Article by ForexTime

USD/JPY and EUR/JPY saw fresh trend highs early in Asia, continuing up after the very strong US non-farm payrolls report and moves up in US yields Friday. USD/JPY led, up to 121.69 Friday and to 121.86 early before pulling back. The retracement low was 121.34. Japanese importer and investor bids remain at 120.30-40 but trader stops are eyed below here and 121.00. Though the bias remains up, the market is overbought, and it didn’t take much for it to pull back from the high – only a smattering of Japanese exporter and option-related sales along with profit-taking by longs. Large option expiries at 121.50 (@$2 bln) helped steady the market later. EUR/JPY too saw a fresh trend high of 149.79 before falling back to 149.25. GBP/JPY traded up to 189.65 Friday. The early Asia high was limited to 189.63 and the retracement low 188.98. AUD/JPY has underperformed as of late, only up to 101.36 Friday before pulling back. Asia saw it pull back some more, off from 101.12 early to 100.66. NZD/JPY fell back from Friday’s high of 93.96 and an early Asia high of 93.65 to 92.89.

EUR/USD opened in Asia at 1.2280 after selling off Friday in the wake of much better than expected US non-farm payrolls data. Off a bit to 1.2277 early, it then proceeded to grind higher as Asia took profits on long USD positions. A high of 1.2304 was seen before offers ahead of hourly resistance at 1.2310 pushed it back. EUR/USD is managing to hold up reasonably well considering even more favorable US-EZ yield differentials and even larger divergence in central bank expectations. Option-related bids at 1.2270-80 look to provide support for now. The trend however remains down and short-covering rallies should continue to be viewed as selling opportunities.

GBP/USD fell back from an early high of 1.5590 to 1.5562 with some choppiness noted in between. Moves towards 1.5500 are seen likely, 1.5507 a low seen in the first week of September ’13. EUR/GBP looked better bid between 0.7881-0.7900.

USD/CHF traded quietly between 0.9774-93, in a holding pattern after the trade up to 0.9799 Friday. EUR/CHF did little, holding between 1.2020-29.

AUD/USD gapped down to 0.8288 at the Sydney open as stops below 0.8300 were tripped. It later pushed back up above 0.8300 to 0.8324, effectively closing the gap as USD longs booked profits. @0.8320 on the release of China trade data, it fell again, this time to 0.8281 with the data much worse than expected. Sentiment remains decidedly bearish given the hawkish turn in Fed expectations and the dovish turn in RBA expectations. Decent technical support is not eyed till 0.8060-80. Specs look to continue to sell rallies towards 0.8400.

Article by ForexTime

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