to near Y77.35. Talk on the day today has reiterated demand interest at Y76.60/50 area, citing semi-official bids again, as was the case much of last week. Capping the pair Friday was tech resistance on Ichimoku charts around the Y77.35/40 area with stops positioned just above there, around Y77.40, though exporters have been said to be keen dollar sellers on rallies, damping optimism for a strong bounce.
AUD and NZD – AUD/USD and NZD/USD are a tad firmer early in New Zealand and markets will be watching for building approval data for both Australia and New Zealand as well as China’s December trade balance. In addition, 4Q company earnings announcements kick off in the U.S., with Alcoa (AA) reporting after the New York close, he notes. The AUD/USD is at 1.0232 versus 1.0172 late Monday, and should be bounded by 1.0300 above and 1.0100 below on the day. The NZD/USD is at 0.7873 versus 0.7800 late Monday, Support is at 0.7760, while resistance is at 0.7900.
EasyForexNews Research Team