Article by ForexTime

USD/JPY traded heavy whilst the crosses held their own. Broad USD weakness on lower US Treasury yields overnight kept USD/JPY under pressure along with fresh but modest Nikkei weakness. From 103.92, it fell back modestly to 103.70 before steadying. Light stops were tripped below Monday’s 103.75 low. Japanese importer and investor bids trailing lower helped limit the downside. More bids are seen to Friday’s 103.50 low and below. Stops are mixed in below however. Japanese exporters and longs still have offers from around 104.00. The market looks to be bracketed by so-so large option expirations at 103.50 and 104.00 today. The crosses fared better, even EUR/JPY which see-sawed between 136.88-137.16. Like USD/JPY, EUR/JPY too looks to be in consolidation mode ahead of month/quarter-end. The biases still diverge however. AUD/JPY saw a bump up early from 96.84 to 97.25 on good CAPEX data before easing back.

EUR/USD opened in Asia at 1.3193 after a choppy overnight session that saw it rush up to 1.3210 on a Reuters report saying the ECB was unlikely to ease next week unless Friday’s inflation data was particularly weak. It moved up another leg in Asia from 1.3188 to 1.3217 on broad USD weakness. Sellers reemerged from Tuesday’s 1.3214 high. Players here remain short EUR/USD, and another correction higher cannot be ruled out on month-end flows and more short-covering. The gap to Friday’s 1.3240 close could be filled but decent offers are eyed ahead of 1.3250. That said, renewed sales could be seen if German inflation data comes in lower than forecast.

GBP/USD rose modestly from 1.6572 to 1.6605 in line with broad USD weakness. Resistance is eyed at the descending 200-HMA at 1.6608. EUR/GBP traded sideways between 0.7955-63 despite fresh sell recommendations.

USD/CHF fell back modestly from 0.9151 to 0.9132 also in line with broad USD weakness. Some bids were noted around the low. EUR/CHF did little, holding between 1.2065-72 and just above yesterday’s 1.2060 1 ½-year low.

AUD/USD opened in Asia at 0.9336 and traded up another leg from 0.9333 to 0.9373 and adding to gains seen yesterday. Better than expected CAPEX data saw stops above 0.9355 taken out and the trade to the high. The market eased back a bit later with the report more mixed on a closer look-see than the headlines suggested. Offers at 0.9375-80 look to cap for now but stops are tipped above 0.9400. Renewed carry demand could see further moves up into year-end and much to the chagrin of the RBA.

Article by ForexTime

ForexTime Ltd (FXTM) is an award winning international online forex broker regulated by CySEC 185/12 www.forextime.com