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By XE Market Analysis November 10, 2014 3:51 pm
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    XE Market Analysis: Asia - Nov 10, 2014

    The dollar traded broadly higher in N.Y. on Monday, with price action relatively slow and methodical through the session. After peaking at 1.2486 in early dealings, EUR-USD faded under 1.2425 by mid afternoon, while USD-JPY made its way to 114.80, after opening near 114.10. There was no data to drive markets, though a modest Wall Street rally, and slightly firmer Treasury yields supported the dollar.

    [EUR, USD]
    EUR-USD eased off its highs of 1.2509, touched ahead of the N.Y. open in early trade. The pairing later dropped under 1.2470, on the back of modestly improved equities, and slightly higher Treasury yields. The London low of 1.2466 provided initial support, though selling picked up some on the move under the level, resulting in a low near 1.2420. Additional bidding interest is now seen parked at 1.2400. Trade overall remained light, with a lack of data keeping activity relatively muted.

    [USD, JPY]
    USD-JPY traded up to just over 114.85 from near 114.20, gaining nearly 100 points from its London low. The rally came in tandem with firmer equities and yields, though talk of Japanese offers layered from 114.80 to 115.00 could cap further gains for the time being. On the move from under 114.00 overnight, there had been talk of renewed carry trade interest, with dollar proceeds reportedly moving into U.S. equity markets.

    [GBP, USD]
    Cable has recovered the 1.59 handle in London trade after posting an 13-month low at 1.5790 on Friday, which took out our 1.5854 target (which was the November 2013 low). We anticipate more of the same as we see U.K.'s recovery pace will continue to ebb over the coming quarter due to the impact of economic stagnation across the Channel and de-acceleration in some key emerging markets. This will likely contrast to the situation Stateside. Resistance is at 1.5945-50, 1.6000 and 1.6022-28 (former highs), support at 1.5887-90 and 1.5824-25.

    [USD, CHF]
    EUR-CHF remains under pressure, making 1.2021, which is the lowest level seen since September 2012. The risk of SNB intervention is high given the proximity of the 1.2000 limit peg. There has been market talk of SNB bids, though no confirmation of actual intervention. The central bank hasn't officially intervened since 2012. Euro weakness and bouts of risk aversion in global markets have been weighing on the cross recently, while the approaching Gold referendum in Switzerland on Nov-30 is seen as a potentially bearish development for EUR-CHF (should a 'yes' outcome force the SNB, as it would be aginast its wishes, to raise the percentage of gold reserves to 20% from 8% presently).

    [USD, CAD]
    USD-CAD touched session highs over 1.1380 in afternoon trade, though saw some sellers return ahead of noted 1.1360 offers earlier in the session. The move over the 60 level brought fresh buying to bear, resulting in a move to session highs. Oil prices appeared to influenced the CAD once again, with WTI trading under $78, and down over 1.0% on the session. Resistance is seen into 1.1400, with support now at 1.1300.

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