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By XE Market Analysis January 13, 2014 3:11 pm
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    XE Market Analysis: Asia - Jan 13, 2014

    The dollar was mostly firmer versus the European majors in N.Y. trade on Monday, though it lost ground to the yen and the CAD. EUR-USD touched 1.2638 lows early in the session, though later rebounded over 1.3660 as equities faltered. USD-JPY traded briefly under 103.00 as risk appetite pulled back, and as Treasury yields dipps\ed a bit lower. There was no data to drive the market, and overall, trade was fairly subdued. The U.S. calendar picks up on Tuesday with retail sales, import prices, and business inventory data.

    [EUR, USD]
    EUR-USD dropped to session lows early in the session, touching 1.3638 lows. Following the weak U.S. jobs report on Friday however, there was little appetite for too many dollars, and as risk levels faded, the pairing inched back over 1.3660 in relatively light trade. It remains to be seen, but should incoming U.S. data remain on a firmer footing, euro upside will be limited as well, though for now, the market remains a bit leery of the outlook for now.

    [USD, JPY]
    USD-JPY opened near 103.55 and made its way lower early in the session. The pairing gave the 103.00 level a quick test, though ran into a good layer of bids just under the figure, and subsequently bounced back toward 103.40. The market will used today's pullback to re-load long positions, as the Japanese holiday, and lack of liquidity likely exaggerated the pairing's decline today. Sell Stops are noted at 102.90, though were never seriously threatened, though could be overnight, as risk appetite remained weak into the close.

    [GBP, USD]
    We remain sterling bullish, though the 1.6500-1.6510 zone in Cable is a strong resistance point. This said, cable reversed sharply lower through the session on Monday, touching lows under 1.6350 before stabilizing. The pairing had nudged to just under 1.65 in Asia, before being hit with another round of profit taking following softer U.K. production and retail sales data.

    [USD, CHF]
    The CHF has seen some choppy price action in recent sessions, but overall we expect the currency to remain on a bigger-picture softer footing as a consequence of the unwinding in the Swiss currency's safe haven premium as the period of Fed policy uncertainty ended with its decision to commence QE tapering. Resistance comes in at 1.2400, support at 1.2320 and 1.2300.

    [USD, CAD]
    USD-CAD rolled over, touching lows of 1.0878 in early North American trade. The pairing touched 1.0929 highs in London, though with offers noted at 1.0930-40, and barrier option defense seen in front of 1.0950, profit taking set in. Sellers stepped in on the move under 1.0910, and again below the previous London low of 1.0891. Support is now seen at 1.0850, though weak oil prices, and a softer risk backdrop limited downside from there.

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