After a volatile overnight session, FX trade was relatively quiet in N.Y. trade, with the dollar maintaining narrow ranges. U.S. economic releases in the form of existing home sales and the Richmond Fed index were under expectations, though had little market impact. Equities were flat through the morning, though managed modest gains in afternoon dealings, which weighed slightly on the greenback. EUR-USD found support under 1.3280, after peaking over 1.3320, while USD-JPY was inside a 89.50 to 90.00 band through the day.

[EUR, USD]
EUR-USD drifted back to 1.3300 in early N.Y., as European account selling related to an ECB fixing order drew in interbank names. The EUR crosses also experienced consolidation, with EUR-JPY unable to sustain a recovery back over 118.50 and EUR-CHF backed away from 1.2400 to 1.2380. EUR should still experience dip buying, with the crosses looking more balanced after today's correction, while EUR-USD is still experiencing good support ahead of 1.3250. The pairing sold off to lows under 1.3280 after the 10:00 EST options cut, where expiries at 1.3300 were noted. Initial support was seen at 1.3265-70, the London low, while stops are likely at 1.3250. The euro reclaimed the 1.33 handle in afternoon trade.

[USD, JPY]
USD-JPY pulled back to 89.40 after the BoJ announcement in London trade, where the Bank announced open-ended asset purchases and a 2% inflation target. The lack of follow through over 90.00 fueled profit taking by longs though most of the position cutting had run its course by the N.Y. session. The pairing moved inside of an 89.50 to 90.00 band through the session.

[GBP, USD]
Cable got no respite from U.K. borrrowing data. Backward revisions improved overall government finances, but Cable remained heavy around 1.5850 after it traded at intra-day lows of 1.5809, which was just shy of yesterday's 1.5806 lows. An Asian central bank provided support at the lows, along with dollar supply related to EUR-USD's rebound. Late in the session, as cable gains ran out of steam into 1.5880, thin conditions and a few sellers resulted in a push back toward 1.5810.

[USD, CHF]
EUR-CHF was hurt by sell stops under 1.2400 after EUR came under heavy selling pressure following sharp losses on the German Dax. EUR-CHF was caught long in the mid-1.24s after early buying interest and fell quickly after 1.2400 gave way to reach 1.2340 lows. After the initial drop bargain hunting picked up, while the rebound in EUR-USD enabled EUR-CHF to head back to 1.2400. Bias is still on higher levels, but the sharp sell off has done a bit of damage to the short term trend and a range trading theme is likely to ensue for now.

[USD, CAD]
USD-CAD revisited 0.9946 highs, but traded no higher due to a congestion of sell orders. The lack of movement around the 0.9945 area has been pinned on option related activity. There are rumors that 0.9950 could be an options level and there are are confirmed barriers at 0.9975 and 1.0000 that will be well defended. We anticipate sideways to slightly higher levels in the very short term, with last Friday's break higher still supporting via positive short term indicators. However, positions are still likely to remain lower than average ahead of the BoC policy meeting. Longs are only likely to be at risk if support at 0.9900-10 gives way.