2013-05-07 20:14 (UTC)
XE Market Analysis
FX trade was again quiet on Tuesday in N.Y., where a lack of data, and fairly flat risk levels early on, left traders largely uninspired. EUR-USD and cable were the biggest movers, both losing ground to the dollar in morning trade. The euro succumbed to profit taming, after failing to make much headway over 1.3100, while cable stops took that pairing under 1.5450 from near 1.5525. USD-CAD was flat, while AUD-USD tested 1.0150, losing further ground following the RBA rate cut. Wednesday's U.S. calendar is not inspiring either, with just weekly EIA petroleum inventory data on tap.[EUR, USD]
EUR-USD opened near 1.3120, and dipped toward 1.3080 after taking out the 1.3100 mark. The pairing pretty much filled in the post-German data related spike, and bids arwere seen at 1.3060-50. A U.K. name was a seller of cable and EUR-USD on the way down. Dealers reported fairly light interest through the N.Y. morning but good offers remain above 1.3125. It appears the euro remains in sell the rally mode for now, given the ongoing prospects for further ECB easing.[USD, JPY]
USD-JPY consolidated after Friday's surge from the 98.00 region. Activity was very low in Asia due to the Tokyo holiday. There was early demand from specs as stocks headed higher, but profit taking in EUR-JPY limited gains to just over Friday's 99.26 highs. The lack of follow through prompted the paring of some longs in N.Y. which took USD-JPY to lows of 98.95, before bottom fishing stepped back in. The pauiring reclaimed 99.00 into the close.[GBP, USD]
Cable stops went through after bids gave way at 1.5470. Selling from a U.K. clearer generated liquidity, while the N.Y. options cut may also have been factor after 1.5500 strikes rolled off. Prices accelerated quickly towards interim support at 1.5450-60, though longs are still in play at current levels. There are likely to be more buyers towards pullback lows from April-26 at 1.5418. However, longs built up after the U.K. GDP release on April-25 are likely to bail if 1.5400 gives way.[USD, CHF]
EUR-CHF consolidates the earlier rally and settles around the 1.2320 area after 1.2350 barriers held. EUR-CHF was boosted by a marked pick up in topside strikes. Demand for strikes out to two weeks changed hands over 1.2300, which was the early trigger for heavy local demand out of 1.2260. Thereafter, several levels traded up to 1.2500 over a one month horizon, while the positive risk backdrop also fueled momentum after a break of resistance at 1.2310-15. Above 1.2350 there are resistance levels between 1.2370 and 1.2380, along with outstanding 1.2400 barriers.[USD, CAD]
USD-CAD took out standing1.0050 bids in early North American trade, on its way to 1.0037 lows. Since then, buyers emerged ahead of reported 1.0020 bids, taking the pairing back toward 1.0060. The improved risk backdrop, and noted offers from 1.0080 kept further gains in check, and the pairing idled between 1.0045-55 through the afternoon session.