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By XE Market Analysis August 9, 2013 11:09 am
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    XE Market Analysis: Asia - Aug 09, 2013

    The dollar was mixed into the weekend as position adjustment saw more disjointed price action. It moved a bit higher versus the European majors on corrective action. EUR-USD's inability to break 1.3400 fueled light long liquidation and it headed to 1.3350. Cable topped out over 1.5550 and headed back to 1.5500 amid leverage selling; unsurprisingly after the surge from 1.5205 on Wednesday. USD-JPY struggled due to a weak chart pattern and a nervous tone across global stocks as Fed taper risk remained a background influence. However, the biggest footprint on the session came from AUD-USD, which gained more than 1% to clear 0.9200 on short covering amid more positive data from China overnight. Elsewhere, USD-CAD was flat around 1.0300 after it was unable to sustain higher levels in spite of the plunge in Canadian jobs.

    [EUR, USD]
    EUR-USD consolidated the recent rally. It traded as high as 1.3401 in Asia, but then experienced sideways to lower levels as very strong offers put a top in place. A heavy concentration of bids at 1.3350 limited the downside. The short term is still pointing higher, but ahead of the weekend profit taking picked up. Looking ahead there may be a limited window for EUR-USD upside if Fed taper expectations rise into September NFP data and then the FOMC meeting. Very strong resistance is noted at the 200-week MA at 1.3402 and the double top from June 18-19 at 1.3415-20.

    [USD, JPY]
    JPY strengthened. A move in risk assets guided intra-day flows. Stocks were mixed to lower globally and fed an early move down in USD-JPY. On the daily chart it remained vulnerable despite breaking a four session run of lower lows today. JPY traders are also poised for more potential flows related to bond redemption and coupon payments that are due in the second half of the month and after today's pause in action there may be more pressure on key levels next week. On the downside, orders were reset between 96.20 and 96.00 following the move to 95.81 on Thursday, though the big interest remains at 95.80 and 95.50, where both bids and stops lie.

    [GBP, USD]
    Cable consolidated the recent rally. It traded on a firm footing during the European open, but met very good offers ahead of yesterday's 1.5574 top. A reserve manager bought the dip during the European morning and there was fleeting support from a very impressive U.K. trade number, boosted by a surge in exports. However, ahead of the weekend there was no appetite to break the topside and fund selling picked up and it headed back to 1.5500 in N.Y. trade. The downside should remain limited next week as data over the coming week should re-affirm the acceleration in economic recovery that has become so clearly evident.

    [USD, CHF]
    CHF struggled to sustain easier levels, which was also the case on Thursday. The CHF's inability to move lower is a symptom of dollar weakness. USD-CHF still looks heavy around 0.9200 after it dropped to 0.9175 over Thursday's London close and continued to meet sellers on upticks. This forced EUR-CHF from just ahead of 1.2320 back below 1.2300 and it is consolidating in tight ranges around the figure.

    [USD, CAD]
    USD-CAD jumped amid a sharp drop in Canadian employment, while housing starts also dipped. The dollar pairing moved into 1.0350 versus 1.0286 lows in early trade. Today's data should put a floor in place. Adding to support are outstanding expiries at 1.0300 and chart levels at 1.0280 to 1.0250. However, short term accounts that sold on the break of 1.0350 successfully capped around 1.0350-60 and the recent failure over 1.0400 remained a negative influence on the daily chart. It eventually ended the session close to flat around 1.0300.

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