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By XE Market Analysis June 25, 2013 2:24 pm
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    XE Market Analysis: Asia - Jun 25, 2013

    The dollar moved broadly higher in N.Y. trade on Tuesday, helped by a series of positive U.S. data releases. The May durables report was strong, while April home prices edged up, and May new home sales beat expectations. June consumer confidence was sharply higher, and the Richmond Fed index beat the mark as well. Dollar buying was seen through the morning, before profit taking set in. After peaking over 1.3140, EUR-USD moved to 1.3065 lows before recovering back briefly over 1.3100. USD-JPY moved up from 97.25, to test 98.00, where sellers lay in waiting. Wednesday's U.S. calendar reveals the third Q1 GDP print, along with final Q1 corporate profits, and weekly EIA petroleum inventory data.

    [EUR, USD]
    EUR-USD bumped across the 200-dma for the second consecutive session amid general dollar strength and dovish sounding rhetoric from ECB officials. Progress through 1.3070 was limited again though by corporate bids and the threat of commercial flows from sovereign types lower down. EUR-USD moved briefly back over 1.3100, though quickly ran into sellers. Focus will be on the downside into the close, where a N.Y. close under the 200-moving day average of 1.3070 will likely see euro selling continue overnight. Option backed sellers have reportedly been sporadic sellers into rallies today, as 1.3050-25 strikes are seen rolling off on Wednesday.

    [USD, JPY]
    USD-JPY is ran into traffic ahead of 98.00. Good technical resistance and option related activity kept a lid on gains. Very large option expiries are noted tomorrow between 97.00 and 98.50. The largest strikes are reported from 98.00 to 98.25. and could keep USD-JPY movement limited after heavy overnight interest reportedly went through. USD-JPY's inability to close above on Monday was also a negative and another close below this level today would encourage further selling pressure on upticks.

    [GBP, USD]
    Corporate selling went though Cable ahead of the U.S. data from 1.5475 and it hit intra-day lows just under 1.5425 as the dollar bid steepened. The Cable tone is mixed, which will see more range players on either side of the market. Support is noted at 1.5400-10 from intra-day accounts, while last week's pullback from over 1.5700 should still encourage supply on upticks. Order congestion has started to build across 1.5500 and between 1.5520 to 1.5530.

    [USD, CHF]
    EUR-CHF benefited from better sentiment. It carved out highs a shade over 1.2290 as USD-CHF once again influenced the cross. It rallied out of 0.9330 and reached 0.9408 highs, fueling a EUR-CHF move out of 1.2265. After recent market volatility SNB board member Zurbruegg reiterated the importance of the CHF cap, which he said remained as current as ever. There was evidence of swissy inflows yesterday. However, EUR-CHF met very good local demand ahead of 1.2220, while good long-term support is noted from 1.2215 (200-dma) to 1.2200.

    [USD, CAD]
    USD-CAD gave back the 1.05 handle in London, trading to lows near 1.0460. Standing bids were noted at 1.0460-50, which held up so through the session. The Canadian calendar was empty, so focus was on U.S. releases, and the risk backdrop. Better U.S. data and a rebound in equities saw USD-CAD move higher, though gains were limited to 1.0511, where Canadian name selling stepped in. The pairing then returned under 1.0490, as the USD more broadly corrected some of its post-durables data gains. The 1.0460-50 region should provide initial support.

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