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By XE Market Analysis June 3, 2014 2:53 pm
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    XE Market Analysis: Asia - Jun 03, 2014

    FX trade was very quiet in N.Y. on Tuesday, though the dollar managed modest gains versus the yen. EUR- USD was a slightly different story, and while ranges were kept inside familiar bands, the euro managed to move a bit higher. Short covering into Thursday's ECB meeting appeared to be a driver, though EUR-USD stopped dead at Friday's 1.3650 peak. USD-JPY meanwhile, edged over 102.50, with Asian gains added to through the session. USD-CAD inched up to near two-week highs into Wednesday's BoC announcement, while USD-CHF was pushed back from near 0.9000. U.S. factory orders beat expectations, but had no impact. Wall Street was marginally underwater, while Treasury yields moved higher.

    [EUR, USD]
    EUR-USD ran up to 1.3647 highs early in the session, just shy of Friday's 1.3650 peak. Standing offers are in place at 1.3650, and again at 1.3680, and into Thursday's ECB meeting, where expectations for new easing measures run fairly high, we don't expect the euro to run away to the upside. This said, given the lack of follow through under 1.3600, some shorts may be getting frustrated.

    [USD, JPY]
    After opening near 102.30, USD-JPY touched 102.54, where it was stopped in its tracks by reported Japanese standing offers from 102.50. The pairing had benefited from better risk levels in Asia following the firmer China PMI, though offers are now seen lined up to the 103.00 mark, which was last printed on May 1.

    [GBP, USD]
    Sterling is mixed against its main trading peers, lower against the generally firmer euro and near net unchanged on the day against the dollar. EUR-GBP rose to 0.8148, a five-day high, from a 0.8106 low, which was a six-day nadir, a price action that contributes to the generally confused chop that the cross has seen since making a 17-month low on May-23. Cable, meanwhile, seems to be entering a period of broad stability. Resistance is marked at 1.6778, which encompasses today's peak and the 50-day moving average, and 1.6800, support is at 1.6724 and 1.6713.

    [USD, CHF]
    EUR-CHF was dead-sideways over 1.2210 in N.Y., after slipping under the figure on Friday, which was likely due to month-end considerations. The Swiss franc has been quite steady, though USD-CHF eased back some after failing to take out the 0.9000 level.

    [USD, CAD]
    USD-CAD made nearly two-week highs of 1.0922, though with offers parked at 1.0925-30, upside from there ground to a halt. The softer risk backdrop supported the pairing through the morning, while ahead of the BoC announcement, and trade data tomorrow, some USD-CAD short covering was reported. The May 21 peak of 1.0941 should provide initial resistance ahead of Wednesday's policy announcement.

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