All eyes are on the EU Summit today as the Greek debt deal is thought to be largely in place. Except for USD/JPY the USD gained pretty much across the board on safe-haven demand. AUD/USD also took some beating after Fitch put major Australian banks on a negative ratings watch. GBP/USD is also losing momentum after 10 consecutive sessions in positive territory.
EURUSD
Just before New York close on Friday, Euro reached 1.3235 (highest level since Dec) before giving up gains on Monday on the back of short-term profiting taking and anxiety over the EU Summit. After a five-day advancement in a row, Euro needed to take a breather before deciding on the next move. Market players seem content with the recent rise but are also wary that the ‘doom and gloom’ is nowhere near over in Europe so a reality check is needed hence re-positioning of their portfolio. Also on radar today is German CPI – Expected 2% against previous 2.1% (YoY). Euro may trade within the ranges of 1.3080 – 1.3178.
USDJPY
After reaching 78.27 last week on concerns over Japan’s first monthly deficit in nearly 30 years and a decline in growth outlook, USD/JPY started this week in familiar territory again 76.60 – 76.80. Other than Japan’s Jobless rate tomorrow, there isn’t much news to trade with. Perhaps of more interest is the EUR/JPY movement where Japanese officials have recently hinted concerns over its rapid decline against the JPY. We think the market may test ‘BOJ water’ this week with sub 76.00 and we dare say 75.00 to see if there is any ‘intervention bites’ around. For the rest of Monday market may range 76.54 – 77.12.
AUDUSD
AUD/USD took the positive tone out of European to retest the recent highs during the European session to find new profit taking offers around 1.0670 enough to cap the mo-mentum. Weaker than expected US GDP 4Q results took the shine off the markets with the AUD falling sharply to 1.0600 before setting a base. The decline was short lived with the markets disregarding Fitch’s downgrading of five Eurozone countries and this was enough to start a short covering squeeze into the weeks close. Early Monday morning selling has the price opening the main part of Asia at 1.0639. With a lack of Asia zone data the markets will be reading the mixed reports from Fridays US session and the choppy tone looks set to con-tinue for another session. Offers should re-main ahead of 1.0700 at the present time as bears continue to look for resistance to sell into whilst the bulls are happy to sit and wait at present. 1.0450 still remains the pivotal level on the downside at this stage.
Compass Global Markets
No comments:
Post a Comment