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By XE Market Analysis April 25, 2014 2:40 am
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    XE Market Analysis: Europe - Apr 25, 2014

    It has been a quiet session in pre-European Asian trade, partly due to Australian and New Zealand being closed for the ANZAC Day public holiday. USD-JPY continued to gently oscillate in the low-to-mid 102s, EUR-USD flat-lined around 1.3830-35, and AUD-USD edged modestly higher, to the 0.9275-80 area. Japan's March CPI data had little bearing on markets, coming in at 1.6% y/y, matching the median forecast.

    [EUR, USD]
    We continue to favour the downside in EUR-USD, partly as the ECB is desirous of a weaker euro, while. Technically, also, the rally from last's July 1.2042 low to the early March peak of 1.3966 is waning. momentum indicators (particularly apparent on the weekly chart, where there is a strong divergence between underlying momentum and price trend). Resistance is marked at 1.3850-55, support at 1.3785 and 1.3765. .

    [USD, JPY]
    USD-JPY has continued to oscillate in the 102s. The pair is lacking direction amid a broad sideways range, roughly contained within 100.00-105.00, which has been in place since early January. This stasis may persist for some time, though technical analysts will be marking this as a potential topping formation after the steep rally from levels around 75.0 that was seen during the second part of last year.

    [GBP, USD]
    Sterling has lost upside steam in the wake of the BoE minutes release on Wednesday. The minutes didn't mark much of a departure from the already established dovish policy stance, which was a disappointment to us and some market participants who had been anticipating more of a decisively hawkish tone. Cable settled in the high 1.67s, down from the week's peak at 1.6839. We continue to target 1.7000 as we see the U.K. economic recovery holding strong into Q3. Support is marked at and 1.6762 and 1.6750.

    [USD, CHF]
    EUR-CHF has settled around 1.2200 again, having recovered from the one-month low of 1.2142 that was seen last on Monday. The cycle low of 1.2104 was left untested. While situation in the Ukraine remains a concern, and this is a potential supportive factor for the CHF, the threat of SNB intervention into its 1.2000 limit peg is helping to deter franc buying. SNB's Jordan said earlier in the month that Swiss inflation remains "very low," and that the franc cap would still be defended.

    [USD, CAD]
    USD-CAD has settled just above 1.1000 after recovering from the three-month low of 1.0858 that was seen on Apr-9. The failure to make weekly close under 1.0900-10 was disappointing to CAD bulls, to whom we would advise caution as the Fed vs BoC stance should remain broadly supportive of USD-CAD. Resistance is pegged at 1.1059-60 (50-day moving average) and 1.1100 (former pivot level). Support is marked at 1.0985 (20-day moving average) and 1.0942 (Apr-14 low).

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