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By XE Market Analysis December 5, 2014 6:26 am
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    XE Market Analysis: North America - Dec 05, 2014

    The dollar traded firmer as markets anticipate the U.S. employment report, which is generally expected to come in sufficiently robust enough to paint a contrasting picture to the situation in the Eurozone and other key economies. EUR-USD tipped to the 1.2350 area, over 100 pips down from yesterday's post-ECB high and little affected by an unexpected jump in German manufacturing orders data today. USD-JPY posted a fresh trend high for a fifth consecutive day, trading above 120.40for the first time since July 2007. Expectations that Abe will win next week's election, which would give yen-negative "Abenomics" policies a fresh mandate, has been weighting on the yen. EUR-CHF continued to ply a narrow range above 1.2020. FX reserves data out of Switzerland showed an increase to CHF 462.4 bln in November from CHF 460.0 bln in September, prompting market speculation that the increase was as a consequence of intervention, though the SNB refrained from providing an explanation. AUD-USD settled to a consolidation in the upper 0.83s, holding above yesterday's four-year low at 0.8355.

    [EUR, USD]
    EUR-USD tipped lower, to the 1.2350 area, little affected by an unexpected jump in German manufacturing orders as market participants bide time into the U.S. payrolls release. Expectations for a robust report, at least sufficient enough to paint a contrasting picture to the situation in the Eurozone, has been encouraging EUR-USD lower after the euro ran above 1.2450 yesterday in the wake of the ECB's press conference. And while ECB boss Draghi failed to give a clear commitment to QE yesterday, he nonetheless left the door wide open for such a move. We are looking for an eventual make move on the July 2012 low at 1.2042 on the driver of diverging Eurozone and U.S. economic growth.

    [USD, JPY]
    USD-JPY has traded above 120.30 for the first time since July 2007. Expectations that Abe will win next week's election, which would give yen-negative "Abenomics" policies a fresh mandate, are weighting on the yen. Support is at 119.75 and 119.45-50.

    [GBP, USD]
    Cable looks to have established equilibrium in the mid-to-upper 1.50s after a five-month decline from highs near 1.7200. Cable resistance is marked at 1.5705-10, and support is at 1.5625 and 1.5600.

    [USD, CHF]
    EUR-CHF has continued to ply a narrow range above 1.2020, giving the SNB a little space between spot levels and its rumoured buffer zone between 1.2010 and the 1.2000 franc cap. Foreign currency reserves data out of Switzerland showed an increase to CHF 462.4 bln in November from CHF 460.0 bln in September. This prompted market speculation that the increase was as a consequence of intervention, though the SNB refrained from providing an explanation.

    [USD, CAD]
    USD-CAD has settled in the 1.13s, so far lacking the muster for a move on the three-week high at 1.1459 and the cycle peak at 1.1467. We anticipate a move on 1.1500 with the CAD likely to trend lower on the back of soft oil prices. Support is marked at 1.1293-1.1300.

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