2013-04-10 07:14 (UTC)
XE Market Analysis
JPY consolidated losses in quiet trade, leaving USD-JPY close to 99.00, while the EUR held steady just shy of 1.3100 as the dollar maintained easier levels. China trade resulted in an unexpected deficit as exports came in on the weaker side at 10% y/y, but imports were much stronger than expected at 14.1% y/y. The number when taken together with yesterday's slower than expected China CPI added hope that the PBoC could pullback from tighter policy. Equity markets didn't provide much traction for speculative positioning, but the technical backdrop kept the dollar on the softer side after the recent fall following last week's NFP miss. There was more Fed speak from San Francisco's Williams, who eyes reduced Fed bond buying in H2, but added he wouldn't react to one month of data and believed there were advantages to holding on its bond portfolio. Meanwhile, there was also some uncertainty due a potential North Korean nuclear missile, which kept volumes on the lower side.[EUR, USD]
EUR-USD continued to trade on a firmer footing after it received a boost out of 1.3030 to 1.3100 after yesterday's European close. It started the session around the 1.3080, but struggled to overcome offers reset at 1.3100 ahead of resistance at 1.3110. The underlying tone is skewed to higher levels and this should fuel demand on dips in today's session. Buyers are lined up at 1.3070 and into the 1.3030 region.[USD, JPY]
USD-JPY consolidated after yesterday's move to new trend highs of 99.66. It traded a relatively tight range in Asia, though found buyers just under 99.00 throughout. However, it only managed highs of 99.37 due to an overhang of offers, which include outstanding barriers at 99.75 and 100.00. PM Abe told parliament that BoJ would ease until it reached its inflation target and a change in the deflation mindset would only come through bold BoJ easing.[GBP, USD]
Cable is marking time above 1.5300 after yesterday's encouraging production numbers. NIESR also estimated that the economy grew 0.1% in March and revised up February's reading to 0.1%, which suggests that the U.K. will just avoid a triple-dip recession when official figures are released later this month. Longs target another test of resistance between 1.5350 and 1.5370, which would open up a potential run on 1.5400 and February-20 highs of 1.5448 in due course.[USD, CHF]
EUR-CHF has registered modest gains since the 200-dma held at 1.2130 at Monday's Asian open. Local names used this level to establish long positions and have been rewarded with a move back over 1.2200 on Tuesday. The better EUR tone has been a supportive lead, but since the cross move through 1.2200 an overhang of offers into 1.2220 capped gains. These good keep ranges tight as bids lower down are raised to 1.2175-80. USD-CHF is looking more vulnerable on further dollar selling and eyes a move through 0.9300. Sell stops are noted just below, while short term support is noted from as series of lows from late February at 0.9275-80.[USD, CAD]
USD-CAD steadied in front of 1.0150 after it recovered from yesterday's brief dip into 1.0135. Bids were reset from 1.0150 to 1.0135 and should keep the pair supportive in quiet trade. Offers remain heavy into the 1.0190-00 region, which suggests another session treading the familiar range.