Mid-Day FX Market Analysis


EUR – Closed in NY at $1.3321 after rate had recovered off lows of $1.3278 to $1.3327 into the close. Rate was contained within a $1.3310/30 range in early Asian dealing, the rate retreating from a challenge on $1.3330 to ease below its early support to post session lows at $1.3305 before settling between $1.3310/15 ahead of the European open. Macro sellers emerged into early Europe, taking the rate through the Asian base and to an initial low of $1.3289. Rate recovered to $1.3310 but met another round of selling which took it down to $1.3286. Major French name buys below $1.3290 were reported cushioning the base and allowed for an eventual recovery above $1.3300, with spec shorts squeezed out in the correction that took rate through the Asian high at $1.3330 and on to $1.3345. Rate was holding firm in late morning trade, currently around $1.3338. Offers seen placed $1.3350/60, stronger between $1.3380/00.

GBP – Closed in NY at $1.5841 after rate had seen a late NY sell off back to $1.5819 on reaction to BOE King’s speech, the market concentrating on headlines that the BOE stood ready to provide further stimulus. The dip in sterling saw euro-sterling move back to stg0.8415, from session lows of stg0.8364, with rate consolidating the recovery between stg0.8405/16 in Asia. Position adjustments into early Europe saw cable and euro-sterling buffeted by two way flow, with the cross edging up to retest overnight highs as cable was pressed to $1.5802 as market awaited PM Cameron’s UK/EU relationship speech. No major surprises in the speech saw cable recoup lost ground, upside momentum boosted by middle eastern buying that took rate on to $1.5845 Asia highs. Euro-sterling eased to stg0.83845 but bids at stg0.8385/80 cushioned before it tracked euro-dollar recovery. Cable extended recovery to $1.5885 late morning, as it edged up in tandem with euro-dollar, and the cross stalled around stg0.8400. Barrier protection of $1.5800, along with range players buying dips, mentioned in the recovery. Little reaction to BOE MPC Minutes, while better than expected UK employment report added to the positive sterling tone.

JPY - Dollar-yen touched an early high of Y88.79 before turning lower on Japanese sales. Demand from corporates emerged at the Tokyo fix and the pair extended recovery efforts to re-test the intraday high, profit take sales later pared gains. Macro accounts added further weight and the pair flushed light stops on the move to Y88.10. Euro-yen largely tracked the dollar and slipped to Y117.71 in early trade, demand ahead of the fix made a show back above Y118.00, before sentiment turned and pressed the cross to Y117.30. The yen pairs opened heavy in Europe, dollar-yen slipped to Y88.06, euro-yen Y117.06. Support in the dip from a major Swiss bank lifted the dollar to Y88.25, macro demand gave a further boost to Y88.45. The pair settled in a tight range with offers into Y88.45/50 and Y88.70/80 seen capping on the topside. Euro-yen tracked the recovery, before meeting strong resistance ahead of Y118.00 and eased to Y117.75.


EasyForexNews Research Team

categories Forex Analysis | January 23, 2013 |

categories EUR, GBP, JPY

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