A fairly subdued early Asian session

EUR/USD

Range: 1.4407 – 1.4514

Support: 1.4400

Resistance: 1.4520/50

A fairly subdued early Asian session was awoken as the MAS re-centered the NEER upwards with initial attempts to take euro higher on the news thwarted as strong yen demand emerged at the Tokyo fix which weighed heavily on euro-yen. The cross dropped back from around Y121.20 to Y120.19, the move dragging euro-dollar through the NY low to $1.4407 before demand emerged to cushion. This early move to risk aversion reversed as local equity markets pared losses, the recovery in euro-yen providing euro-dollar with the initial lift. This recovery caught the market sitting short, a rush to cover providing the momentum that took rate through the opening level and on to $1.4509 into Europe. Resistance seen placed around $1.4510, stronger between $1.4520/30 with the barrier at $1.4530 still in play until Friday.

USD/JPY

Range: 83.20 – 83.93

Support: 83.15

Resistance: 84.00

MAS re-centering NEER upwards appeared to be the catalyst that sparked the Asian market awake overnight, with strong Japanese fund demand for yen emerging into the Tokyo fix adding to a move to risk aversion as Asian equity markets moved into negative territory. Euro-yen came under heavy sell pressure which took this rate from around Y121.20 to Y120.19, the move dragging dollar-yen through its key 200-dma level at Y83.48. This break triggered stops, the added momentum triggering further stops below Y83.30 before profit take demand emerged at Y83.25 to underpin (one trader notes some ‘strange’ activity on EBS at the lows which has caused a disparity in what some are calling the low. Now that the 200-dma has been broken market will now focus on a NY close below this level to confirm bearish tone.

GBPUSDY

Range: 1.6254 – 1.6365

Support: 1.6200

Resistance: 1.6390

Sterling gained buoyancy by the release of improved Nationwide consumer confidence data, which in turn allowed euro-sterling to track early euro-dollar slippage, the cross triggering stops through the NY base at stg0.88705 which took it to session lows of stg0.8860. The recovery in cross yen, as well as the heavy tone in euro-sterling saw cable bounce back through its opening level, pushing on to a session high of $1.6347, extending in Europe to $1.6359. A break of $1.6360 to expose stops, which if triggered to open a move on toward $1.6380/85 ($1.6382 76.4% $1.6430/1.6227). Light UK data calendar with attention on BOE Fisher 1100GMT.

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