2013-04-30 07:12 (UTC)
XE Market Analysis
FX trade remained quiet in Asia after a largely nondescript session on Monday's N.Y. trade. Major dollar pairings languished inside of narrow ranges. EUR-USD maintained a tight range close to 1.3100, while USD-JPY consolidated close to 98.00. The commodity bloc currencies were supported by firmer stocks and commodities, which left USD-CAD close to the 1.0110 area and AUD-USD moved towards 1.0360. Several Japanese data releases were noted, but they did not impact FX movement. These included a surge in household spending, but industrial output and retail sales missed expectations. PMI data improved for the second consecutive month and unemployement also fell.[EUR, USD]
EUR-USD marked time close to the 1.3100 region after it topped out ahead of Middle Eastern account offers from 1.3120-30 on Monday. Political developments in Italy were EUR supportive. However, ahead of key policy meetings this week there is limited appetite to run positions. Fund names are still fading rallies ahead of Thursday's ECB meeting, where there are expectations of an interest rate cut following a bout of poor eurozone data.[USD, JPY]
USD-JPY struggled to sustain movement over 98.00 and drifted back to the 97.80 area. There was early demand out of Tokyo, which lifted it to the 98.10 area, where exporters put a top in place. Price action in Asia this week should remain slow due to the Golden Week holiday, which sees many dealing desks low staffed and generally markets are in a holding pattern ahead of key central bank policy meetings. Monday's shakeout to 97.35 has left yen positioning in better shape to make another topside test and there may be more confidence to buy dips. However, any further topside gains are likely to meet natural sell interest. Offers are tipped ahead of 98.50 and there are sellers where consolidation was noted on Friday between 98.60 and 98.80.[GBP, USD]
Cable offers capped ahead of 1.5550 barriers on Monday, leaving it under 1.5500 on profit taking. Positions are on the light side ahead of central bank policy meetings this week and this has tempered gains overnight despite firmer equity markets. There are expectations of a steady policy hand from the BoE this week, which should fuel dip buying on pullbacks. Near-term support is noted from Friday's consolidation zone on the hourly chart into 1.5470 and 1.5430. Longs are targeting the 100-dma around 1.5575 in the short term.[USD, CHF]
EUR-CHF is trading close to 1.2260 after it backed away from 1.2300-05 on Monday. Tentative interest to add EUR shorts via the crosses ahead of Thursday's ECB meeting was noted and this fueled a EUR-CHF fall from 1.2280 in early trade. USD-CHF also acted as a drag on the cross after it headed into the 0.9350 region on Monday on technical selling and general dollar weakness with equity markets on the rise.[USD, CAD]
USD-CAD added to losses to traded into the 1.0110 region. The weaker technical backdrop was weighed by the better risk backdrop. Corporate buyers are lined up down to the 1.0100 region, which has slowed downside momentum. To the upside, significant selling interest is not seen until the 1.0200 mark, where option backed offers have been reported.