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By XE Market Analysis July 26, 2013 3:39 am
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    XE Market Analysis: Europe - Jul 26, 2013

    The dollar remained heavy in Asia following Thursday's losses. In N.Y. the dollar faded on weaker than expected data. However, stocks still closed at firmer levels, though this did not carry into Asian markets, which struggled. The Nikkei fell sharply as USD-JPY broke 99.00. A firmer Japan CPI release and tension over the disputed islands with China weighed. The dollar also struggled due to a WSJ Hilsenrath piece, which suggested that the Fed was likely to consider refining its policy message and continue with the current rate of its bond buying target at next week's meeting. EUR consolidated yesterday's move on 1.3300 and Cable held around 1.5380 after it broke to 1.5435 by the N.Y. close.

    [EUR, USD]
    EUR-USD is holding firm after it threatened to break the 1.3300 into Thursday's N.Y. close as dollar losses accelerated on the Hilsenrath piece. Very strong offers emerged in Asia, but buying interest has kept the downside supported overnight and longs eye an extended push higher.

    [USD, JPY]
    USD-JPY fell back from the 99.40 area in early Asia and tripped stops through 99.00 to reach 98.70. The underlying dollar tone was already heavy due to the Hilsenrath piece, but increasing tension over the disputed islands with China added to the risk-off tone, along with firmer CPI data. The BOJ aren't expected to pullback from its current policy stance, but at the same it is also looking unlikely that it will need to provide further stimulus, which could have implications for long-term USD-JPY longs. After USD-JPY broke to the 99.70 area there was tentative demand from Japanese accounts, though it struggled to recover as offers were lowered to the 99.00 area.

    [GBP, USD]
    Dollar weakness forced Cable through the top of its recent range. Thin trading conditions into Thursday's N.Y. close triggered a Cable stop hunt through 1.5400 up to 1.5435. In Asia, a pick up in liquidity saw it pullback to the 1.5380 area. However, improving U.K. fundamentals and a bullish technical backdrop is keeping the downside supported by close-to-market bids at 1.5375-80.

    [USD, CHF]
    USD-CHF met a congestion of two-way flows either side of the 0.9300 level after dollar losses sent it to 0.9284 lows, which were its weakest levels since June-21. The clean break lower should see a build up of selling pressure on upticks. However, we are in territory where good supportive flows are noted from real money, while corporate bids have also been tipped early on.

    [USD, CAD]
    USD-CAD headed to 1.0256 lows on broad based dollar selling pressure. It posted a modest recovery back to 1.0290 in Asia. Equity markets in Europe have started on a positive footing and could also help CAD$ and selling pressure via USD-CAD should build ahead of 1.0300, with the underlying trend pointing to a test of good support at 1.0250.

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    By XE Market Analysis July 25, 2013 2:08 pm
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      XE Market Analysis: Asia - Jul 25, 2013

      FX activity was very light in N.Y. on Thursday, though the dollar faded fairly broadly through the session. Firmer weekly jobless claims and flat non-transport durables weighed on risk taking levels, resulting in a weaker greenback, and softer equities in morning trade. EUR-USD opened just under 1.3200, and made its way to highs over 1.3250 in early afternoon dealings. USD-JPY found support into 99.50, after having trouble rallying out of 99.75. The dollar bloc was firmer, as was sterling and the CHF. Friday's U.S. calendar is thin, with just the final July Michigan sentiment index, and June pending home sales data.

      [EUR, USD]
      EUR-USD opened the N.Y. session near 1.3200, peaking at 1.3238 in the aftermath of the softer U.S. data. The pairing edged up over 1.3250, after breaking the previous intra day high. The minor uptick reportedly came as weak shorts ran for cover. There was little subsequent follow through, with the pairing idling back to 1.3245 into the close.

      [USD, JPY]
      USD-JPY benefited from the underlying trend in Asia. U.S. fund names and Japanese importers forced a move back up yesterday's highs around 100.45. However, it ran into strong offers and profit taking set in and it reverted to the lower end of the recent range at 99.85-90 into the N.Y. open. Higher U.S. yields should keep USD-JPY close to 100.00, though the greenback was heavy overall in N.Y. dealings, and USD-JPY settled in near 99.50.

      [GBP, USD]
      GBP longs booked profit on U.K. Q2 GDP data, which met expectations at 0.6% q/q and 1.4% y/y. Cable traded at 1.5374 highs ahead of the release and then dropped to 1.5264 into the N.Y. open. EUR-GBP edged out lows of 0.8590 pre-data and then moved back through 0.8640. Cable should hold up based on the improving fundamental backdrop, but recent topside moves have met very strong resistance from 1.5390 and this may indicate a near-term top is building.

      [USD, CHF]
      USD-CHF recovered from the 0.9350 region to trade back into 0.9390 as dollar buying picked up in London. The market shrugged off yesterday's series of small stimulus measures by China and even with relatively firm European data there has been no follow through for risk taking. EUR-CHF continued to consolidate between 1.2300 and 1.2400 amid competing EUR and USD flows. USD-CHF met selling pressure on upticks, and eventually made its way through 0.9350 support, to lows under 0.9315.

      [USD, CAD]
      USD-CAD traded about a 30 point range since the North American open, finding buyers into 1.0275, and sellers over 1.0300. The pairing has stayed heavy through the session, following the greenback's overall softer tone, with the rebound in equities adding further weight. The 1.0250 region appears to be key, with a band of bids noted at the level, and decent stops just underneath.

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      By XE Market Analysis July 25, 2013 6:47 am
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        XE Market Analysis: North America - Jul 25, 2013

        The dollar ended the European session on a slightly firmer footing as equity markets fell, which provided light support for JPY and CHF, respectively. The EUR maintained levels close to 1.3200. It only received brief support from German Ifo, which rose slightly. Eurozone M3 growth eased a notch and highlighted weak loan growth. GBP longs booked profit as U.K. Q2 GDP largely met expectations and Cable headed back below 1.5300. There was no reaction overnight from yesterday's mini-stimulus measures announced by China, while a PBoC source reportedly ruled out a cut in the bank reserve ratio requirement.

        [EUR, USD]
        EUR-USD posted knee-jerk gains over the German Ifo. The headline business climate reading rose, but expectations eased slightly. This saw EUR trade up from 1.3215 to 1.3235 and then moved under 1.3200. The bias for EUR is still mildly supportive amid the sloping uptrend on the daily chart since it bottomed out just under 1.3000 on July-15. Hourly studies also point to higher levels since early Asia, though the U.S. yield backdrop is going to pivotal in the near-term after yesterday's price action encouraged dollar gains. Note, real money accounts are still looking to sell EUR into 1.3250-60 and 1.3300.

        [USD, JPY]
        USD-JPY remains positive based on the daily chart and the fundamental backdrop also suggests more dollar upside. However, a heavy congestion of option expiries and the recent pick up in Eurozone and U.K. data weighed against the USD. Strikes close to a yard or so are noted at both 100.50 and 100.00 and forced longs to liquidate as the top of the recent range remained intact on Wednesday and during today's Asia session. An early move on stops saw USD-JPY extend through 99.80, though Japanese names have stemmed the decline and more U.S. fund demand is anticipated on dips.

        [GBP, USD]
        GBP longs booked profit on U.K. Q2 GDP data, which met expectations at 0.6% q/q and 1.4% y/y. Cable traded at 1.5374 highs ahead of the release and then moved under 1.5300. EUR-GBP edged out lows of 0.8590 pre-data and then moved back through 0.8635. However, it is looking vulnerable as EUR is struggling to sustain altitude elsewhere. Cable should hold up based on the improving fundamental backdrop, but recent topside moves have met very strong resistance from 1.5390 and this may indicate a near-term top is building.

        [USD, CHF]
        USD-CHF recovered from the 0.9350 region to trade back into 0.9390 as dollar buying picked up. The improved dollar tone since the European open came as equity markets headed lower on profit taking after a negative lead in Asia. The market shrugged off yesterday's series of small stimulus measures by China and even with relatively firm European data there has been no follow through for risk taking. EUR-CHF continued to consolidate between 1.2350 and 1.2400 amid competing EUR and USD flows. USD-CHF should still meet selling pressure on upticks, but three consecutive closes above 0.9350 and the 200-dma suggests a base may be building.

        [USD, CAD]
        USD-CAD rebounded out of new one-month lows on Wednesday. It traded at 1.0263 at the North American open but has spent most of time thereafter on the front foot as a combination of dollar strength and a downturn in risk appetite weighed. It reached the 1.0325 area by the North American close as trailing stops went through on the break of 1.0310 and 1.0320. Further gains have been limited overnight due to good offers from 1.0330, which were lowered early on in the week.

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        By XE Market Analysis July 25, 2013 2:07 am
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          XE Market Analysis: Europe - Jul 25, 2013

          It was a quiet session in Asia. The dollar held steady after yesterday's pick up in U.S. yields. The 10-year benchmark rose in Asia to 2.607%, which supported the dollar on dips and left EUR close to 1.3200 and USD-JPY close to 100.00. AUD-USD remained heavy following the stop hunt below 0.9180 after yesterday's European close and it extended to 0.9130 overnight. The RBNZ left rates unchanged at 2.5%, but the accompanying policy statement was more hawkish than expected and boosted NZD-USD from 0.7905 in early trade to 0.7990 by late Asia.

          [EUR, USD]
          EUR-USD found a modicum of support on dips, which lifted it out of 1.3190 to 1.3220 by late Asia. Bias is still on higher levels in the near-term, which will encourage a congestion of supportive flows on dips. However, the rise in U.S. yields is likely to work against the topside. On Wednesday, the rally was restricted by real money selling and there are very strong orders from 1.3260-70.

          [USD, JPY]
          USD-JPY benefited from the underlying trend early on. U.S. fund names and Japanese importers forced a move back up yesterday's highs around 100.45. However, it ran into strong offers and profit taking set in and it reverted to the lower end of the recent range at 99.85-90. Higher U.S. yields should keep USD-JPY close to 100.00, but the influence of very large option expiries could see more movement between 100.00 and 100.50 on an intra-day basis.

          [GBP, USD]
          Cable stabilized after Wednesday's correction saw it traded at 1.5289 lows as good support gave way from 1.5335 down to 1.5300. The downturn was largely due to dollar strength as U.S. yields rose. Demand in Asia was noted from the 1.5310 area up to 1.5345. However, in the last few sessions it has struggled to benefit from bullish impetus on the daily chart and the lack of progress on 1.5400 is a potential risk for longs. Today's impetus will come from U.K. GDP data.

          [USD, CHF]
          EUR-CHF remains sidelined as the focus continues to come from competing EUR and USD flows. USD-CHF failed to sustain another downside push yesterday and bounced back to the 0.9390 area by the N.Y. afternoon on dollar strength. However, upward momentum is looking more limited since it briefly traded under the 200-dma on Monday, which is fueling selling pressure on upticks.

          [USD, CAD]
          USD-CAD rebounded out of new one-month lows on Wednesday. It traded at 1.0263 at the North American open but has spent most of time thereafter on the front foot as a combination of dollar strength and a downturn in risk appetite weighed. It reached the 1.0325 area by the North American close as trailing stops went through on the break of 1.0310 and 1.0320. Further gains have been limited in Asia due to good offers from 1.0330, which were lowered early on in the week.

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          By XE Market Analysis July 24, 2013 2:16 pm
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            XE Market Analysis: Asia - Jul 24, 2013

            The dollar added marginally to early gains after the firmer flash PMI and new home sales outcomes, taking EUR-USD to 1.3200 lows, and filling the post-German PMI release "gap" up over 1.3250. USD-JPY traded on a firmer footing over 100.25, supported by elevated Treasury yields. Later in the session, despite faltering equities, the greenback managed further upside, taking the euro to 1.3180, and USD-JPY toward 100.45. A rumored Germany downgrade made the rounds, though did not appear to have much if any impact on the euro. Overall, FX trade was rather subdued, and it appeared most of the dollar's gains were tied to firmed up Treasury yields.

            [EUR, USD]
            The EUR-USD move down from over 1.3250 early in the session was reportedly the result of real-money selling, which came ahead of large offers in place at 1.3260-70. EUR-USD later bounced back over 1.3235, after finding good buyers into the 1.3200 level. The pairing was unable to crack new highs after testing 1.3200 however, and intra day longs appeared to be losing patience. taking it back toward 1.3200 at mid-day, as London sellers were noted. Later, the euro tripped light sell stops at 1.3200, though selling picked up again on the break under the London low of 1.3190, on its way to 1.3180 lows. Talk of sovereign bids from the 80 level was heard, which could provide interim support.

            [USD, JPY]
            USD-JPY peaked at the N.Y. options cut. It reversed course from 100.44 highs to trade back at 100.05, leaving it unchanged from N.Y. open levels. The pair backed up in line with moves via the other dollar majors and also equity markets, which pulled back from their best levels on the session and provided bonds with a modicum of support. The downturn in USD-JPY, while corrective, should not damage the underlying trend, which is skewed to a test on Monday's highs just over 100.50 and then the mid-101 region. Any dips in USD-JPY are currently being supported by U.S. funds, while Japanese real money have also been good buyers in recent sessions.

            [GBP, USD]
            Cable hung on to 1.5300 due to EUR-GBP flows. Longs that were built up in the cross during the European morning were unwound on EUR-USD heaviness, which fed into the Cable upside. It threatened to break lower as support was eventually filled in from 1.5335 to 1.5325 and printed 1.5315 lows. In the last two sessions it has struggled to benefit from bullish impetus on the daily chart and the lack of progress on 1.5400 is a potential risk for longs.

            [USD, CHF]
            USD-CHF probed the downside early on U.S. account interest. The USD-CHF downturn limited the EUR-CHF rally and it edged off the 1.2400 region back to 1.2370. USD-CHF has traded close to the 200-dma since Monday's break lower and after a period of consolidation it looks poised for softer levels eventually. The dollar inched back toward 0.9390 later however, aided by firming Treasury yields.

            [USD, CAD]
            USD-CAD traded to new one-month lows under 1.0265 in early North American dealings, as improved risk appetite supported the CAD. The pairing filled in noted bids at 1.0270-65, but more were seen into 1.0250, halting the pair's declines. Option and corporate backed buying was expected at the level. With little data from either side of the border, USD-CAD direction was largely determined by equity market developments. Wall Street started firmer, though soon turned red. This helped take USD-CAD back over 1.0320 in afternoon dealings.

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            By XE Market Analysis July 24, 2013 6:45 am
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              XE Market Analysis: North America - Jul 24, 2013

              Risk appetite improved in Europe after a poor session in Asia. Today's focus was on PMI data. HSBC's flash reading for China hit an eleven month low and former PBoC Xia Bin said China has signs of a crisis. In contrast, Eurozone data beat expectations on a better than expected reading from France and strong numbers from Germany. This elevated EUR across the board, which weighed on USD, JPY and CHF. Cable tried and failed to clear 1.5400 on EUR-GBP strength. AUD pulled back from 0.9300 in Asia and plunged below 0.9200 in Europe as macro funds traded it as a proxy for China.

              [EUR, USD]
              EUR-USD found support under 1.3200 and headed higher as PMI data from France and Germany came in on the firmer side. China PMI data overnight gave the dollar a small lift, but the technical backdrop provided support. EUR took off from 1.3210 and filled 1.3250 offers with ease as Eurozone data points to economic recovery. German data was particularly strong and the French readings will also be welcomed at a time where the growth outlook has been in the domestic press. EUR eyes the June 20 peak at 1.3268 and 1.3300, where another round of buy stops are anticipated.

              [USD, JPY]
              USD-JPY cleared 100.00 as Eurozone PMI data beat expectations. The composite reading moved above 50 for the first time since January 2012 on strength in the German reading, which buoyed EUR-JPY. The cross was boosted from just under 132.00 to 132.40 and enabled USD-JPY to absorb selling pressure from 99.80 to 100.00. There are more Japanese orders into yesterday's top at 100.20, which are protecting stops at 100.20-25 and more are noted at 100.50. The underlying tone for USD-JPY has been positive since it corrected on Monday as profit taking went through after the Upper House election victory for the LDP.

              [GBP, USD]
              GBP experienced another session of consolidation on further topside failure. Cable came under a bit of pressure in Asia on China data weakness and an early move was noted back through 1.5350. Follow through was contained and Eurozone PMI data strength lifted it back to 1.5390, where very strong offers were noted on Tuesday. Cable's upside was very limited though due to short covering in EUR-GBP from 0.8590 through 0.8625, which left Cable under 1.5350 late on in the European morning. There was no impact from the U.K. CBI Industrial Trends Survey, which added to evidence of a U.K. economic recovery. Price action in Cable supports the view that it may be close to a near-term top and downside pressure could build.

              [USD, CHF]
              EUR-CHF traded over 1.2400 for the first time in just over a week. EUR-CHF was boosted from 1.2360 area on EUR strength amid upbeat Eurozone PMI data. EUR tripped stops at 1.2400 and reached 1.2403. EUR-CHF movement in recent session is supportive after it rebounded out of 1.2320 on Monday and cleared 1.2400 today. There are congestion of offers into 1.2420 that is keeping a round of buy stops intact. If these are cleared away then it will reinforce upside movement. Meanwhile, the EUR-USD upturn forced USD-CHF from 0.9375 to 0.9340 initially but fund demand for EUR-CHF lifted it back to 0.9370. USD-CHF has also found persistent demand on dips since it was unable to sustain a move under the 200-dma on Monday.

              [USD, CAD]
              USD-CAD topped out just over 1.0310 in early Europe. It received a lift overnight from the 1.0278 area as risk aversion steepened on further evidence that China is slowing down. However, in Europe the tone changed as Eurozone PMI data beat expectations on strength in both German manufacturing and services. USD-CAD headed back below 1.0300 and extended through 1.0290. With stocks on the front foot USD-CAD may revisit yesterday's lows and could challenge modest support from June 20 lows at 1.0268.

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              By XE Market Analysis July 24, 2013 2:35 am
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                XE Market Analysis: Europe - Jul 24, 2013

                The dollar found a modicum of support in Asia after China's HSBC flash manufacturing PMI hit an eleven month low of 47.7. The dip in sentiment was compounded by an article in the China Securities Journal, which claimed that China Q4 economic growth may be less than 7%, adding that it's lower limit for growth is misunderstood. EUR pulled back from 1.3230, but still held on to 1.3200. Japan trade data saw exports rise for the fourth consecutive month at 7.4% in June versus a 10.1% rise in May and saw USD-JPY edge up from 99.40 to 99.80. AUD-USD experienced choppy action and took out 0.9300 before it headed back below 0.9250 on China data and Australia Q2 CPI, which reduced expectations of a RBA rate cut in August.

                [EUR, USD]
                EUR-USD consolidated gains over 1.3200 on Tuesday as the dollar was weighed by weak U.S. economic data. The EUR still struggled to clear away very good offers from 1.3250, which falls in line with highs from late June. These held the topside in N.Y. and in Asia there was no appetite to test the upside aggressive. After China PMI data the EUR dipped into the 1.3200 region, where supportive bids were noted from short term accounts playing the range. Weak longs may bail if the EUR struggles to sustain higher levels during the European time zone.

                [USD, JPY]
                USD-JPY continued to trade in a tight range. Japan trade data did not have an impact on the market, although it continued to point to on-going progress in the Japanese economic recovery as exports rose for the fourth consecutive month. USD-JPY keyed off broader dollar movement and AUD-USD's price chop up through 0.9300 and back down to 0.9250 lifted it out of 99.40 early on up to the 99.75 region. China flash PMI data also reinforced growth fears and was another supportive lead for the dollar, but overall rangebound action continues to dominate amid increasing order flow on either side of the 99.00-100.00 corridor.

                [GBP, USD]
                Cable consolidates recent gains. Movement in the last 24 hours have been limited to short term flows. Corporate hedging and retail names kept it capped ahead of resistance into 1.5400 on Tuesday's. A minor push on stops lower down ran out of steam into 1.5325 due to GBP-cross demand, which included leverage names in GBP-JPY, while residual Swiss interest spilled into GBP-CHF. GBP is hanging on positive momentum. However, it could be close to a near-term top after failing to register a higher high on Tuesday and the close under 1.5400 supports this view.

                [USD, CHF]
                EUR-CHF is trading back at familiar levels just in front of 1.2350 after it was unable to sustain yesterday's move higher. A USD-CHF move out of 0.9350 back to 0.9400 and EUR-USD's firm tone lifted EUR-CHF out of 1.2345 to 1.2395 highs. Strong offers at 1.2400 capped, while a downturn in risk appetite encouraged speculative demand for the CHF at cheaper levels. EUR-CHF ended the N.Y. session at 1.2360 and edged lower in Asia as risk aversion picked up on disappointing China PMI. This lifted USD-CHF back out of 0.9345 through 0.9370.

                [USD, CAD]
                USD-CAD is trading back above 1.0300 due to the downturn in risk appetite. Sentiment faded over the N.Y. session on Tuesday, while in Asia more evidence that China is slowing weighed on stocks and the commodity bloc currencies. After bottoming out at 1.0278 on Tuesday it is now trading close to 1.0310. Buyers under 1.0300 included both an Asian sovereign name and IMM accounts. Note, there is also modest support at June 20 lows at 1.0268.

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                By XE Market Analysis July 23, 2013 2:54 pm
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                  XE Market Analysis: Asia - Jul 23, 2013

                  FX trade was light in N.Y. on Tuesday, though the dollar lost ground on the back of softer risk taking sentiment, and a weak Richmond Fed index outcome. EUR-USD was finally able to pierce the a.3200 level decisively, managing 1.3230 highs, before holding steady over the figure through the session. USD-JPY was unable to hold the 100 mark again, and slowly faded lower through the day, The CAD was helped by better Canadian retail sales, while cable stayed firm, though failed to take out 1.5400. USD-CHF gave up some ground, but managed to find support into 0.9350. Wednesday's U.S. calendar brings flash PMI, new home sales, and weekly EIA petroleum inventory data.

                  [EUR, USD]
                  EUR-USD moved into 1.3195 amid interbank demand out of 1.3180 early on. It stalled ahead of 1.3200 due to sovereign offers, which absorbed demand from model funds on dips. EUR-USD later broke higher, and touched 1.3230 highs into the London close, before settling in just over 1.3210. Previous offers at 1.3200 were replaced with bids, while offers were layered from 1.3230 to 1.3250, with stops above there. A N.Y. close over 1.3200 will be taken as supportive in Asia tonight, though tentative euro longs will likely be quick to turn positions on a move back under the figure.

                  [USD, JPY]
                  USD-JPY moved to intra day highs of 100.18 in very early N.Y. dealings, though by mid-morning, the lack of upside momentum saw sellers return. The pairing slowly drifted lower through the morning in very light dealings, eventually settling in around 99.50. Persistent sellers over 100.00 should keep gains limited near term, though dips buyers remain into 99.00. As a result, consolidation may continue near current levels.

                  [GBP, USD]
                  Cable consolidated into the London close. Cable movement was limited to short term flows, as both corporate hedging and retail names kept it capped ahead of resistance into 1.5400. However, once stops were filled through 1.5350 the downside push lost traction due to GBP-cross demand, which included leverage names in GBP-JPY, while residual Swiss interest spilled into GBP-CHF on the coattails of EUR-CHF unwinding. GBP is hanging on positive momentum. However, it could be close to a near-term top after failing to register a higher high today and a close below 1.5400 would support this view.

                  [USD, CHF]
                  EUR-CHF posted a good recovery into the N.Y. open. A USD-CHF move out of 0.9350 back to 0.9400 and EUR-USD's firm tone lifted EUR-CHF out of 1.2345 to 1.2395 highs. Short term swissy longs were also encouraged to turn positions on the positive risk backdrop and for now Eurozone risks have also receded and was another short term positive for the cross. Both the EUR-CHF and USD-CHF chart are still negative on a daily basis. However, USD-CHF's lack of progress under the 200-dma at 0.9358 yesterday indicates more consolidation, while EUR-CHF can break the recent trend if it forces a close over 1.2400.

                  [USD, CAD]
                  USD-CAD fell to lows of 1.0302 from 1.0335 after the much stronger Canadian retail sales outcome. Few dollars changed hands on the way down, though buyers returned into the 1.0300 level. Stops were later a factor under the figure, though initially, short covering interest, and noted Asian sovereign and IMM buyers kept them out of reach. USD-CAD later slipped under 1.0300 for the first time since June 20, easing to 1.0287 lows. The 1.0268 June 20 low is the next support level, and new sell-stops were seen building at 1.0260.

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                  By XE Market Analysis July 22, 2013 2:32 pm
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                    XE Market Analysis: Asia - Jul 22, 2013

                    FX trade was fairly quiet in N.Y. on Monday, though the dollar lost ground to virtually all major currencies. Incoming data was weaker than expected, as both existing home sales, and the Chicago Fed index missed the mark. Equities however, manage to hold onto modest gains through the session, while Treasury yields were nearly flat on the session. The U.S. calendar is light on Tuesday, with just the FHFA home price index, and the July Richmond Fed index on tap.

                    [EUR, USD]
                    EUR sentiment improved as peripheral EU spreads came in, as Portugal's president voiced confidence in the government. EUR-USD traded over 1.3200 a couple of times, tripping stops at 1.3210, on its way to highs over 1.3220. Real money and sovereign backed offers emerged however, though downside was limited to 1.3185, indicating further gains may be in the cards near term.

                    [USD, JPY]
                    USD-JPY tripped sell-stops under 99.50 at mid-morning, though found buyers ahead of 99.25, and has edged back over 99.60 in fairly light dealings. Talk of Japanese bids into the lows was noted, and appeared to stem the bleeding for now. This said, heavy offers are seen into the 100.00 mark, so gains above 99.80 will likely be limited for now.

                    [GBP, USD]
                    Cable extended gains as the dollar experienced another round of selling pressure. Ahead of the U.S. data Cable cleared away resistance at 1.5345-50 and moved through 1.5380. Buyers are lining up into 1.5350 and 1.5330-40 to keep momentum with the topside. Longs are immediately focused on resistance that lies just ahead of 1.5400 barriers, which may slow the move higher initially. However, since the BoE minutes last week the short term picture has shifted dramatically in favour of higher levels. The BoE unexpected vote 9-0 in favor of a steady hand, though are exploring other ways to boost the economy ahead of the August meeting, where details on forward policy guidance will be firmed up.

                    [USD, CHF]
                    USD-CHF broke the 200-dma for the first time since late June under 0.9358. Follow through selling was limited to 0.9345 on profit taking, while EUR-USD also met some natural supply over 1.3200, which has temporarily helped the dollar cause. The technical backdrop is looking weak for the dollar via several currencies. EUR should have scope for higher levels on a series of higher lows in the last few sessions. USD-JPY is looking heavy after it was unable to sustain a run on 101.00 overnight and headed under 99.50 and Cable is up on both a fundamental shift and bullish technical studies. We think this will guide USD-CHF traders and selling into strength looks likely.

                    [USD, CAD]
                    USD-CAD touched 1.0332 lows early, nearly a two-week base, before rallying modestly higher toward 1.0350. Support is seen at 1.0322, coinciding with the July 11 low, and a break there could bring further selling pressure to bear. On the other side of the market, offers were in place from 1.0370. The pairing eventually eased to a 1.0323 low, as gold and equities moved higher.

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                    By XE Market Analysis July 22, 2013 6:51 am
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                      XE Market Analysis Posts: 5061
                      XE Market Analysis: North America - Jul 22, 2013

                      The dollar was softer overall. In Asia, USD-JPY profit taking stood out after longs cut positions as the LDP secured a majority in the Upper House as expected. In Europe, activity was extremely low again, but Cable stop loss buying featured above 1.5300 and dragged EUR-USD up to the 1.3190 area. Risk appetite was positive in Europe as pressure on Portugal eased despite the government failing to reach an agreement on the salvation pact. The government got backing though from the president, who ruled out a snap election. The G20 pledged to put growth before austerity in order to revive the global economy. However, China's vice premier reiterated that focus was on reforming the economy rather than stimulus, with focus on the quality of growth and restructuring. He said policies would be fine tuned when necessary, though.

                      [EUR, USD]
                      EUR-USD posted modest gains. Risk appetite rose in Europe as the pressure on Portugal eased. The government talks on the salvation pact broke down, but the president voiced confidence in the government and ruled an early election, which weighed on 10-year yields. For the most part, EUR traded a tight range, but gained positive traction after on-going demand for Cable on dips triggered a stop hunt above 1.5300 and this fueled follow through demand for EUR to 1.3190. The 1.3200 region is expected to meet very good sell-interest from real money and sovereigns that were active last week and the week before. However, the technical backdrop is increasingly pointing to a topside push and buy stops at 1.3210 are at risk.

                      [USD, JPY]
                      USD-JPY consolidated close to 100.00 since it corrected lower overnight on profit taking. Speculative positioning was cut back after the as-expected LDP election victory over the weekend. The long-term outlook is still for the Nikkei to sustain higher levels and a pick up in USD-JPY, but details of structural reform plans announced by PM Abe in June will not be detailed until September and this has capped follow through demand for now. Dip buying is still likely in the near-term based on the technical backdrop and the interest rate outlook. However, on an intra-day basis it looks like large option expiries at 99.80, 100.00 and 100.50 will keep ranges tight again.

                      [GBP, USD]
                      Cable is on the firmer side as dollar losses in Asia kept it within reach of the 1.5300 level. Stocks in Europe are also higher, which helped the risk backdrop and persistent bid interest eventually lifted it to through 1.5330. Liquidity was thin on the way up, according to sources and this may have exacerbated the move. EUR-GBP could add traction to the move if very large sell stops are successfully targeted from 0.8590. London sources said on Friday that there are a cascade of sell stops there are layered through 0.8590 to the 0.8560 region.

                      [USD, CHF]
                      EUR-CHF is trading close to the 1.2370 area after it struggled to sustain higher levels late last week. The limited upside was due to USD-CHF moves. The dollar pairing came under pressure amid a rise in risk appetite, which was fueled by USD-JPY weakness in Asia and Cable buy stops in Europe. USD-CHF has been mildly positive since it bounced from the 200-dma last Wednesday around 0.9360, but it has looked vulnerable today. Swiss participants noted news from UBS and Julius Baer, which announced strong net inflows in its latest results. There was no reaction after SNB chief Jordan said he has no intention of changing or scrapping the EUR-CHF floor at 1.2000. The comments were made on the sidelines of the weekend G20 meeting.

                      [USD, CAD]
                      USD-CAD broke support at 1.0350 late on in the European morning amid a rise in risk appetite and the firm commodity market backdrop. USD-CAD downside momentum is likely to be on the slow side into 1.0325, where buyers were tipped late last week and the 1.0300 area is also where good local names bids are widely anticipated. USD-CAD sellers are noted from the 1.0370 region and 1.0400 is also a good area for short positions currently, with offers from the middle of last week being lowered to more realistic levels.

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