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By XE Market Analysis February 5, 2014 2:47 pm
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    XE Market Analysis: Asia - Feb 05, 2014

    The dollar was mostly rangebound in a choppy FX session in N.Y. on Wednesday. A slightly softer ADP jobs print had little immediate impact, nor did an in-line non-manufacturing ISM outcome. Equities traded erratically on either side of flat through the session, along with the greenback. Focus remains on Thursday's ECB meeting, and Friday's official U.S. employment report, and we expect FX chop to continue through the overnight session. With traders keeping a low profile however, we can expect recent ranges to hold up for now.

    [EUR, USD]
    Heavy EUR-USD offers were noted into 1.3550, and the pairing has back toward N.Y. session lows under 1.3510. The 1.3500-50 band seems to be the play for now, as the The post-ISM bounce in stocks and fade in the euro were short lived. EUR-USD popped back toward 1.3550 after dipping under 1.3510. It appears the markets are continuing to jockey for position ahead of the ECB tomorrow, and the jobs report on Friday.

    [USD, JPY]
    USD-JPY dipped briefly under the 100.85 level into the ADP jobs data, though recovered the 101 handle quickly afterwards. After lingering in the 101.20's, the pairing touched session highs of 101.63 after the in-line non-manufacturing ISM results. Traders appeared unwilling to push too hard into the ECB meeting on Thursday, and the official U.S. jobs report on Friday, so like other major dollar pairings, we expect ranges to hold up for now.

    [GBP, USD]
    Sterling recoiled following the services PMI disappointment out of the U.K., which unexpectedly dipped to 58.3 in January, the lowest since last June and fitting the emerging picture moderating recovery momentum after a period of above-trend growth. Cable touched lows of 1.6253 in early N.Y. trade, levels last seen on December 17, though rebounded over 1.6300 later on short covering. Support now comes in at 1.6215, with resistance up at 1.6350.

    [USD, CHF]
    EUR-CHF remained above 1.2200 in N.Y. on Wednesday, with the cross maintaining a 1.2205 to 1.2235 range. Price action was choppy into the ECB meeting on Thursday, though with risk levels more stable the past couple of days, CHF trade has not been as manic. Friday's U.S. payrolls report could be a game changer, so players may keep some powder dry until then. The Dec-17 cycle low of 1.2167 remains in scope. We don't advise speculative accounts to hold long CHF exposures below 1.2100, should such levels be seen, given the threat of SNB intervention ahead of its 1.2000 limit peg. A decent U.S. jobs report would likely help the cross build a base around 1.2200-1.2250.

    [USD, CAD]
    USD-CAD eased under 1.1050 into the North American open, though quickly found buyers under 1.1040. As has reportedly been the case all week, corporate buyers stepped in again on the modest pullback. The pairing subsequently moved up over 1.1070, and eventually through standing offers at 1.1100. After posting highs over 1.1120, profit taking set in as risk appetite improved, taking USD-CAD back into 1.1075.

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