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By XE Market Analysis May 5, 2014 2:52 pm
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    XE Market Analysis: Asia - May 05, 2014

    FX trade was very quiet in N.Y. on Monday, as a London bank holiday kept liquidity and interest on the light side. Major dollar pairings remained inside well-worn, and narrow trading bands through the session. Better than expected U.S. non-manufacturing ISM data helped the greenback marginally, and helped USD-JPY claw back a toe-hold on the 102.00 handle. That move was helped by slightly higher Treasury yields, and a turnaround from sharp losses on Wall Street. EUR-USD was inside of 1.3870-90 throughout the day.

    [EUR, USD]
    EUR-USD was stuck inside a 1.3872-86 range since the N.Y. open, with London's holiday keeping liquidity and interest subdued. The May 1 peak of 1.3889 provided good resistance through the session, with offers in place from there to 1.3900. Talk of option barrier defense ahead of the figure has been heard, which for today at least, limited upside.

    [USD, JPY]
    USD-JPY held the 102 handle, as Wall Street turned sharp losses into modest gains. Ranges were tight however, with offers seen into 102.25. The pairing rallied from just under 102.00 to 102.13 ahead of the services ISM release, which raised some eyebrows, though with talk of semi-official bids in place down to 101.80, the modest move higher was likely already in the cards.

    [GBP, USD]
    Cable settled back below 1.6900 after clocking a new-major trend peak of 1.6923 in the wake of the stellar manufacturing PMI data out of the U.K. last week., though this was offset by sub-expectations construction PMI. We continue to target 1.7000. The services PMI this Tuesday should come in at a robust level. Support is marked at 1.6850.

    [USD, CHF]
    EUR-CHF dipped and matched the Apr-28 low as the Swiss franc safe-haven premium rose as the situation in Ukraine continued to deteriorate. The cycle low of 1.2104 and 1.2100 are considered key support levels. While situation in the Ukraine remains a concern, and a potential supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying to some extent.

    [USD, CAD]
    USD-CAD was supported through mid-morning, with China growth concerns and the Ukraine denting risk sentiment. The pairing topped out near 1.0990, as offers were seen parked from 1.1000. As Wall Street turned around however, the CAD perked up slightly, taking USD-CAD to intra day lows of 1.0953.

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