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By XE Market Analysis December 12, 2014 3:08 pm
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    XE Market Analysis: Asia - Dec 12, 2014

    The dollar remained under pressure in N.Y. on Friday, as risk-off was again in vogue. Stocks tumbled again, as oil prices continued their unrelenting slide, trading under $57.50. The much better than expected December preliminary U. of Michigan sentiment report gave the greenback a brief respite, though dollar selling picked up again into the London close. A minor oil and stock market recovery took the USD off its worst levels into the weekend. EUR-USD opened near 1.2430, and later peaked at 1.2485, under Thursday's high. USD-JPY headed into 118.20 from highs over 119.05, though managed to climb over 118.75 in late dealings. USD-CAD eased back on profit taking after failing to breach 1.1600, though found some support from trend low oil prices.

    [EUR, USD]
    EUR-USD has moved to intra day highs of 1.2485, taking its lead from the sharply lower Wall Street open, and general risk-off conditions. Oil prices remained a concern, with another steep slide in prices this morning scaring off risk takers. Euro resistance was seen at Thursday's 1.2495 peak, though the pairing never quite made it there. Stops are seen building above the 1.2500 level.

    [USD, JPY]
    USD-JPY rallied to 119.08 after the better U.S. sentiment data, though quickly relinquished gains, later dipping to 118.20 lows. Pre-weekend short covering prompted a move back to 118.70, though with risk taking at low levels on Friday, that's all the pairing could muster. Polls suggest that PM Abe will win this weekend's election, which would give yen-negative "Abenomics" policies a fresh mandate.

    [GBP, USD]
    Cable ranged between 1.5698 and 1.5750 in N.Y. trade, though price action was choppy given reported liquidity issues. More of the same can be expected into year end, though range trade may prevail. Key resistance is marked at 1.5825-26. The 1.5541 trend low marks support ahead of 1.5500, while the August 2013 low at 1.5102 should be in the crosshairs of bears.

    [USD, CHF]
    EUR-CHF was chained to a 1.2009-10 range through the session, after extending the losses seen in the wake of the SNB announcement, dropping 1.2015-17 from levels above 1.2030. This brings the rumoured SNB buffer zone between 1.2010 and the 1.2000 franc cap back into the frame. The SNB kept the Libor target range unchanged at 0.00-0.25%. SNB boss Jordan said that upward pressure on the franc has "intensified," and the central bank said it will enforce the cap with "utmost determination" and is prepared to take further steps if necessary. 'Further steps' may include negative interest rates.

    [USD, CAD]
    USD-CAD rallied to five-year highs of 1.1591 overnight, reacting to WTI's fall under $59/bbl. Barrier options are in place at 1.1600, and are likely to be defended near term, though stops over 1.1600 could see the pairing move to June, 2009 highs of 1.1640. USD-CAD, moved lower in late morning, easing under 1.1520, reportedly after running into very heavy sellers said to be parked from 1.1580 to 1.1600. Overall though, with oil prices teetering, and current risk-off conditions generally, USD-CAD risk remains to the upside.

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