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By XE Market Analysis May 22, 2014 2:10 pm
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    XE Market Analysis: Asia - May 22, 2014

    The dollar posted modest gains in N.Y. on Thursday, taking EUR-USD under 1.3650, and USD-JPY toward 101.80. After making session lows of 1.3647, the euro only managed gain to 1.3663, before fading lower again. The pairing found good two-way interest in the 1.3650s, though managed to avoid large stops reportedly at 1.3650. USD-JPY kept its China PMI inspired rally going, moving up on better risk appetite overall. The CAD stumbled briefly on softer Canadian retail sales data, while cable retraced back to 1.6850 after once again failing to hold the 1.69 handle in London. On the data front, jobless claims were a bit higher than expected, leading indicators were strong, while home sales missed a bit, and flash PMI beat the street.

    [EUR, USD]
    EUR-USD suffered from a slow but steady decline through the session, touching 1.3647. The better U.S. flash PMI data helped USD sentiment, as did a modest turn higher on Wall Street. Sell-stops are now noted at 1.3630, while offers are said to be coming in at 1.3680. There was never much bounce for EUR-USD, as it managed just 1.3663 highs before settling under 1.3650 again. A N.Y. close under 1.3650 will be taken as a bearish signal, where above mentioned stops would likely be threatened.

    [USD, JPY]
    USD-JPY eased to 101.55 from 101.70 following the U.S. jobless claims, though as equities perked up some, the pairing headed toward 101.80 by late morning. Sellers were in place at 80, reportedly Japanese exporters, though the dollar stayed firm into the close, indicating a test of 102.00 may be in the cards in Tokyo trade.

    [GBP, USD]
    EUR-GBP recovered from its 17-month low, after as-expected GDP revisions, and firmer U.K. borrowing weighed on the pound. The cross reclaimed the 0.91 handle for a while though as the pound outperformed the euro in N.Y. trade, eased back toward 0.8090. Cable was again unable to hold the 1.6900 level, and it faded back to 1.6850 in N.Y. dealings.

    [USD, CHF]
    EUR-CHF steadied near 1.2220. The Swiss franc has been weakening over the last several weeks, reflective of a eroding safe-haven premium as markets take a more sanguine view of the Ukraine situation. The cycle low of 1.2104 and 1.2100 are key big-picture support levels. The threat of SNB intervention into its 1.2000 limit peg helped to deter franc buying to some extent. SNB's Jordan repeated recently that the central bank remains committed to defending the currency cap.

    [USD, CAD]
    USD-CAD rallied over 1.0930 from near 1.0910 after the softer Canadian retail sales data, after finding good support into the 1.09 level overnight,. Wednesday's 1,0941 high will provide interim resistance, while offers noted from 1.0950 capped further gains. The pairing settled in on either side of 1.09 through the remainder of the session.

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