There has been little change across the FX majors since yesterday's N.Y. close. JPY is consolidative just a short distance from recent trend lows, though option exposure has fueled choppy action overnight and this could continue into Thursday, where very large USD-JPY expiries are noted. EUR is trading a narrow range close to 1.3450, but maintains a dip buying mentality amid the ongoing improvement in eurozone sentiment and a bullish technical backdrop. GBP underperformance drove Cable to 1.5775 and EUR-GBP over 0.8580 on Monday, which will encourage selling pressure on upticks today. Flows may dry up a little today ahead of the FOMC meeting, while there is also month end activity to consider. EUR-GBP is usually supported on dips and this is likely to continue given the technical backdrop. We have heard of month end interest to sell JPY, AUD and NZD. The antipodean currencies were boosted by bargain hunting overnight following strong data releases out of Australia and New Zealand.

[EUR, USD]
EUR-USD traded in a tight range either side of 1.3450 following yesterday's inability to break 1.3500. Interest in Asia was mixed due to cross-currents. EUR-GBP's bid tone and a supportive backdrop in EUR-JPY was offset by corrections in EUR-AUD and EUR-NZD following recent gains. EUR-USD is still expected to maintain a dip buying mentality, with real money bids lined up from 1.3430 to 1.3400 and below.

[USD, JPY]
USD-JPY experienced good two way action underneath Monday's trend highs. Fund profit taking was evident via USD-JPY and the JPY crosses, which forced a move into 90.40 as short term stops gave way. Japanese demand was heavy at the lows and it headed back to 91.00. However, exporter offers and sell-interest related to large outstanding option expiries weighed, along with profit take orders. EUR-JPY also saw good two way action between 121.60 and 122.40, with short term stops adding traction in either direction. However, it remained short of yesterday's 122.91 top, with very large offers tipped ahead of option barriers and long-term resistance.

[GBP, USD]
Cable is expected to meet selling pressure on upticks after it broke to 1.5675 lows on Monday amid good fund selling. Poor fundamentals have seen broad based sterling long liquidation, which also drove EUR-GBP above 0.8580 on Monday. Month end related demand should underpin the cross on dips this week. Cable may retest levels under 1.5700, though there are reports of very good support from 1.5670 to 1.5650.

[USD, CHF]
EUR-CHF was unable to sustain a move over 1.2500 on Monday and it drifted back to the 1.2450 by the N.Y. close. Selling pressure has picked up today amid corporate swissy demand and real money sell interest in USD-CHF on upticks, leaving the cross around 1.2430 today. General EUR support on dips should keep the downside limited and buyers are noted into 1.2400.

[USD, CAD]
After again failing to decisively take out the 1.0100 level, USD-CAD moved back into 1.0050 as longs reduced positions. Solid selling interest is noted up at the figure, where option and fund backed offers have been reported. To the downside, bids are in place from 1.0040. Traders will watch for November Canada GDP and January Ivey PMI data on Tuesday, and we look for USD-CAD to remain range bound until then.